June 15, 2009
Watch the new RePower America ad
June 10, 2009
The sad story of biofuel implosion in the Northwest
Plenty of blame to go around. This Oregonian story captures the lowlights of the story. Industry did it’s part in building the biofuel plants including my part at Imperium Renewables. But the lack of consistent government policy, lack of enforcement of mandates, and shifting commodity markets caused on again off again markets. Without appropriate capitalization of the startups there was not enough money to make it through the bumps to the other side. That is the unfortunate story of Imperium, killed by lack of sufficient working capital.
April 27, 2009
Write your representative and support the Open Fuel Standard!
Broad support for an Open Fuel Standard
With the Obama Administration and the 111th Congress settling in we have seen a burst of activity in support of fuel choice. This started with President Obama's decision to allocate $2.4 billion in taxpayer funds to develop advanced batteries and speed up the commercialization of plug in hybrids and electric cars, part of the Administration's plan to spur the sale of one million plug ins by 2015. If Congress is truly committed to breaking oil's virtual monopoly over transportation fuel, by the same year most of our new cars could also be capable of running on something other than gasoline. This can happen through the enactment of the bipartisan OPEN FUEL STANDARD ACT which was recently introduced in both the House (HR1476) and the Senate (S.835). The Open Fuel Standard (OFS) requires that starting in 2012, 50% of new automobiles powered by an internal combustion engine, and starting in 2015, 80% of such new automobiles, be flex fuel vehicles warranted to operate on gasoline, ethanol, and methanol, or be warranted to operate on biodiesel. It costs automakers an extra $100 per car to give us the insurance policy we need to prepare us for the next oil crisis that will surely come once we pull out of the recession. The CEOs of the Big Three auto companies have repeatedly stated their willingness to commit to making 50% of new cars flex fuel vehicles or warranted to operate on biodiesel by 2012. The OFS would buttress this commitment with law, thus providing certainty for investors in a variety of alternative fuels to ramp up production and fuel station owners to install pumps. By enacting the OFS Congress can break OPEC's hold on the international fuel market and insulate the global economy from the threat of future OPEC price manipulation. Original OFS co-sponsors in the Senate are Senators Brownback, Cantwell, Collins, Klobuchar, Lieberman and Thune. In the House the effort is led by Congressmen Engel, Bartlett, Inglis and Israel. Kudos to all of them.
The OFS idea is already becoming a key component of the energy agenda for many on the Hill and in the punditry. The National Energy Security Act (S.774) introduced by Sens. Dorgan and Voinovich also embraces the concept and former Speaker of the House, Newt Gingrich endorsed the OFS in a Newsweek article. In addition, a report by the Oil Solutions Initiative, a collaborative effort of several think tanks, energy policy groups and leaders from the security, environmental and business communities, including the Brookings Institute, Rocky Mountain Institute and the Council on Foreign Relations, argued that the OFS should be one of the near term policy enablers needed to move the country toward energy independence.
We can all make a small effort to help. Please take a moment to send a letter to your representative by clicking here.
April 6, 2009
University clean energy competition has 16 entries
Who says there aren’t any good clean tech ideas in the northwest. Last week on Thursday I spoke at a Seattle University sustainable conference and over this weekend there was a Green Business plan contest at U of W that drew 16 entries. Two that i think are fundable and I have encouraged them to apply to NW Energy angels, NanoCel and InTheWorks. .
March 11, 2009
New Clean Energy Trends report
from my friends at CleanEdge. out yesterday (i had an embargoed copy for awhile).
- last year Brazil drove their cars on more than 50% ethanol meaning their total petroleum consumption is on the DECLINE. This is possible in our time.
- Wind industry had sales of > $50B last year. This is not an industry for startups.
- The bankruptcy of Verasun and other ethanol producers is totally ignored.
- The report is very rear view facing.
February 26, 2009
I love the new Clean Coal commercial
this is the truth
February 3, 2009
Another old streaming media friend goes green
I worked with Gavin while he was at Virgin and I was at Loudeye. He is now doing carbon footprinting of the whole world. Good stuff. From a recent profile in the UK
Gavin Starks wants to track the Earth's carbon footprint—every single step. But he insists his ambitious vision is not hot air. Building a complete picture of CO2 emissions, the pioneering scientist says, benefits companies, governments and individuals alike
December 2, 2008
Paper bottle could save the planet
I love it! I hope they get into production. More.
Morgan Stanley downgrades Clean Energy sector
Nick over at Morgan issued a good report on Clean Energy yesterday. Unfortunately the dominance of fossil fuels continues and all the air has been sucked out of clean energy. Even Solar. The ongoing credit crunch means that these new technologies are not getting funded. I can hear Exxon and the coal industry cheering.
Industry View: Clean Energy: Attractive to In-Line
Downgrading industry to In-Line from Attractive. We think 2009 will remain a challenge overall for the space due to access to financing, FX pressures, ASP declines, margin compression, and retrenchment in fossil fuel prices. That said, our long-term positive growth thesis, particularly on solar, is unchanged: We view current energy demand destruction as transitory, while long-term secular drivers - emergence, energy security, environment, and economics - remain intact. We expect a better long-term entry point in 3-6 months.
We remain Overweight industry leaders FSLR and SPWRA relative to the group, for three reasons we think are underappreciated by investors: 1) Both companies' solutions are nearly competitive with peak electricity prices in California. 2) The US is likely to announce aggressive new clean energy policies, disproportionally benefitting domestic leaders. 3) Both companies are benefiting from a flight to quality among project developers and lenders. We've also laid out a scenario framework for how investors should think about drivers and catalysts for the group in 2009.
Key debates: 1) Policy. We expect aggressive policy from the Obama administration to act as catalysts for the group, but implementation will take time; the stocks could be volatile as they react to positive news flow, then trade down on policy execution. 2) Pricing. ASP and margin pressure will likely persist, but developer IRRs and falling input costs should be a backstop. 3)Parity. Grid parity (when renewables are cost competitive with the grid) in the US is closer than many think, driven by US utilities and California policy.
Lowering price targets and most estimates. We are reducing our targets on FSLR (to $175) and SPWRA (to $50) and reducing estimates for ESLR, BIOF and PEIX.
Where's the risk? Macro, financing, and pricing pressures, coupled with slow policy realization, could cause even top names to trade flat or down near term.
November 3, 2008
Spoke at Social Entrepreneurship event tonight
over at U of W. This is Susan Schreter’s class. nice bunch eh? Talked at some length about software and Energy and how all that led to Kashless. During the Q&A one of the students asked “so what makes you a social entrepreneur?” I don’t think I did a good job answering it there and I don’t think they liked my answer. My answer at the time was “I don’t think of myself as a social entrepreneur, only an entrepreneur.” “You have to focus on money first, anything else is gravy.”
But on the drive back, I started thinking deeper. What is a “social entrepreneur”? Well, someone who works for things in addition to money. I have retired twice. I have a nice house in Hawaii. Why I am I still working? Which is more important, make money or do good? I think the students were looking for a bright line. I am not sure there is one, but I have come up with mine.
A social entrepreneur is an entrepreneur first (makes money) and does good second.
If you get the social part right and get the entrepreneur part wrong, you run out of money and have nothing. If you get the entrepreneur part right and the social part wrong, you can always work on it later because you are making money and are sustainable. Non-profit = non-sustainable. Then the question becomes “how much money?” If you wan to be an entrepreneur to make as much money as possible you are probably not a social entrepreneur. If you have already made some money or have come to the point in your life where you realize there is more to life than money and you still want to be an entrepreneur, you may be getting closer to a social entrepreneur. But make no mistake about it, the “social” part without the “entrepreneur” part is just a Socialist.
EnerG2 gets funding
$8.5M for carbon materials for ultra capacitors. this is a deal that went through NWEA and got some funding and I have been tracking for some time. Congrats Rick! And congrats OVP.
October 23, 2008
Oddly agreeing with Friedman
He has been wrong on alot of economic and tax policy, but he is right on renewables and clean tech. Today in the Treason Times, he rightly points out that the economic crisis is going to be the beginning or the end of green. Either we will continue our revised habits from $4.50/gal gas and demands for the end of oil addiction or we will lapse into complacency (again) like the last time. Americans need to understand that this is not the last time. Oil prices are going back to $150/barrel very soon. I predict within two years. The fundamentals of supply/demand have not changed. The only thing that changed is a strengthening US dollar and an unwinding of extreeme financial leverage causing a rush out of commodities into cash. We still can't afford the SUVs.
October 8, 2008
the new we can solve it ad that is banned from ABC
unbelieveable the influence of big oil. They are blocking ads from this non profit
October 1, 2008
One of the largest contributors to the landfill is all that disposable packaging we get with our food. Especially take out and bags. There are alternatives made from fiber and corn starch for ALL THAT STUFF TODAY. No need to wait. I have seen in Seattle Taco del Mar go all green with packaging. And Wahoo's in Hawaii. Check out your favorite fast food joint and ask them why they are still using non-biodegradable packaging.
September 25, 2008
Play the consumer consequences game
over at public radio. Figures out your environmental footprint in a fun way.
September 22, 2008
They just got $10M. Congrats
September 14, 2008
corn ethanol bust continues
Very hit it home story from bloomberg
As I pointed out months ago, we are WAY long on ethanol.
"The 168 plants had capacity for 9.96 billion gallons as of Aug. 26, almost 1 billion more than the U.S. requires this year, the Washington trade group Renewable Fuels Association says. Another 43 plants scheduled to be built or expanded would raise capacity to 13.8 billion gallons. Most make ethanol from corn."
September 3, 2008
You probably saw this ad during the conventions or olympicsjoin WeCanSolveIt.com. This was just a drop in the bucket against the $427M that the oil and coal industries spend in the first half of 2008.
September 1, 2008
thinking about mileage tools
Thinking about mileage these days. I drive a VW Touareg V10 diesel. Now it gets about 20mpg which is pretty good for a big fast truck. And i run 100% biodiesel, so I don't need to feel like getting 100mpg because I am not burning any dinosaurs. But lately I have seen a rash of press on services that will track your mileage and help you improve it. I like these sites. I personally use Propel Fuel's Cleandrive program, since that is where I buy all my biodiesel. But that is only for their customers. I recently joined Fuelclinic which is a web site for everyone. Unfortunately you have to enter all your fuel purchases and mileage yourself. Over at Propel, they have my credit card on file and I when I fill up the site is automagically updated to show me mileage, CO2 reduction, everything. I hope the people at FuelClinic get some integration to the credit card companies or something soon. That would make it WAY more useful. For now I am going to stick with Propel and you should as well if you drive a diesel in seattle. But if not, join FuelClinic....
GE org chart
I always wanted to know what it was....
world wide map of solar, wind and hydro resources
found 3tiergroup who have a cool web product that maps all solar, wind and hydro resources with google maps integration. type in your address and see what your average wind speed is, or check the solar data. the company hopes to make money selling this data to commercial project developers, but it is a fun thing to do for your house. They add in things like incentives to give you a "score" which is pretty unique.
August 6, 2008
Don't believe in peak oil? Well how about Peak Caviar? I was skeptical, but this artical is very well researched and based on actual factual data collected in the field. Peak Caviar was about 1980. Since then the catch has fallen off substantially to the point where last year Russia prohibited selling Sturgeon caviar to try to restock the fish. The price went crazy. It is the old question, what price would you charge for something if you knew it was the last XX in the world? As much as you could get. Because the party is over. The charts of peak Caviar look much like the charts of oil. Now I think we will have a bit longer than the fish to go before we run out, but 20 years is not that long and the decline was STEEP.
Believe it. Peak Oil is here.
July 28, 2008
The thermodynamics of energy storage
One of the big problems with any renewable energy source comes in syncing the production with demand. Wind for example produces power when the wind blows. That is not always when the power is needed. Most energy storage mechanisms are expensive and require special materials (batteries, ultracapacitors, etc.). Wikipedia has a good explanation of all the major technologies implemented on the grid today. What about simpler ones? One idea is to compress air and have the thing drive a turbine to generate electricity on the way out. TOD did a total review of the thermodynamics of that reaction yesterday. Doesn't look good, but in an environment where the electricity is going to go waste anyway (say extra wind power), then efficiency is less important. Today pumped hydro storage is used widely to load balance hydro dams.
what about a consumer version of this???
July 24, 2008
What is really behind food prices?
No, not those darn nasty biofuels. It is oil. The price of oil driving up fertilizer and transportation costs. Check ou tthis new report.
Costs to get crops in the ground will jump by about a third in 2009, fueled by fertilizer prices expected to surge 82% for corn and 117% for soybeans, said Gary Schnitkey, an agricultural economist who conducts the annual survey of input costs.
Fertilizer—the biggest non-land expense for corn and soybean farmers—is tethered to the same cost spiral that has driven steep gasoline and heating price increases over the last few years, said Schnitkey, a professor of agriculture and consumer economics.
The study projects non-land production costs for corn will total $529 an acre next year, up 36% from 2008 and nearly 85% higher than the average of $286 per acre from 2003 to 2007. At $321 an acre, soybean input costs are projected to rise 34% from 2008 and more than 78% from the 2003-2007 average of $180 an acre.
The per-acre costs are based on high-producing farmland in Central Illinois, but corn and soybean farmers across the country will see similar increases.
Assuming cash-rent fees of $200 an acre, the study projects a break-even price of $3.82 a bushel for corn in Central Illinois, based on an average yield of 191 bushels an acre. Soybeans would break even at $9.65 a bushel, based on yields of 54 bushels per acre.
Schnitkey says 2009 prices should be significantly above break-even prices. Based on futures markets, corn should sell for about $6 a bushel next year, with soybeans in the $13 to $14 range.
Finally some backbone in congress
Introducing a bill is one thing, a good thing. What it looks like after the auto industry and oil industry lobbiest mark it up is quite another. Write your rep and tell them to get it done. Support the Open Fuel Standard Act.
Australian report shows the way to fast track Electic Vehicles
America may be finally kicking the truck habit
sales of cars surpassed trucks in April 08 for the first time since 2000. Big gas guzzling trucks are on the outs. yea.
July 22, 2008
Crud, on another list
25 who ditched infotech for Cleantech. This is getting infamous.
Humm, do I have market moving powers?
Or is it just a cooincidence? On July 7/8 I make a series of posts related to the current poor economics of ethanol and how the stocks have been beaten down. On July 11, a major part of my thesis was reposted on July 11 over at Earth2Tech. Part of my thesis is that the Oil Companies will start buying Ethanol companies at these depressed (caused by the oil companies) valuations. That day Aventine and Verasun turned the corner on the bottom and started a run up gaining over 55% over the last week. Cooincidence or influence? you decide.... (i am in investor in neither)
50/50 we loose the north pole this summer?
Mattr says those are the odds that the Scientists at the National Snow and Ice Data Center have given it. ouch
More on Coal prices
Ok, the problem in coal is larger than I thought.
and Raymond James says that coal fundamentals are "stronger than oil". I believe it with china having built half the US coal power production JUST LAST YEAR and having 58 plants idle due to no coal. Hummm....
July 15, 2008
total miles driven down
The Goldman Sachs oil analyst had a good question last year. What is the top price for oil? The last dollar that starts to materially destroy demand. Up until dec. 07, no demand had been destroyed at all. Now it seems that the run from $100 crude to $140 crude in the last quarter has started to destroy demand. But prices keep rising due to fears of shortages ala Iran, etc. I do not believe this market is responding to supply demand issues anymore. It is scarcity pricing. In scarcity pricing if you hold a very scarce resource, the price of it is whatever anyone will pay. Not enough demand has been destroyed. And even if demand is destroyed, the remaining oil stays finite. The owners of that will know that prices will be higher if they don't sell now. If it goes down, they wait and it will go back up. I contend that prices will be fairly unresponsive to demand destruction until it destroys over 20M barrels a day of demand. Goldman only estimates 5M has been destroyed. Morgan hasn't put a number on it yet I don't think.
Ethanol crush spreads in the tank
They are now effectively negative. It is not just high corn. Corn has actually not gone up that much relative to other commodities. The problem is that the sales price of ethanol has not kept up with the RBOB. See the next slide on the fact the US is WAY long on Ethanol. WAY too much capacity, allowing oil companies to bid down ethanol.
Watch as electricity is the next commodity to spike
Got a whole raft of cool slides today from Morgan Stanley.
Check this out out. Oil and Natural gas on a tear. Coal has spiked significantly recently. but Electric prices have been relatively flat. Some of that is regulated prices, but most is delay in the supply chain. Go long on electricity. Get effecient air conditioners. Prices are going up.
My investment criteria
Ok, enough bitching about what I don't like in biofuel companies. While I intend to post later about what i DO like about next generation biofuels, I thought I would provide a bit of transparency on my investment criteria for green energy investments overall. While I am a bit of a numbers nerd and internally I have a spreadsheet with all sorts of weights, averages, and trendlines, that is a bit TMI for this blog. Here, in no particular order, are some of the traits I am looking for:
- Big ($1B+) existing market for the product you are going to replace or add capacity to. I don't want to build primary demand for products on a venture budget.
- Many non-ologopoly customers. Markets with only a few big customers tend to have purchasing price power and deny start-ups meaningful margins.
- International customers, ability to reach them. The US is behind the energy/carbon game and with the weak dollar, US companies many times have superior international opportunities in renewable energy markets.
- a leveraged business model. Basically the ability to improve margins with scale and technology. Many business plans I see are basically integrators selling professional services by the hour. While maybe a decent business, it should not be venture funded.
- Positioned with pricing power in the value chain. If you don't control enough of the value chain to set price, you are toast.
- no "miracle" inventions required to develope the product.
- No serious physics, chemistry, mechanical, or material science unresolved issues.
- Can be manufactured with existing off the shelf equipment (no custom fabs, expensive yet to be invented stuff, etc.)
- has some IP protection, but company has primary IP defense rather than offense strategy.
- Fundable CEO.
- World class technical tallent.
- Not their first start-up.
- Valuation and money raise appropriate for stage and raise sufficient to meet valuation milestones.
- Lead money gets a board seat with standard class protective provisions. I never invest without a board seat.
Major risk execution versus market, policy, or technology. Basically going into a deal I want to believe (true or not) the major risks to be around how the team executes on the opportunity with my dollars versus what happens in the overall market, policy, or if the technology works or not. Many times things happen around the company that have nothing to do with execution (see Imperium), but that is part of the deal.
i will come up with more stuff, but these are the major points.
July 8, 2008
VC's stay drunk at the cleantech bar in Q2
says Cleantech Group. including:
SECOND-GENERATION BIOFUELS: While recent increases in grain prices have created controversy over first-generation biofuels, second-generation biofuel companies, which do not rely on food crops as a feedstock, continue to receive large amounts of venture capital. Second-generation biofuel companies Range Fuels, Sapphire Energy, EdeniQ, Mascoma, Aurora BioFuels, Gevo, Fulcrum Bioenergy, Greenline Industries, GreenFuel Technologies and Amyris Biotechnologies raised a combined $280 million in venture investment in 2Q08. Of this total, $136 million was invested in cellulosic ethanol startups and $84 million in algae biomass startups, including a $50 million round for Sapphire Energy—the single largest round ever raised by an algae company.
While as an entrepreneur, I approve of the continued funding, I want to see the products start rolling much sooner. Come on guys!
Big Oil - 1, Renewable Fuels - 0, part 1
I have written a major review piece on the state of liquid renewable fuels versus petroleum over the last four years. IT will be published in an upcoming issue of The Strategic News Service, after which I will post in parts here. Today I am posting the first two paragraphs:
Four years ago I ditched Technology for Energy and wrote about it for SNS. While preparing for FIRE this year, I had the opportunity to reflect on the last four years of renewable fuels in America. 2004-2008 will go down as arguably the first major battle, first real challenge, to petroleums 100% lock on our liquid fuels budget. In the same time period where Brazil reduced their petroleum consumption 40% largely through ethanol, Americas petroleum appetite grew by over 7% and we continued to consume more than a 1 out of every 4 barrels of oil on the earth. After over $30B of capital investment, Americas liquid renewable fuel industry is today valued at 30-40% of asset replacement cost and is faced with negative operating margins. Capital has fled the sector. The sad conclusion is that renewable fuels/biofuels have lost round 1. Big Oil ran the table, pitched a no-hitter, and skunked the visitors. During the last four years of unparalleled opportunity and investment in alternatives to petroleum oil, thedinosaurs have vanquished all comers.
At this point I could write a letter full of speculation, theories and even conspiracies as to how big oil has managed to maintain, and even improve their lock on our wallets, but I will leave that for another time. For now, let us just review the facts and the current state of the renewable fuel industry. Being the CEO and Chairman of Imperium Renewables, Inc. (5/05-1/08), the first large scale US biodiesel producer, I have been in the middle of this battle and have all the arrows in my back to prove it. While I remain an optimist, it is clear the dinosaurs wont go away without a BIG fightand it is going to take a lot more than nifty technology to get rid of them. While many today extol the virtues of next generation biofuels, the economic damage done to investors in this first round and the structural impediments that remain will provide a significant drag on the industry for some time to come. Let usstart with a few macro stats, a summary of the wrenches that have gummed up the works, and then onto a few modest proposals to help renewable fuels going forward.
July 7, 2008
Make a rainbarrel
Thanks Mom for this reminder. A rain barrel is a simple and economical way to conserve. Just tap it whenever you need more water for the yard, the plants, whatever! At my house I spent a fortune re-routing the gutters into to the apple orchard, but there is still more water running than I know what to do with. the rest goes into the storm sewer. Humm. maybe I need a barrel..
July 1, 2008
How about the scrap metal business?
Here is a business idea. Get into scrap metal business for cars. CIBC has a new report out predicting that $7 gas will cause about 10M cars to be scraped over the next 4.5 years. I agree. Humm, how to capitalize....
A 6% scrappage rate would take roughly 14 million
vehicles off the road every year. For the number of
vehicle registrations to remain constant in the face
of that decline, there would have to be an offsetting
number of new vehicle sales that year. But given their
link to fuel prices, new vehicle sales will be at least three
million below that number by 2012. Our projected 11
mn vehicle sales in 2012 will be the lowest level since
the early 1980s. Summing up the cumulative difference
between new sales and scrappage over that period
suggests that somewhere in the neighbourhood of ten
million Americans will be coming off the road over the
next 4½ years (Chart 10).
some petroleum and renewable fuel stats
i am writing a special letter for SNS. Here are some stats I have been collecting about oil and renewable liquid fuel industry from jan 2004 thru May 2008. A couple things jump out.
1. Oil stocks have been winners, ethanol companies loosers.
2. The price of refined renewable products, biodiesel and ethanol, has lagged the run in refined petroleum products significantly.
3. margins in Ethanol/Biodiesel have gone from bad to terrible despite or maybe because of huge capacity additions.
4. If we had all just put all our money in crude oil in Jan 2004, we would have done better than any other possible investment.
June 25, 2008
Mark Andersen presents a solution to our energy crisis
basically everything needs to convert to electric, cars, locomotives, boats, etc. Fast track nuclear to replace coal today. Run nuclear for 20 years while we scale up wind and solar. After 20 years, shut down nuclear, the transportation fleet is transitioned to electric and Boom, America is energy independent. Nice idea, but change doesn't happen like that unfortunately. It is going to be much more bloody. Too many people standing in the way.
June 24, 2008
What is this?
Plas2Fuel's first beta unit that converts all plastics back into crude oil. Very cool. I am still unsure of the energy balance and the supply of plastics, but the process seems to work.
June 20, 2008
more bad news for ethanol producers
Floods, $13 nat gas, continued control of Ethanol channel by Big Oil Companies means US ethanol producers are screwed. I expect oil companies to make offers to buy Verasun or Aventine before the end of the year. They have achieved their goal of driving the valuation of these companies down below the asset replacement cost. The math is still WAY in the oil company favor. Lets see Ethanol spot prices $2.93. the RBOB is $3.43. With the $.51 rebate, the net cost of a gallon of Ethanol to the blender (oil company) is $2.42. So lessee buy something for $2.42, blend it with my product and sell it for $3.43. Hummm.... I would do that business all day long. At the current run rate of over 7B gallons of ethanol a year, the Ethanol blending mandate is bringing over $7B of NEW 100% MARGIN revenue to the big oil companies.
> Investment Conclusion:
> We are reiterating cautious view on the ethanol producers. Recently
> two events have occurred that have the potential to tighten supply in
> the industry - flooding and the rise in corn prices. We believe this
> tightness in supply will be temporary and imports and a potential
> change in legislation are likely to tip the balance against the
> producers again.
Coming to two things that are taking supply off the market.
1) Flooding: the last data point we have is that 300 million gallons or
3 percent of capacity was shut in due to flooding. We estimate that this number is likely to
increase not only due to the actual flooding of plants but also because corn cannot reach some of the plants.
2) Margins: gross margins for ethanol producers at spot ethanol, corn and natural gas prices are almost zero if not negative. Some small marginal plants have
already started to shut in. VeraSun Energy (VSE) announced that it will delay the start-up of two plants that were slated to come onstream in the next month.
These two events will likely imply some tightness and a consequent rise in ethanol prices. However, any such rise will be temporary, in our view because of three reasons:
1) Imports from Brazil: the price differential is already favourable to import from Brazil. We estimate imports from Brazil become economical at an ethanol price of
about US$2.50/gallon and the current ethanol price is US$2.90/gallon. Brazil had about one billion gallons of spare capacity and exported 300 million gallons to
the US last year.
2) US industry capacity is already 9 billion gallons or equal to the mandate for this year. Delays in new plants is going to impact 2009 supply demand, not this year,
in our view. Any shut-in capacity can be quickly brought onstream once water recedes or margins come back even slightly.
3) Legislation: even before the floods, there were calls to reduce the ethanol mandate. Kim Wallace, from our Washington Research team, had put the probability of
legislation to lower the mandate passing this year at 35 percent and next year at 60 percent in his morning report of May 20. Now after the floods, the corn situation
looks even more bleak with 3 million acres lost and prices touching US$ 7.50 a bushel. We believe this increases the probability of Congress passing legislation this
year and this will likely be negative for ethanol producers, in our view.
To sum up, shut-in and delays due to both flooding and poor margins are likely to tighten the market. However, this will be temporary, we believe, due to imports and the risk of a lower ethanol mandate.
If you have any questions, please give us a call.
US Integrated Oil Research
Mansi Singhal, CFA +1 212 526 8729
Paul Y Cheng, CFA +1 212 526 1884
Christina Cheng +1 212 526 5580
Saurabh Bharat +1 201 499 2017
May 25, 2008
What is Martin up to
Katie says what.
May 21, 2008
what is behind the commodity run?
The Senate is taking testimony yesterday and today.
Here is Michael Master's testimony. Michael Masters Written Testimony.pdf The absolute best description of the impact of commodity index spectulators on the price of commodities i have ever read. Read it.
"Today, Index Speculators are pouring billions of dollars into the commodities futures markets, speculating that commodity prices will increase. Chart One shows Assets allocated to commodity index trading strategies have risen from $13 billion at the end of 2003 to $260 billion as of March 2008,5 and the prices of the 25 commodities that compose these indices have risen by an average of 183% in those five years!6"
May 15, 2008
Bet against me, I dare you
Ok, I pat myself on the back every now and then about being a good predictor of economic events. I started Imperium Renewables when oil was $40/barrel on the bet it would soon sustainably trade over $80/barrel by 2008. We are well above that. I started Loudeye Technologies when the average data connection speed to a PC was 14.4Kbps on the bet that broadband penetration would be enough by 2000 to have a music business. Broadband penetration and digital music is a much bigger business.
Unfortunately only the record of my blog is record of many of these events. This time I am making a prediction and holding myself accountable through the LongNow Foundation service LongBets. I posted a prediction up there that by 2010 passenger diesels will outsell hybrids. See the prediction here and support it, bet against me, or comment. If you bet against, the money goes to charity so it is fun!
Bet against me, I dare you.
May 1, 2008
thinking about affordable housing
has to be prefab. There are lots of modern prefab houses out there. Most for yuppies on a budget. Still the usual cost is $130-$140/sq ft wo/ site prep or lot. The KitHaus is not much more than a hotel room and costs $30K, nearly $280/ft. The ABOD project is for REAL budgets. about $1500 when mass produced. About $10/ft. House in a box. Designed for Africa. Not much more than a shed. Could be a cool play house. I am going to try to buy one for my surf property down in Westport.
April 30, 2008
reposting Prosper loan with higher rate
April 21, 2008
China Energy Recovery raises money
Thanks Sean for the link. CER Financing - Final Draft
Seems like if you have the words China and Energy in your name you can get money. This financing is about the size of a normal venture financing in the States, but it is notable in that it is the first outside China financing for this company. I also like the idea that China is the "saudi arabia of waste energy". There has got to be lots of opportunity to gain effeciencies in a country where it has been more important to build coal plants and grow than think about effeciency. I hope CER uses the money well.
April 18, 2008
Invest in Clean Tech Businesses with me through Prosper
Buy my syndicated Loan through Prosper
April 16, 2008
don't blame biofuels for food price increases...
biofuels and government policies that support them are easy whipping boys for recent increases in food prices. The Oil companies have been happilly fueling the cries for reduced biofuel mandates because of increased food prices. But wait. Ethanol is made from Corn. Biodiesel is made from soy and other veg oils. The food stables the world's poor rely on are rice and wheat. There was a drought in the world's wheat basket, Australia this year. Humm, is something else going on? And now even the New York Times agrees that biofuels are only partially to blame:
"Work by the International Food Policy Research Institute in Washington suggests that biofuel production accounts for a quarter to a third of the recent increase in global commodity prices. The Food and Agriculture Organization of the United Nations predicted late last year that biofuel production, assuming that current mandates continue, would increase food costs by 10 to 15 percent."
wow, didn't think I would be agreeing with the NYT today.
April 8, 2008
IPO pipeline for alternative energy empty
You can thank the Board or Directors of Imperium Renewables for that (don't blame me). And they will blame the high veg oil prices, although there is still a positive margin to be made. Morningstar notes that there have been some successes including Gushan, Clean Energy Fuels and Cosan. I expect there to be more before the end of the year.
March 17, 2008
Paper versus Plastic
MSNBC has a good overview and look at the data between this choice.
March 16, 2008
Take this little test and see if you are a water abuser or not.
March 9, 2008
Well I maybe the king of pond scum, but somehow the Mercury News left me out of it's story this week on algae. They did put Imperium in there as a leading refinery which it should. And they identified the key problem: cost of the growing system versus yield. How do you compete with sucking dinasaurs out of the ground, hard. But getting easier at $106/barrel. thanks Hugo.
March 3, 2008
WSJ reports gasoline demand down, but don't believe it
Leave it to the big business boosters at the WSJ to spread more "don't worries" about high gas prices. They are saying "standard supply and demand will take care of it". Read "dont bother with the markets government". This won't work. Not that it won't postpone government intervention. I am not a fan of government intervention. What it won't do is change the price of gas or oil. While the slowdown in the US economy is of course going to result in a minor slowing of US demand, the rest of the world is chugging away and Americans are just a quarter or two away from bellying back up to the bar. It takes more than a year for people to structurally change their driving habits. For the WSJ to suggest that in the past year enough Americans have bought hybrids and moved closer to work and started biking to support the 1.1% y/y reduction in gasoline demand is just loony. It is all the economic slowdown of activity. Not any cutback at the pump due to high gas prices or any structural change in American's behavior. Come on WSJ.
March 3, 2008;1
As crude-oil prices climb to historic highs, steep gasoline prices and the weak economy are beginning to curb Americans' gas-guzzling ways.
In the past six weeks, the nation's gasoline consumption has fallen by an average 1.1% from year-earlier levels, according to weekly government data.
That's the most sustained drop in demand in at least 16 years, except for the declines that followed Hurricane Katrina in 2005, which temporarily knocked out a big chunk of the U.S. gasoline supply system.
This time, however, there is evidence that Americans are changing their driving habits and lifestyles in ways that could lead to a long-term slowdown in their gasoline consumption.
As supplies have outstripped demand, gasoline inventories have been on the rise for the past four months, reaching their highest levels since February 1994. Yet, in a sign of the growing disconnect between demand and the market, prices at the pump are being driven higher by a powerful rally in crude oil.
Investors piling money into commodities as a refuge from inflation have helped push oil prices close to their inflation-adjusted record of $103.76 a barrel, set in 1980. On Thursday, oil closed at $102.59 a barrel on the New York Mercantile Exchange, a new high in nominal terms, but slipped back 75 cents on Friday to settle at $101.84 a barrel.
As refiners pay more for the oil they use, gasoline prices have gained sharply in recent weeks to an average of $3.13 a gallon in the week ended Feb. 25, up 40% from $2.24 a gallon in January 2007. That's stoking worries that prices will rise even more sharply as demand gets a boost from the approaching vacation season, when more Americans take to the road. Some experts predict gasoline could cost as much as $4 a gallon this summer.
If oil prices pull gasoline higher in the current economic climate, Americans are likely to pare back consumption even more, which should help at least damp the rise in prices as refiners build up a safety margin against fears of supply disruptions, experts say.
Of course, if the economy perks up, gasoline consumption could rise again. After softening between 1989 and 1991 as U.S. economic growth slowed, gasoline demand started to recover in 1992 and continued to expand until 2007, according to the U.S. Energy Information Administration. However, economists and industry executives say demand would be likely to grow at a slower pace than in the past as Americans gradually become more fuel-efficient.
Economists and policy makers have puzzled for years over what it would take to curb Americans' ravenous appetite for fossil fuels. Now they appear to be getting an answer: sustained pain.
Over the past five years, the climb in gasoline prices, driven largely by the run-up in crude oil, hardly seemed to dent the nation's growing thirst for the fuel. Conventional thinking held that consumption would begin to taper off when gasoline hit $3 a gallon.
But $3 came and went in September 2005, and gasoline demand didn't flinch. Consumers complained about the cost of filling their tanks, pinched pennies by shopping at Wal-Mart, and kept driving.
Economists who study the effects of gasoline prices on demand say consumers tend to look at short-term price spikes as an anomaly, and don't do much to change their habits. They might spend less elsewhere to compensate, or take short-term conservation measures they can easily reverse, such as driving slower or taking public transportation, but the impactis minimal.
Regular gasoline prices jumped to $2.34 a gallon at the end of 2006, up 62% from 2003, according to the EIA. Yet demand continued to grow at an average 1.1% a year. Consumers were better able to absorb the increase because it was spread over four years, and the economy was doing fairly well.
Today, a weakening economy is intensifying the effects of high gasoline prices, at the same time Americans are being pinched by broader inflation. In January, consumer prices were up 4.3% from a year earlier, a 16-year high, led by sharply rising food and energy costs. Even stripping out food and energy, the so-called core inflation rate was up 2.5% from the previous year, reflecting higher costs for purchases such as education and medical care.
The combination of forcesis prompting Americans to cut back on driving, sometimes taking public transportation instead. It's also setting the stage for what may be a long-term slowdown in gasoline demand by forcing Americans to become more fuel-efficient faster.
"If you think about the fact that U.S. motorists are responsible for one out of nine barrels of oil consumed in the world...and that consumption is no longer growing the way it used to, that's a major structural change in the market," says Adam Robinson, analyst with Lehman Brothers.
The longer gasoline prices remain high, the greater the potential consumer response. A 10% rise in gasoline prices reduces consumption by just 0.6% in the short term, but it can cut demand by about 4% if sustained over 15 or so years, accordingto studies compiled by the Congressional Budget Office.
As consumers make major spending decisions, such as where to live and what kind of vehicle to drive, they are beginning to factor in the cost of fuel. Some are choosing smaller cars or hybrids, or are moving closer to their jobs to cut down on driving. Those changes effectively lock in lower gasoline consumption rates for the future, regardless of the state of the economy or the level of gasoline prices.
Anne Heedt, of Clovis, Calif., has been moving toward a more fuel-efficient lifestyle for the past few years. She owns a Toyota Prius hybrid but takes her bike on errands when weather permits.
"We're not always going to have the same accessibility to gasoline that we've had in past decades, so we do have to start thinking about what we're going to do over the next 50 years," said the 31-year-old Ms. Heedt, who used to work at a medical office but is between jobs.
A weaker economy gets some of the credit for lessening demand. The EIA estimates that a 1% reduction in personal income cuts gasoline demand by 0.5% as consumers, along with truckers who deliver goods, cut back on driving, says Laurie Falter, an oil-industry economist at the agency.
The nation's slumping housing market has magnified that effect.In past years, when the housing market was booming, consumers used home equity to finance spending, including the cost of filling their gas tanks, says Antoine Halff, an analyst with Newedge, the jointly owned brokerage arm of Société Générale and Crédit Agricole's Calyon unit.
The housing boom encouraged the development of far-flung suburbs, contributing to longer commutes. Now developers are building more walkable neighborhoods close to city centers and public transit, and Americans are beginning to migrate back toward their workplaces, city planners and other experts say.
David Hopper, who lives in the rural community of Markleville, Ind., is preparing to move to a new house in Plainfield, cutting his commute to Indianapolis to 15 miles from 47 miles. Mr. Hopper decided to move closer to the city last summer, when gas prices hit $3.40 a gallon in his area.
"I'm expecting to save quite a bit," said the 52-year-old engineer. Not only will his new home be closer to his job, but to shopping and schools, which he calculates will save him 90 to 100 gallons of gasoline a month.
Pinched consumers also are speeding up their shift to more fuel-efficient cars. Sales of large cars dropped by 2.6% in 2006 and by 10.5% in 2007. In January, they plummeted 26.5% from a year earlier, according to Autodata Corp.
Car dealers are selling fewer minivans and large sport-utility vehicles. In fact, only small cars and smaller, more fuel-efficient SUVs, are showing a rise in sales. Small-car sales in January were up 6.5% from a year earlier, while sales of crossover vehicle grew 15.1%, Autodata Corp. says.
Write toAna Campoy firstname.lastname@example.org
Encyclopedia of free energy devices
Free energy or a device that is more than 100% effecient is the holy grail of all power generation. The current laws of physics say such devices are impossible due to the losses to friction, etc. of any system, esp. mechanical. But inventors keep trying. Mostly in the snake oil category. There is also a big industry debunking these ideas. With over $100 oil some of these are being looked at again. I found a very good summary and analysis of most of the major "free energy" inventions in the last two centuries here. Good reading. The last couple pages are a diatribe from the conspiracy guys laying out a litnay of accusations of government cover up and supression by "big money". I don't buy any of that shit. The current capitalist system of venture capitalist would fund any of these things if they worked. I hope some of them do.
Anerobic digesters for fun and profit
So I have a way of figuring out if i am interested in a technology quite quickly. I use it. Or make one. I call it "eating the dogfood". When I got interested in biodiesel, one of the first things I did was whip up a batch in my kitchen and buy a diesel car. Recently I have been pitched alot of anerobic digester deals. So I wondered, "how hard would it be to make one myself?". Turns out they are quite simple. RE-Energy.ca has a whole gaggle of downloadable science projects designed for teachers to use with kids. They have a good backgrounder on biomass energy and i downloaded the Biogas Generator Construction plans to build one with my daughter Finn. Of course the most attractive part of the project for Finn and her friend Elsa was the "poop" part.
Here is a picture of the finished item:
For storage of the gas you use a mylar balloon. I found one that is a Harley. Storing methane in a harley Cool eh?
The only modification i made to the plans was to use 1/4 OD fittings and screw type connectors from a plumbing supply store instead of 1/4 ID fittings with barb fittings. Barb fittings are old school. The screws are modern and easier to use. I also put a short piece of tube on the down part of the T instead of putting the fitting directly into the cork. Just for fun.
Now i wait for a month. This is not a great science project for school as the results are not immediate. I will blog when it starts producing.
February 27, 2008
Where is your candidate on climate change?
UBS did a good analysis, excerpts below
Basically everyone is doing something.
On our front page this week, we highlight our US Strategy teams report on the
implications of Obamanomics for industries and sectors.
Much of the analysis focuses on Senator Obamas ambitious plans to build a
Clean Energy Economy. The support Senator Obama showed early in his
campaign for coal-to-liquids technology and ethanol-based biofuels has now
been qualified, resulting in practically identical positions on environmental
issues for the Democratic contenders:
Both Clinton and Obama support a cap and trade system to cut US emission
80% below 1990 levels by 2050; both support raising fuel economy standards
for autos to 40mpg by 2020; both call for getting 25% of US electricity from
renewables by 2020; where Senator Clinton proposes a $50bn 10 year fund to
invest in renewables and other energy sources, Senator Obama proposes a
$150bn fund; both call for 60 bn gallons of homegrown biofuels to be produced
in the US by 2030; both support coal-to-liquid fuels if they emit 20% less carbon
over their lifecycle than conventional fuels.
It is worth noting, however, since the election results are not a foregone
conclusion, that Republican front-runner Senator McCain could be said to be at
least equally environmentally aware.1 Senator McCain co-sponsored the first
Senate bill calling for mandatory cuts to greenhouse-gas emissions and is the
only candidate to have come out strongly against the US corn-based ethanol
industry on environmental grounds. Although he has subsequently
compromised his expressed views on ethanol, he remains an outspoken
opponent of ethanol subsidies.
The leading climate change proposal currently being considered by Congress is
the Lieberman-Warner Climate Security Act, which is modelled on previous
McCain-sponsored legislation; this would create a market similar to the EU ETS,
where, in the first instance, free allocations would be made to industry based on
their past emissions. Both Senators Clinton and Obama have expressed their
support, instead, for a 100% auction of carbon permits with no free allowances.
Whatever divergent areas of policy may exist between Republican and
Democratic Presidential candidates, it seems likely at least that the next
President of the United States, regardless of party, will be committed to tackling
market trends in green cars
The most comprehensive summary for 2008 can be found over at GreenCars.
On average, every new large SUV cruising the streets produces 40 percent more climate-threatening carbon dioxide (CO2) emissions than a new car. Large vehicles are likely to remain prominent in the U.S. market for years to come, so improving their fuel economy is essential to reducing the environmental impact of the U.S. auto fleet as a whole. In fact, bumping up the low end of the efficiency spectrum is the quickest way to save fuel and reduce CO2 emissions: raising the fuel economy of, say, a Yukon Denali from 14 to 16 miles per gallon would save over 100 gallons per year for the typical driver and eliminate 1.3 tons of CO2 emissions, while achieving the same savings through improvements to a 42 mile-per-gallon Civic Hybrid would require a 25 mpg boost, to 67 mpg.
Top 10 most green cars
The folks over at GreenerCars.org have put out their Green Car 2008 list. Prius on top (no surprise). A big surprise is seeing Toyota Tacoma and Siena and the Chevrolet Tahoe hybrid.
WGA speed development of alternative fuels
Western Governors to Speed Development of Alternative Fuels
Western governors agreed on Saturday to take action to speed the development of alternative fuels in the West. A resolution adopted by the Western Governors' Association (WGA) commits to the development of a regional framework for a performance-based greenhouse gas standard for transportation fuels, such as a low-carbon fuel standard. The governors will also work together to promote an analytic methodology for evaluating the entire lifecycle of fuel production and use in terms of greenhouse gas emissions as well as other impacts upon the land, water, and air. The initiative was spearheaded by the governors of California, Montana, Oklahoma, South Dakota, Utah, and Washington.
Most other items in the resolution are optional, such as asking each governor to consider procuring alternative fuel vehicles for state fleets, ensuring those vehicle use alternative fuels, and creating partnerships between public and private fleets for procuring alternative fuel vehicles and alternative fuels. Governors are also asked to work regionally on issues such as alternativefuel workforce training, biomass feedstocks, alternative fuel infrastructure, and policies that promote the sustainable use of natural resources in the transition to an economy based on alternative fuels. The WGA represents the governors of 19 western states and three groups of Pacific islands: American Samoa, Guam, and the Northern Mariana Islands. See the WGA press release and resolution (PDF 60 KB). Download Adobe Reader.
The western governors' focus on greenhouse gas emissions from fuel production calls to mind two recent studies, published online by Science Magazine, that generally conclude that clearing land to produce biofuels generates more greenhouse gas emissions than is saved by the biofuel production. Researchers from the DOE Biomass Program and DOE's Argonne National Laboratory (ANL)took issue with the results of the first study, which focused on the United States, noting that the researchers used an ANL computer model incorrectly, overestimated ethanol production, and made conservative assumptions about corn yields. In a letter to Science Magazine, the researchers conclude that it is not clear what land use changes will result from increased U.S. biofuel use, and that a more scientific study of land use impacts needs to be carried out. The Renewable Fuels Association (RFA) also responded, noting that the studies say nothing about the benefits of today's biofuels, and instead use a number of assumptions to examine a "worst case scenario" for the future. See the abstracts about the use of U.S. croplands for biofuels increasing greenhouse gases and land clearing and the biofuel carbon debt on the Science Magazine Web site, the ANL response, and the RFA press release (PDF 93 KB).
More on Imperium Renewables biojet flight
"The partnership between Virgin Atlantic, Boeing, GE and Imperium Renewables has advanced our understanding of biofuels for aviation applications," said GE Aviation Manager of Advanced Combustion Engineering Dr. Tim Held. "Prior to this historic flight, the engine ground testing conducted by GE and CFM International required no hardware modifications to the engine, and the fuels performed as expected."
"A successful flight will not only validate the use of biofuels in aviation, but also provide a glimpse into the future of all fuels," said Imperium Renewables President and CEO John Plaza prior to the flight. "Today's biojet fuel offers higher-quality standards and a more sustainable fuel than traditional jet fuel. Additionally, it illustrates the potential for second-generation biojet fuel to be even more viable in the coming years."
The results of the biofuel flight will be analyzed by the collective team and used for research and development of next-generation biofuels that can help to further reduce carbon emissions. Boeing will use findings from this flight as a baseline for conducting another biofuel flight later this year with Air New Zealand.
February 22, 2008
time to short AVR
From their earnings yesterday and the Lehman analyst:
* The results were slightly ahead of our forecasts, however the big news in the release were liquidity issues. The company has $223 million liquidity available in the form of cash in hand and availability under credit facility. This compared to remaining capex for the two plants under construction of $295-$305 million. The company's 2007 EBITDA was $58 million and given the trends in the commodity market, webelieve 2008 number will be substantially lower. The company has additional $127 million in auction rate securities, however, the market for these securities has dried up and the company may not be able to liquidate them on a timely basis. AVR indicates that in this case it will have to attempt to raise additional funds or slow down the construction of new facilities. Delay in construction could mean "material penalties" for the company.
read: "We are F***ed by the credit market"
look for them to get bought before year end.
February 19, 2008
Martin Tobias's Renewable Energy Reading list
January 28, 2008
IPO market worst in 10 years
I learned something new today. Imperium Renewables pulled IPO is the largest pulled in the US so far this year according to Bloomberg. It is unfortunate that the capital markets are going badly for new issues just when the money is needed for investment to stave of off recession. That is how these things feed on themselves. Fear breeds more fear. Unfortunately this plays right into the hands of big oil and all the people who already control the economy and our gas tanks. Stupid.
January 23, 2008
UBS climate change research
Today the EU will be giving updated direction on climate change initiatives and targets for across the EU. Both for Renewable electricity generation and renewable fuels. Bottom line: strengthing the carbon credit trading systems, reaffirming the mandatory 20% Renewable Energy and 10% renewable fuel mandates by 2020, and more guidance on how local countries can help industry. Wake up America, Europe is going to beat us here. Read the whole UBS piece here.
January 22, 2008
Cool carbon video
January 18, 2008
Seattle economy due for 'good ride' in 2008
The Seattle Times wrote up a nice story on the Enerprise Seattle event at which I spoke yesterday.
Dozens of local clean-technology companies -- enterpriseSeattle estimates more than 400 -- have been formed.
Access to capital is still a big obstacle. The Northwest Energy Angels alliance, made up of 45 people, is looking for companies to invest in. It has reviewed 22 companies and funded four so far. Three years ago, the group was founded by Martin Tobias, the former CEO of Imperium Renewables. He left the biofuel company in December.
"These companies need a lot more money to get created than standard software companies," Tobias said.
Clean-technology companies face the inertia created by a well-established energy industry, he said. "The incumbent industries we are trying to change have more money than any of us, and they don't want to change."
January 8, 2008
Light reading from Newt
This is the text of a speech he gave recently. I couldn't have expressed the disaster the West's complacency about Islamic fundamentalist is setting up in the world. Stop sending our $$ to fund this war against American and democracy around the world. Do you want to be converted to Islam? That is what the fundamentalist want. We are financing their dreams by driving petroleum powered cars and trucks. Do something now. Stop using petroleum.
[Former House Speaker Newt Gingrich delivered the following remarks to a
Jewish National Fund meeting Nov. 15 at the Selig Center:]
I just want to talk to you from the heart for a few minutes and share with
you where I think we are.
I think it is very stark. I don't think it is yet desperate, but it is very
stark. And if I had a title for today's talk, it would be sleepwalking into
a nightmare. 'Cause that's what I think we're doing.
I gave a speech at the American Enterprise Institute Sept. 10 at which I
gave an alternative history of the last six years, because the more I
thought about how mich we're failing, the more I concluded you couldn't just
nitpick individual places and talk about individual changes because it
didn't capture the scale of the disaster. And I had been particularly
impressed by a new book that came out called Troublesome Young Men, which is
a study of the younger Conservatives who opposed appeasement in the 1930's
and who took on Chamberlain. It's a very revealing book and a very powerful
book because we tend to look backwards and we tend to overstate Churchill's
role in that period. And we tend to understate what a serious and
conscientious and thoughtful effort appeasement was and that it was the
direct and deliberate policy of very powerful and very willful people. We
tend to think of it as a psychological weakness as though Chamberlain was
somehow craven. He wasn't craven. Chamberlain had a very clear vision of the
world, and he was very ruthless domestically. And they believed so deeply in
avoiding war with Germany that as late as the spring of 1940, when they are
six months or seven months into they war, they are dropping leaflets instead
of bombs on the Rohr, and they are urging the British news media not to
publish anti-German stories because they don't want to offend the German
people. And you read this book, and it makes you want to weep because,
interestingly, the younger Tories who were most opposed to appeasement were
the combat veterans of World War I, who had lost all of their friends in the
war but who understood that the failure of appeasement would result in a
worse war and that the longer you lied about reality, the greater the
And they were severely punished and isolated by Chamberlain and the
Conservative machine, and as I read that, I realized that that's really
where we are today. Our current problem is tragic. You have an
administration whose policy is inadequate being opposed by a political left
whose policy is worse, and you have nobody prepared to talk about the policy
we need. Because we are told if you are for a strong America, you should
back the Bush policy even if it's inadequate, and so you end up making an
argument in favor of something that can't work. So your choice is to defend
something which isn't working or to oppose it by being for an even weaker
policy. So this is a catastrophe for this country and a catastrophe for
freedom around the world. Because we have refused to be honest about the
scale of the problem.
Let me work back. I'm going to get to Iran since that's the topic, but I'm
going to get to it eventually.
Let me work back from Pakistan. The dictatorship in Pakistan has never had
control over Wiziristan. Not for a day. So we've now spent six years since
9/11 with a sanctuary for Al-Qaida and a sanctuary for the Taliban, and
every time we pick up people in Great Britain who are terrorists, they were
trained in Pakistan.
And our answer is to praise Musharraf because at least he's not as bad as
the others. But the truth is Musharraf has not gotten control of terrorism
in Pakistan. Musharraf doesn't have full control over his own government.
The odds are even money we're going to drift into a disastrous dictatorship
at some point in Pakistan. And while we worry about the Iranians acquiring a
nuclear weapon, the Pakistanis already have 'em. So why would you feel
secure in a world where you could presently have an Islamist dictatorship in
Pakistan with a hundred-plus nuclear weapons? What's our grand strategy for
Then you look at Afghanistan. Here's a country that's small, poor, isolated,
and in six years we have not been able to build roads, create economic
opportunity, wean people off of growing drugs. A third of the GDP is from
drugs. We haven't been able to end the sanctuary for the Taliban in Pakistan.
And I know of no case historically where you defeat a guerrilla movement if
it has a sanctuary. So the people who rely on the West are out bribed by the
criminals, outgunned by the criminals, and faced with a militant force
across the border which practiced earlier defeating the Soviet empire and
which has a time horizon of three or four generations. NATO has a time
horizon of each quarter or at best a year, facing an opponent whose time
horizon is literally three or four generations. It's a total mismatch.
Then you come to the direct threat to the United States, which is Al-Qaida.
Which, by the way, we just published polls. One of the sites I commend to
you is AmericanSolutions.com. Last Wednesday we posted six national surveys,
$428,000 worth of data. We gave it away. I found myself in the unique
position of calling Howard Dean to tell him I was giving him $400,000 worth
of polling. We have given it away to both Democrats and Republicans. It is
fundamentally different from the national news media. When asked the
question "Do we have an obligation to defend the United States and her
allies?" the answer is 85 percent yes. When asked a further question "Should
we defeat our enemies?" - it's very strong language - the answer is 75
percent yes, 75 to 16.
The complaint about Iraq is a performance complaint, not a values complaint.
When asked whether or not Al-Qaida is a threat, 89 percent of the country
says yes. And they think you have to defeat it, you can't negotiate with it.
So now let's look at Al-Qaida and the rise of Islamist terrorism.
And let's be honest: What's the primary source of money for Al-Qaida? It's
you, recirculated through Saudi Arabia. Because we have no national energy
strategy, when clearly if you really cared about liberating the United
States from the Middle East and if you really cared about the survival of
Israel, one of your highest goals would be to move to a hydrogen economy and
to eliminate petroleum as a primary source of energy.
Now that's what a serious national strategy would look like, but that would
require real change.
So then you look at Saudi Arabia. The fact that we tolerate a country saying
no Christian and no Jew can go to Mecca, and we start with the presumption
that that's true while they attack Israel for being a religious state is a
sign of our timidity, our confusion, our cowardice that is stunning.
It's not complicated. We're inviting Saudi Arabia to come to Annapolis to
talk about rights for Palestinians when nobody is saying, "Let's talk about
rights for Christians and Jews in Saudi Arabia. Let's talk about rights for
women in Saudi Arabia."
So we accept this totally one-sided definition of the world in which our
enemies can cheerfully lie on television every day, and we don't even have
the nerve to insist on the truth. We pretend their lies are reasonable. This
is a very fundamental problem. And if you look at who some of the largest
owners of some of our largest banks are today, they're Saudis.
You keep pumping billions of dollars a year into countries like Venezuela,
Iran and Saudi Arabia, and Russia, and you are presently going to have
created people who oppose you who have lots of money. And they're then going
to come back to your own country and finance, for example, Arab study
institutes whose only requirement is that they never tell the truth. So you
have all sorts of Ph.D.s who now show up quite cheerfully prepared to say
whatever it is that makes their funders happy - in the name, of course, of
academic freedom. So why wouldn't Columbia host a genocidal madman? It's
just part of political correctness. I mean, Ahmadinejad may say terrible
things, he may lock up students, he may kill journalists, he may say, "We
should wipe out Israel," he may say, "We should defeat the United States,"
but after all, what has he done that's inappropriate? What has he done that
wouldn't be repeated at a Hollywood cocktail party or a nice gathering in
And nobody says this is totally, utterly, absolutely unacceptable. Why is it
that the No. 1 threat in intelligence movies is the CIA?
I happened the other night to be watching an old movie, To Live and Die in
L.A., which is about counterfeiting. But the movie starts with a Secret
Service agent who is defending Ronald Reagan in 1985, and the person he is
defending Ronald Reagan from is a suicide bomber who is actually, overtly a
Muslim fanatic. Now, six years after 9/11, you could not get that scene made
in Hollywood today.
Just look at the movies. Why is it that the bad person is either a
right-wing crazed billionaire, or the CIA as a government agency. Go look at
the Bourne Ultimatum. Or a movie like the one that George Clooney made,
which was an absolute lie, in which it implied that if you were a reformist
Arab prince, that probably the CIA would kill you. It's a total lie. We
actually have SEALs protecting people all over the world. We actually risk
American lives protecting reformers all over the world, and yet Hollywood
can't bring itself to tell the truth, (a) because it's ideologically so
opposed to the American government and the American military, and (b),
because it's terrified that if it said something really openly, honestly
true about Muslim terrorists, they might show up in Hollywood. And you might
have somebody killed as the Dutch producer was killed.
And so we're living a life of cowardice, and in that life of cowardice we're
sleepwalking into a nightmare.
And then you come to Iran. There's a terrific book. Mark Bowden is a
remarkable writer who wrote Black Hawk Down, has enormous personal courage.
He's a Philadelphia a newspaper writer, actually got the money out of the
Philadelphia newspaper to go to Somalia to interview the Somalian side of
Black Hawk Down. It's a remarkable achievement. Tells a great story about
getting to Somalia, paying lots of cash, having the local warlord protect
him, and after about two weeks the warlord came to him and said, "You know,
we've decided that we're very uncomfortable with you being here, and you
And so he goes to the hotel, where he is the only hard-currency guest, and
says, "I've got to check out two weeks early because the warlord has told me
that he no longer will protect me." And the hotel owner, who wants to keep
his only hard-currency guest, says, "Well, why are you listening to him?
He's not the government. There is no government." And Bowden says, "Well,
what will I do?" And he says, "You hire a bigger warlord with more guns,"
which he did. But then he could only stay one week because he ran out of
But this is a guy with real courage. I mean, imagine trying to go out and be
a journalist in that kind of world, OK? So Bowden came back and wrote Guest
of the Ayatollah, which is the Iranian hostage (event) of 1979, which he
entitled, "The First Shots in Iran's War Against America." So in the Bowden
world view, the current Iranian dictatorship has been at war with the United
States since 1979. Violated international law. Every conceivable tenet of
international law was violated when they seized the American Embassy and
they seized the diplomats. Killed Americans in lebanon in the early '80s.
Killed Americans at Khobar Towers in '95 and had the Clinton administration
deliberately avoid revealing the information, as Louis Freeh, the director
of the FBI, has said publicly, because they didn't want to have to confront
the Iranian complicity.
And so you have an Iranian regime which is cited annually as the leading
supporter of state terrorism in the world. Every year the State Department
says that. It's an extraordinary act of lucidity on the part of an
institution which seeks to avoid it as often as possible.
And you have Gen. Petraeus come to the U.S. Congress and say publicly in an
open session, "The Iranians are waging a proxy war against Americans in
I was so deeply offended by this, it's hard for me to express it without
sounding irrational. I'm an Army brat. My dad served 27 years in the
infantry. The idea that an American general would come to the American
Congress, testify in public that our young men and women are being killed by
Iran, and we have done nothing, I find absolutely abhorrent.
So I'm preparing to come and talk today. I got up this morning, and a friend
had sent me yesterday's Jerusalem Post editorial, which if you haven't read,
I recommend to you. It has, for example, the following quote: "On Monday,
chief Palestinian negotiator Saeb Erekat said, 'The problem of the content
of the document setting out joint principles for peace-making post-Annapolis
has not been resolved. One of the more pressing problems is the Zionist
regime's insistence on being recognized as a Jewish state. We will not agree
to recognize Israel as a Jewish state. There is no country in the world
where religious and national identities are intertwined.' "
What truly bothers me is the shallowness and the sophistry of the Western
governments, starting with our own. When a person says to you, "I don't
recognize that you exist," you don't start a negotiation. The person says,
"I literally do not recognize" and then lies to you. I mean the first thing
you say to this guy is "Terrific. Let's go visit Mecca. Since clearly
there's no other state except Israel that is based on religion, the fact
that I happen to be Christian won't bother anybody." And then he'll say,
"Well, that's different."
We tolerate this. We have created our own nightmare because we refuse to
tell the truth. We refuse to tell the truth to our politicians. Our State
Department refuses to tell the truth to the country. If the president of the
United States, and again, we're now so bitterly partisan, we're so committed
to red-vs.-blue hostility, that George W. Bush doesn't have the capacity to
give an address from the Oval Office that has any meaning for half the
country. And the anti-war left is so strong in the Democratic primary that I
think it's almost impossible for any Democratic presidential candidate to
tell the truth about the situation.
And so the Republicans are isolated and trying to defend incompetence. The
Democrats are isolated and trying to find a way to say, "I'm really for
strength as long as I can have peace, but I'd really like to have peace,
except I don't want to recognize these people who aren't very peaceful."
I just want to share with you, as a grandfather, as a citizen, as a
historian, as somebody who was once speaker of the House, this is a serious
national crisis. This is 1935 or 1936, and it's getting worse every year.
None of our enemies are confused. Our enemies don't get up each morning and
go, "Oh, gosh, I think I'll have an existential crisis of identity in which
I will try to think through whether or not we can be friends while you're
killing me." Our enemies get up every morning and say, "We hate the West. We
hate freedom." They would not allow a meeting with women in the room.
I was once interviewed by a BBC reporter, a nice young lady who was only
about as anti-American as she had to be to keep her job. Since it was a live
interview, I turned to her halfway through the interview and I said, "Do you
like your job?" And it was summertime, and she's wearing a short-sleeve
dress. And she said, "Well, yes." She was confused because I had just
reversed roles. I said, "Well, then you should hope we win." She said, "What
do you mean?" And I said, "Well, if the enemy wins, you won 't be allowed to
be on television."
I don't know how to explain it any simpler than that.
Now what do we need?
We need first of all to recognize this is a real war. Our enemies are
peaceful when they're weak, are ruthless when they're strong, demand mercy
when they're losing, show no mercy when they're winning. They understand
exactly what this is, and anybody who reads Sun Tzu will understand exactly
what we're living through. This is a total war. One side is going to win.
One side is going to lose. You'll be able to tell who won and who lost by
who's still standing. Most of Islam is not in this war, but most of Islam
isn't going to stop this war. They're just going to sit to one side and tell
you how sorry they are that this happened. We had better design grand
strategies that are radically bigger and radically tougher and radically
more honest than anything currently going on, and that includes winning the
argument in Europe , and it includes winning the argument in the rest of the
world. And it includes being very clear, and I'll just give you one simple
example because we're now muscle-bound by our own inability to talk
Iran produces 60 percent of its own gasoline. It produces lots of crude oil
but only has one refinery. It imports 40 percent of its gasoline. The entire
60 percent is produced at one huge refinery.
In 1981, Ronald Reagan decided to break the Soviet empire. He was asked
what's your vision of the Cold War. He said, "Four words: We win; they
lose." He was clearly seen by The New York Times as an out-of-touch,
reactionary, right-wing cowboy from California who had no idea what was
going on in the world. And 11 years later the Soviet Union disappeared, but
obviously that had nothing to do with Reagan because that would have meant
he was right. So it's just a random accident the Soviet Union disappeared.
Part of the war we waged on the Soviet Union involved their natural gas
supply because we wanted to cut off their hard currency. The Soviets were
desperate to get better equipment for their pipeline. We managed to sell
them through third parties very, very sophisticated American pipeline
equipment, which they were thrilled to buy and thought they had pulled off a
huge coup. Now we weren't playing fair. We did not tell them that the
equipment was designed to blow up. One day in 1982, there was an explosion
in Siberia so large that the initial reflection on the satellites looked
like there was a tactical nuclear weapon. One part of the White House was
genuinely worried, and the other part of the White House had to calm them
down. They said, "No, no, that's our equipment blowing up."
In the 28 years since the Iranians declared war on us, in the six years
since 9/11, in the months since Gen. Petraeus publicly said they are killing
young Americans, we have not been able to figure out how to take down one
refinery. Covertly, quietly, without overt war. And we have not been able to
figure out how to use the most powerful navy in the world to simply stop the
tankers and say, "Look, you want to kill young Americans, you're going to
walk to the battlefield, but you're not going to ride in the car because
you're not going to have any gasoline."
We don't have to be stupid. The choice is not cowardice or total war. Reagan
unlocked Poland without firing a shot in an alliance with the pope, with the
labor unions and with the British. We have every possibility if we're
prepared to be honest to shape the world. It'll be a very big project. It's
much closer to World War II than it is to anything we've tried recently. It
will require real effort, real intensity and real determination. We're
either going to do it now, while we're still extraordinarily powerful, or
we're going to do it later under much more desperate circumstances after
we've lost several cities.
We had better take this seriously because we are not very many mistakes away
from a second Holocaust. Three nuclear weapons is a second Holocaust. Our
enemies would like to get those weapons as soon as they can, and they
promise to use them as soon as they can.
I suggest we defeat our enemies and create a different situation long before
they have that power.
BMW comits to ship diesels to US
Thanks GCC for this review. I remain committed to my prediction that there will be more diesels offered by major auto makers in 2009 than hybrids. Watch out Toyota!
January 2, 2008
The seed is starting to prosper
Four years ago I started looking for renewable energy investments in the Northwest. I invested in Seattle Biodiesel that became Imperium Renewables. Three years ago I started the Northwest Energy Angel Network. Now stories are showing up every week about the growth of clean tech in Seattle, including this one in Seattle Times this week. Tech people focusing on the environment and renewable energy. Now there is a winning formula.
December 19, 2007
President signes neutered Energy Bill
President Bush Signs Energy Bill
By Steven Mufson
Wednesday, December 19, 2007; 10:47 AM
President Bush on Wednesday signed into law legislation meant to reduce
The bill, the product of a year of rhetoric, lobbying, veto threats and negotiations, won final approval yesterday in the House of Representatives on a 314 to 100 vote, and Bush moved quickly to make it official. At a signing ceremony, Bush said the bill would "address our vulnerabilities and dependence" on imported oil, saying that the bill offered the country a chance to cut pollution and greenhouse gas emissions, and even reduce the likelihood of terrorist attacks.
Lawmakers said the energy bill will reduce America's heavy reliance on imported oil and take a modest step toward slowing climate change by cutting about a quarter of the greenhouse-gas emissions that most scientists say the United States must eliminate by 2030 to do its share to avert the most dire effects of global warming.
"It is a national security issue, it is an economic issue, it is an environmental issue, and therefore a health issue," said House Speaker Nancy Pelosi (D-Calif.). "It is an energy issue, and it is an moral issue."
White House press secretary Dana Perino gave credit to Bush, saying he "pushed Congress to pass this legislation all year." But congressional Democrats said they had withstood veto threats by the White House as well as heavy lobbying by automakers and coal companies before ultimately preserving much of what they wanted in the legislation.
The bill's centerpiece is the boost in the minimum fuel-efficiency standard
for passenger vehicles, the first to be passed by Congress since 1975. It
requires new auto fleets to average 35 miles a gallon by 2020, a 40 percent
increase from today's 25-mile average. By 2020, the measure could reduce
The bill will also have sweeping impact in areas beyond the automobile industry.
For farmers and agribusiness, it is a windfall, providing more support than perhaps even the farm bill. It doubles the use of corn-based ethanol -- despite criticism that corn-based ethanol is driving up food prices, draining aquifers and exacerbating fertilizer runoff that is creating dead zones in many of the nation's rivers.
The law will also require the massive use of biofuels using other feedstocks, creating an industry from technologies still in laboratories or pilot stages whose economic viability is unproven. The law says that at least 36 billion gallons of motor fuel a year should be biofuels by 2022, most of it in "advanced biofuels," not a drop of which are commercially produced today.
Although the bill does not include any costs for the biofuels mandate, a fivefold increase over current production, it is likely that current subsidies for those fuels will be extended. If so, the mandate could cost the federal government as much as $140 billion over 15 years.
Bush and congressional supporters of the bill say the expanded use of
biofuels will help cut
One portion of the bill sets new efficiency standards for appliances and
will make the incandescent bulb -- invented two centuries ago and improved and
The commercial building industry could also be transformed by new incentives for energy-efficient windows, equipment and design. The federal government is supposed to make all of its buildings carbon-neutral through energy efficiency and clean energy use by 2030.
"The General Services Administration is the country's biggest landlord," said Andrew Goldberg, chief lobbyist for the American Institute of Architects. "This will help transform the marketplace for systems and equipment that make buildings more energy efficient and reduce the reliance on fossil fuel."
Not everyone was happy at the end of a year of haggling and lobbying. To secure passage for the bill, congressional leaders dropped a tax package that would have reduced breaks for the biggest oil and gas companies and extended breaks for wind and solar projects.
"We're pretty disappointed," said Rhone A. Resch, president of the
Solar Energy Industries Association, which sought an extension of the
investment tax credit that expires at the end of next year. "Clearly the
most important provisions for us were left on the cutting-room floor."
Resch said that because of long lead times for big solar projects, "we
will see the
But many environmental groups and lawmakers were elated. "This bill is a clean break with the failed energy policies of the past and puts us on the path toward a cleaner, greener energy future," said Carl Pope, director of the Sierra Club.
Edward J. Markey (D-Mass.), who proposed raising fuel-efficiency standards
in 2001, 2003 and 2005, said that the energy bill would help the
Two years ago, a Markey amendment on fuel efficiency failed by an 87-vote margin, closer than his earlier efforts. But this year Democratic leaders made an energy bill a top priority. And Bush, in his State of the Union address, endorsed a similar boost in gasoline mileage standards and urged Americans to break their "addiction" to oil.
Soaring prices for oil and petroleum products and growing public concern
about climate change also encouraged lawmakers to back higher fuel-efficiency
"I think between process, policy and politics it all came together and we have an energy bill no one could have envisioned six months ago," said Phyllis Cuttino, director of the Pew Campaign for Fuel Efficiency.
Cuttino said that the Pew Campaign, founded in April, would close its doors in mid-January.
The Time article with pictures...CleanTechArticlePg1.jpg CleanTechArticlePg2.jpg CleanTechArticlePg3.jpg CleanTechArticlePg4.jpg
December 17, 2007
Morgan Stanley calls off its spec trade on ethanol
Buy on the rumor, sell on the news. That is a time tested strategy on Wall Street. In late Nov, MS made a short term call to buy Ethanol stocks. The stocks rallied in expectation of the Energy Bill passing. It has and is allbut law. The House and president should get through it this week. So MS says sell. I disagree, but here is MS logic:
ENERGY: CATALYST TRIGGERED; SHORT-TERM TRADE DONE - December 17, 2007
GMT (6 pgs/ 64 kb)
David Wilson, CFA +1 (1)713 512 4482 Morgan Stanley & Co.
Closing Our Short-Term Trade: In light of recent positive developments
surrounding the Energy Bill, we prefer to "take money off the table,"
locking in recent gains in the ethanol stocks, rather than subject those gains
to possible deterioration as we head into 2008. As a group, the ethanol names
are 60% above 52-week lows today.
The Background and Reasons: We put forth a short-term trade idea on
November 26 to buy the ethanol stocks due to impending legislative catalysts.
We now believe it is appropriate to close that trade in light of i) the
catalyst - a new renewable fuel standard (RFS) playing out and ii) some of the
near-term uncertainty facing the industry. (See our notes "Biofuel
Update: A Short-Term Trading Idea" Nov. 26, 2007, and "Biofuel
Update: Energy Bill Still Pending, Still a Catalyst" Dec 11, 2007). We
believe that significant upside to the ethanol stocks at these levels is
unlikely in the near-term based on the poor overall stock performance in 2007
(excluding recent weeks' performance), the potential ethanol oversupply situation
in 2008, and higher corn prices. Furthermore, given these reasons and
uncertainty surrounding the industry in 2008, we see there is increased risk
that the stocks trade down from current levels as we head into 2008.
What's New: Last week the US Senate passed a modified Energy Bill with
an increased RFS calling for 36 billion gallons of renewable fuels by 2022. The
House of Representatives must ratify the bill and the President sign it for it
to become law, but we see these as low hurdles as i) the House already approved
the bill once before and ii) the White House indicated its favor of the bill.
We expect the Energy Bill to be signed in to law this week. Performance of the
ethanol stocks on Friday December 14, 2007, suggests that this event is being
priced into the stocks.
December 12, 2007
Motley Fool calls Cleantech "biggest economic opportunity of the century"
I, uh, tend to agree.
December 11, 2007
UBS bullish on renewable energy
checkout their latest research.
Positive potential catalyst in the US Energy Bill
Positive potential catalyst in Bali talks
Postivie catalyst in new renewables law in Germany.
November 28, 2007
Deal coming together on RFS and CAFE/Energy bill
from CQ today:
Deal Near on Energy Bill to Boost Fuel Economy, Use of Alternative Fuels
The measure also would require billions of gallons of alternative fuels to be incorporated into gasoline over the next 13 years, according to staffers and draft language being circulated.
The compromise, which is expected to land in the Office of the Legislative Counsel for drafting very soon, reconciles the major differences between separate versions of energy legislation that passed each chamber earlier this year.
It would require the nation’s fleet of vehicles to meet a 35 miles-per-gallon fuel efficiency standard by 2020 and would mandate 20.5 billion gallons of ethanol and other biofuels to be in use by 2015.
With crude oil nearing $100 per barrel and gasoline above $3 per gallon, an agreement on corporate average fuel economy (CAFE) standards is perhaps the most significant development to come out of the informal energy bill negotiations, which have been under way for weeks.
Sen. Dianne Feinstein , D-Calif., who championed the fuel economy standard in the Senate, said negotiations were ongoing, but added, in a statement, that “we hope to have something that everybody can support that takes a major step forward.”
Rep. John D. Dingell , D-Mich., chairman of the House Energy and Commerce Committee, was still reviewing the compromise language Wednesday, sources said. But in a letter sent to House Speaker Nancy Pelosi , D-Calif., on Nov. 13, Dingell – who initially supported a less stringent fuel economy bill in the House — indicated that a compromise based on the Senate version was possible.
While the emerging CAFE provision does not set separate standards for cars and trucks, as the House bill would have, it allows for the two vehicle types to have separate fuel economies by assigning a fleet-wide fuel economy average that incorporates both.
November 15, 2007
Reid comments on energy bill/ tax extenders
Alright all you naysayers. An energy package will pass. Reid weighs in yesterday. The problem is the RPS and CAFE standards. Supporters want those and are using the universal support for extending the current alternative energy tax credits (biodiesel) and extension of the RFS as leverage. What I think will happen is that supporters of the tax credit extension and RFS will have to settle for breaking these out and passing them separately. Then the RPS and CAFE will get glommed onto something else or watered down. I predict a 60/40 by Christmas and a 90/10 by end of Q1
EnergyReid Sees Eventual Passage of Energy Tax Package
By: Geof Koss CongressNow Staff11/15/2007PM
Senate Majority Leader Harry Reid (D-Nev.) said today that it may be necessary to separate controversial energy tax provisions from the energy package currently being readied for a final vote, though he did predict that the tax provisions would ultimately pass.Asked this afternoon whether the tax provisions would be included in the final energy bill, Reid said, The answer is yes. We have to have a tax package, because we have to have extenders on alternative energy. But, he added, whether it will all be one package or two packages well just have to wait and see.The dispute over energy taxes is one ofseveral issues that is holding up a House and Senate vote on a final energy package. Senate Republicans oppose tax provisions in the House energy bill that target industry.This week, key lawmakers have suggested that it may be necessary to break the final energy bill into two parts because lawmakers are unable to find sufficient support in the Senate for two other contentious issues: raising federal fuel economy standards and creating new renewable electricity mandates.Reid today said the renewable electricity standards are definitely in consideration. The provision would require that 15 percent of U.S. electricity be generated from renewable sources like wind or solar by 2020.Reid added that he would be meeting with House and Senate lawmakers later today to discuss the bill, but and cited great progressthat could lead to the bills completion before final recess of the year.I really believe we have a strong possibility of being able to complete the legislation on energy before we leave here this year, he said.House Majority Leader Steny Hoyer (D-Md.) yesterday said he hopes to bring the final bill up for a vote in December as well
NPR spotlights Gray's Harbor going green
Listen to the new NPR show today showcasing the re-invention of Gray's Harbor County, featuring Imperium Renewables own Lisa Marthey. Sump'n interesting is happening there.
November 12, 2007
BioFuels can Match oil production (FT)
Lots of extra crop land, technology improvements, this is possible. Don't believe the oil companies.
Biofuels can match oil production By Ricardo Hausmann Published: November 6 2007 18:51
| Last updated: November 6 2007 18:51
Peering into the future seldom produces a clear picture. But this is notthe case with bio-energy. Its long-term impacts on the global economy appear to be pretty clear, making many long-term predictions quite compelling, including the demise of the price-setting power of the Organisation of the Petroleum Exporting Countries and the end of agricultural protectionism.
First, technology is bound to deliver a biofuel that will be competitive with fossil energy at something like current prices. It probably already has. Brazil has been exporting ethanol to the US at an average delivery price of $1.45 for an amount with the energy equivalence of a gallon of petrol. It is doing so profitably and in increasing amounts, in spite of a 54 cents a gallon tariff to protect American maize-based ethanol producers. Many countries are followingsuit.
But ethanol is an inconvenient chemical compound that is corrosive and soluble in water, thus limiting its immediate market to that of a gasoline additive. However, this is just the Betamax phase of the industry. There is plenty of private venture capital money being poured into finding more efficient ways of extracting energy from biomass and delivering it to transport and power systems. Over time, the technology will also become more flexible, allowing more crops to be used as feedstock, not just the current choice of sugarcane, maize and palm oil. New technologies will be able to extract energy from cellulose, allowing the use of pastures such as switch grass as well as the refuse of current food production. The cheque is in the mail.
Second, the world is full of under-utilised land that can grow the biomass that the new technology will require. According to the Food and Agriculture Organisation, the world has a bit less than 1.4bn hectares under cultivation. But using the Geographic Information System database, Rodrigo Wagner and I have estimated that there are some 95 countries that have more than 700m hectares of good quality land that is not being cultivated. Depending on assumptions about productivity per hectare, todays oil production represents the equivalent of some 500m to 1bn hectares of biofuels. So the production potential of biofuels is in the same ball park as oil production today.
Third, even if only partially used, this large potential biofuels supply will cap the price of oil because its supply is much more elastic than the supply of oil. This will cause the price of oil to be set at the marginal cost of bio-energy, independently of the production decisions of Opec. If Opec tries to raise prices above the price at which biofuels become highly profitable, it will only crowd in more biofuels. Oil producers will still be rich, but they will not have incentives to form a cartel.
Fourth, the price of agricultural land will be influenced by its potential use for bio-energy. As farmers choose what crop would suit them best, they will change what they produce and hence the whole system of relative prices of agricultural produce. This will imply a very large increase in the demand for agricultural land. Its price and that of the products that use it intensively such as food and cotton will go up. By how much? This will depend not only on the cost of bio-energy but also on how much additional land is put to use and the degree to which food crops will be complements or substitutes of bio-energy: they would be substitutes if switch grass were planted instead of soybeans; they will be complements if biofuels are made out of wheat stalk. My bet is that they will tend to be more substitutes than complements and the relative price of food will goup.
Fifth, the increase in the price of agricultural land and of food will relieve governments from the current political pressure to protect the agricultural sector. Governments that, as a consequence of the land glut, have been protecting and subsidising farmers will see them grow rich either because they plant biofuels themselves or because other producers switch into them, lowering the supply and increasing the price of other crops.
By contrast, consumers will be less enthusiastic and demand that something be done about the price of food. The obvious solution will be to cut back on protectionism and liberalise trade in agriculture. Sixth, the countries that have the largest endowment of under-utilised lands are in the developing world, especially Africa and Latin America. Putting that land into production will require a type of infrastructure that as opposed to the dedicated variety required by extractive industries usually crowds in other forms of investment by lowering transport costs in ample regions of the country.
Bio-energy will make those infrastructure investments socially profitable, creating a possible stepping stone into other industries.
Some policy action in industrialised countries will be required to make this world possible. Biofuels policy needs to stop being seen through the prism of agricultural support policy which justifies a 54 cents a gallon US tariff on Brazilian ethanol and instead become the purview of energy and environmental policies. Standards will have to be developed to allow the energy and automotive industries to co-ordinate technologies. To make this scenario appealing, the impact of the expansion of the agricultural frontier on the environment and biodiversity, and the distributive effects of the rise in foodprices will have to be addressed.
But these problems seem solvable given the expected political benefits in terms of lower net carbon emissions, more energy security, more efficient agricultural policies and greater opportunities for sustainable development.
The writer is the director of Harvard Universitys Center for International Development
Lehman closes short term trade on Ethanol
In a note today, Lehman took off their short term buy on ethanol producers VSE and AVR and put on the Bear. That is consistent with the closing of the window for discretionary blending as ethanol prices have risen from the summer lows. Lehman was right as the shares both did outperform in the last couple months, but are down sharply today. Lehman says they believe a 40-45% chance of an energy bill passing before end of the year with an increased RFS. I put those chances closer to 60%, so that is where we disagree. I do agree that ethanol is in the shit for the next year though without an RFS.
November 7, 2007
Look Ma I have a big Bubble
Miss the last issue of Wired? Miss the Wired most influential people in technology now driving the clean Tech revolution? Where Your's truly has a big bubble. No it is not going to my head.
October 29, 2007
CARB throws Ethanol a lifeline
CARB today announced it will adopt a resolution stating that all refineries producing petrol sold in the state will have to blend 10% ethanol. Over 1B new ethanol gallons. just in the nick of time.
October 23, 2007
Weak dollar or worldwide demand driving commodities?
If you are a dollar investor you say "global demand" if you are a Euro investor you say "weak dollar". Either way, good for US denominated assets and producers of commodities...
Commodity Indices in Various Currencies (Return Last 12 months)
US British Swiss Japanese
Dollars Euros Pounds Francs Yen
CRB 9.9% -3.0% 0.8% 1.7% 5.8%
DJAIG 7.0% -6.0% -2.1% -0.9% 2.5%
MLCX 22.4% 7.8% 11.9% 13.3% 17.7%
Check out new Northwest energy Angels site!
The angel group I founded has a new site. Submit plans on-line, join as an angel. Join the cleantech deal flow of the northwest!
October 19, 2007
Submit your idea to NW Energy Angels
I started the NW Energy Angels as a way to help northwest companies doing something about energy to connect with investors. I am happy to announce that the group has implemented Angelsoft which allows for on-line submission of your business plan. Submit your plan here:
October 2, 2007
Verasun halts construction on plant
The slowdown is officially upon us.
2007-10-02 08:43:01 EDT***VERASUN HALTS CONSTRUCTION PLANS FOR INDIANA ETHANOL PLANTOne of the first major casualties of thinning ethanol producermargins was announced yesterday with VeraSun Energy saying late Mondaythat it will suspend construction of its 110 million gal/yr ethanolplant in Reynolds, Ind., at least until next year.The suspension, "due to current market conditions," could be liftedin 2008, "depending upon the return of more favorable marketconditions," VeraSun noted."We believe it's important to be mindful of the current marketconditions and manage our business accordingly," said VeraSun ChiefFinancial Officer and Senior Vice President Danny Herron. "Given theabrupt change in market conditions that have seen ethanol prices dropnearly 50 cents per gallon in the last 60 days, it is prudent for us toadjust our current pace of expansion. Due to Reynolds' early stage ofdevelopment, we believe it is wise to suspend investment until themarket provides an acceptable return," he added.VeraSun announced plans to build the Reynolds ethanol plant on April18 and completed site grading and preparation work in August, thecompany noted.VeraSun's news is the first tangible evidence from a major producerof what ethanol analysts have been warning of in recent weeks. In aresearch note, Friedman Billings Ramsey analyst Eitan Bernstein recentlydescribed the ethanol industry's "growing pains" of thinning producermargins and concerns of potential oversupply. He downgraded ratings ofseveral ethanol companies, including VeraSun, and similar reasons causedSoleil Securities Analyst Ian Horowitz to recently downgrade threeethanol companies, including VeraSun.VeraSun has three ethanol plants online -- two in Iowa and one inSouth Dakota -- and expects to bring two, 110 million gal/yr ethanolplants, one in Hartley, Iowa, and another in Welcome, Minn., online bythe first quarter of 2008. Additionally, in August, VeraSun closed onits acquisition with ASAlliances Biofuels, which includes three, 110million gal/yr ethanol plants.The Linden, Ind., ethanol plant began production in July and the tworemaining plants -- in Albion, Neb., and Bloomingburg, Ohio -- areexpected to begin production by the end of the first quarter of 2008.VeraSun Chairman and CEO Don Endres said the company will continueits focus on the ethanol plants currently under construction. "We remainconfident in the outlook for our industry and believe that with ethanolcurrently priced at a dollar less than gasoline, it provides a greatvalue as a high-octane, clean- burning renewable fuel that will driveadditional blending throughout the nation," he added.No further information was available, however more details could beprovided later this morning, when VeraSun's Herron is scheduled to speakat Citigroup's "Ethanol on the Cob Day II" conference in New York. Hispresentation, scheduled for 9 a.m. EST, will be webcast throughVeraSun's website.-Rachel Gantz, email@example.com
People across the country are doing cool stuff with renewable fuels. Orbital Corporation has run E100 in a direct injection engine and generated LOTS of power! Check out the tech details at Green Car Congress.
October 1, 2007
very cool photographs. We trade lots of soybeans on the CBOT. Andreas did a nice photo of it.
September 25, 2007
Further profile and links to more Chris jordan
Chris Jordan on Bill Moyers
Check out this video interview with Chris Jordan, my new favorite photographer who has been discovered by Bill Moyers. Digital images of our overconsumption as a nation.
September 18, 2007
From Bits to Barrels
People keep asking how a tech guy went into the fuel business. It is all here.
Lehman calls bottom on ethanol stocks
We are reiterating our short term trading buy on the ethanol producers.
Over the last two weeks ethanol stocks have fallen 5-18% which we flagged as the potential downside to the price at the time (market has been up 0.8%). We think current lower valuation provides an even more attractive entry point.
Both AVR and VSE are currently trading 10% below replacement cost. If valuations indeed stay here, then we expect new investments to dry up. This may imply that the the industry will move from surplus capacity to being net short by the end of the decade since we do expect the country to move to a 10% ethanol blend over the next 3-5 years. We have started to see that as in the latest update from the Renewable Fuels Association (RFA), the amount of capacity under construction number has dropped by 200 million gallons. Therefore, we don't think there is much further downside from valuation perspective.
On the upside, we revisit the three potential catalysts we talked about two weeks back:
o Corn price: USDA raising corn crop forecast last week further affirmed our view that there appears to be downside to the corn price especially over October and November when the crop is actually harvested. The industry is short on storage capacity to store the record crop and this should drive down spot prices and perhaps more importantly, next year future strip. Also, this year's expected large improvement in corn yield to 155.6 bushel/acre, up nearly 4%, should bode well for the ethanol industry in the long run.
o Ethanol continues to trade at a discount to gasoline which gives significant incentive for refiners to start blending more which should narrow the discount. Winter grade gasoline hits at the retail level in October when we should start to see incremental ethanol demand. Even a small increase in blending from 4.6% to 5% would absorb all the ethanol capacity over the next month.
o Legislation: Timing on this is more difficult to pin down and our Washington Research Group has become more pessimistic about the Conference Committee meeting this year. However, we believe that the stocks were anyway not pricing in any upside from legislation two weeks back and now they are around 10% lower (market has been up 0.8%).
Please let us know if you have any questions.
US Integrated Oil Research
Mansi Singhal +1 212 526 8729
Paul Y Cheng, CFA +1 212 526 1884
September 13, 2007
BIOF auditors resign.
In reviewing some recent SEC filings one of our financial analysts noticed that Deloitte resigned from Biofuel Energy Corp on August 21st.The resignation was one week after Biofuel announced its second quarter results, and two months after Biofuel completed its June IPO. If you recall, DT had given Biofuel a material weakness letter related to the Companys internal controls over financial reporting. In Biofuels S-1 the material weakness was related to a lack of adequate financial systems, lack of adequate accounting staff and lack of written policies and procedures. Biofuel hired Grant Thornton as its new auditors on Sept. 12th.
china air polution
A picture from Beijing at 12:00 noon on a sunny day in April of this year.
They need biodiesel
September 7, 2007
Greenwood Technologies wins award
Greenwood Technologies (www.greenwoodfurnace.com/) won the Brilliant Innovations award in Distributed Energy for its clean burning wood boiler (furnace) that heats an entire home and provides all hot water. It is up to 85% efficient and enables home owners to replace oil, natural gas or propane as a fuel source for heating their home and replace it with wood. Through a process called wood gasification, the Greenwood burns not only the wood, but the smoke and gases released from the fire.
August 29, 2007
more on boeing's biofuel plans
the key is cold flow properties and heat rate. It is COLD in them thar wings. -50 F. and the power per gallon needs to be the same as jetA which is hard to do with veggies. But it can be done :)
August 28, 2007
Hawaii gas prices last week
glad you don't live there?
Good analysis here on Seeking Alpha. The sector has overcorrected in my opinion.
July 24, 2007
My new art piece from Chris Jordan. Amazing.
Depicts 24,000 logos from the GMC Yukon Denali, equal to six weeks of sales of that model SUV in 2004
July 20, 2007
Want to know what is REALLY going on at GreenFuels?
GreenFuel in Boston, MA is one of the first companies to attack growing algae on a commercial scale for carbon sequestration and possibly biofuels. You may have read on CNET and other places rumors of change. Read the actual CEO letter to the team here: Xconomy � Blog Archive � The GreenFuel Letter
Why is Saudi Arabia cutting oil production while prices are high?
Because they can and we have no alternative.
As the US Senate contemplates a withdrawal of forces from Iraq and as oil prices approach record highs, Saudi Arabias oil cuts continue to keep markets tight. Riyadhs defiance may be linked to internal politics and its post-US occupation Iraq strategy.
Read the Lehman report here: THE_LOGIC_BEHIND_SAUDI_OI_100986137_424505.pdf
July 19, 2007
Support clean energy in the Farm Bill
Go here to support bioenergy funding in the farm bill: Farm Energy
July 13, 2007
More rockers jump on biofuels/renewable energy
Bob Geldof praises potential of biofuels for Africa
FO Licht's World Ethanol & Biofuels ReportThursday July 12 2007
Irish rock star and political activist Bob Geldof has thrown his weight behind a new project aimed at producing electricity from plant seeds in Africa. Geldof has joined Britain's Helius Energy Plc as a special adviser to support the company's bioenergy projects across the continent, which is seeing demand for power surge and which feels the impact of high oil prices more than any other region, reports Reuters.
Helius, listed on London's Alternative Investment Market (AIM), is currently in discussion with South Africa's Eskom to supply the power utility with renewable energy, generated from biomass crops such as jatropha curcas, the seeds of which are a biodiesel feedstock.
Speaking at a press conference in Johannesburg, Geldof said that bioenergy could simulate the economic growth required to lift Africa from poverty. "I do not use the word life-changing lightly," Geldof said, adding that jatropha curcas was the first solution that he had seen in his 23 years of involvement with African causes that offered Africans jobs, cash crops and economic power.
He pointed out that the failure of the Doha Development Round the World Trade Organisation negotiations that aimed to lower trade barriers around the world, permitting free trade between countries of varying prosperity and the unlikelihood of a standalone trade agreement for Africa, made it all the more important to find a solution for Africa's farmers. Biofuels offer such a solution, he said.
Geldof spoke to the media after returning from a trip to Swaziland where he visited jatropha curcas plantations planted by biodiesel producer D1 Oils. Pointing to a jatropha curcas seedling on the table, Geldof said that "the potential effect of this little fellow is enormous".
Geldof said that he was impressed by the "life-changing" potential that the cultivation of jatropha curcas trees could have on poverty-stricken African communities. The oil expelled from the tree's seeds can be processed into biofuels and the remaining plant material can be used to fire biomass energy-generation plants.
Geldof was accompanied by Helius Energy chairperson Alex Worrall and Helius Energy co-founder and D1 Oils Africa CEO Demetri Pappadopoulos. Pappadopoulos said that every hectare of jatropha curcas would produce 2.7 tonnes of oil and 4.4 tonnes of biomass.
D1 Oils Africa has obtained rights to plant more than 40,000 ha of jatropha curcas in Africa, including Swaziland and Zambia. However, the South African Department of Agriculture is yet to publish its policy on Jatropha curcas, which is currently viewed as an invasive tree.
Pappadopoulos said that the first power from jatropha curcas biomass could be produced in the next three years when D1 Oils Africa expects to harvest the first commercial crops in Swaziland and Zambia. The company has just signed a joint venture with global oil giant BP.
July 11, 2007
More on Hot Fuel
Oil Watchdog has some updates on the Hot Fuel scandal: Oil Watchdog: Articles Hot Fuel. apparently there is a meeting today of the National Council of Weights and Measures to vote on if America will start selling fuel with a temperature adjustment. And then the revelation that Tesoro knows there is liability and is trying to get out in front of the issue by putting warnings labels on their gas stations. That is a sure sign the industry is bracing for a fall. Look for other oil companies to flow suit.
NW energy Angels network making deals
The energy angel network I founded is making deals happen..
Angel Investments are Fueling Pacific Northwest Energy Sector
The Northwest Energy AngelsTM accelerates energy investment in the region with six deals funded in first half of 2007.
SEATTLE, WA - June 18, 2007 - The Northwest Energy AngelsTM group has completed six energy-sector investment deals in the first half of 2007, tying the total number of investments the group made in 2006.
The Northwest Energy Angels invested $180,000 in six deals during the period January through April, 2007. In comparison, the group completed six investments with a total value of $368,000 during calendar year 2006. Twenty-eight companies have presented to the group since its inception in January 2006.
These investments are crucial to companies from the time they bring their innovations out of the lab until they find a utility and local government to work with, says Jeff Morris, Director of the Northwest Energy Technology Collaborative which facilitates the investment group.
Morris notes that the Northwest Energy Angels is unique in that it is the first angel investment group in North America to focus only on the energy industry, including alternative sources of energy. The group has 40 members covering Oregon, Washington and British Columbia.
Kirk Washington of British Columbias Yaletown Venture Partners believes that the entrepreneurs and the regional focus on sustainability create unique clean technology investment opportunities.
We are strong believers that the Pacific Northwest, from Portland, Oregon to Vancouver, British Columbia, with Seattle as the centerpiece, will become an important new energy economy hub, says Washington, whose Yaletown Venture Partners focuses on early-stage clean technology and information technology investments.
Companies receiving investments from the Northwest Energy Angels since 2006 include: ADI Thermal Technologies, Delaware Power Systems, Novinium, Propel Biofuels, Ridgeline Energy and Sieber Energy.
With three additional investment meetings scheduled in 2007, the Northwest Energy Angels group is supporting the regions surging development in energy alternatives.
July 9, 2007
De Beers Fuel bites the dust (as I expcted)
The road to renewable fuel utopia will be paved with the bodies of many who failed. About a year and a half ago, De Beers Fuel in South Africa started making outrageous claims about their ability to grow biodiesel from algae on a massive scale. Well the deal has now fallen apart: Bioenergy pact between Europe and Africa and been exposed as a scam. The buyer should as always beware. Most things that sound too good to be true usually are just that.
On the other hand, do not throw the baby out with the bath water in the Algae to Biodiesel field. There is promise there. Still alot of work to do, but much promise from serious scientist and engineers working on the problem. I do expect to be reviewing some companies soon here that I believe are on the right track.
Off hand, one of those is Solazyme with whom Imperium Renewables has a development deal to produce some algae oil for biodiesel. They are doing a number of things right.
July 8, 2007
What is after the Inconvenient Truth? 11th hour action
This is Leonardo DiCapprio's film on environmentalism/green. The Eleventh Hour. There is actually a plot and it is more than just a powerpoint. Go see this film
June 26, 2007
What does your Presidental candidate think on energy?
All collected for you here courtesy of UTube. Presidential candidates on energy
June 25, 2007
Ranting against American consumer culture
The drive for clean and green stuff/energy, etc. is in part a reaction to the supersized American consumer culture in general. Big houses, big cars, lots of stuff. All requiring more and more energy and fuel to drive around and get it, play with it, go to the show, etc. Browsing the depressing and completely paranoid LATOC site, I came across an interesting tidbit graphic:
Yes you read that right. 20.2 square feet of retail for every man, woman and child in America. 10X the world wide average. Now the Europeans are small countries and we are a big country with lots of land, so you would expect more, but 10X? Wow. I don't really have a personal problem with that. I love to shop. All that consumerism and retail is the backbone of the US economy. Just because we spend more than everyone else doesn't mean we can't afford it. Or that we should all start living in shoeboxes like the French. But it does give one a moment of pause. Do we really need 10X the retail of the rest of the world? What if we lived closer to each other and didn't see 10,000 commercials a year. Would we be happier with less? Hummmm...
Qatar GTL facility faces another setback
The proponents of GTL (a diesel alternative made from natural gas) were shown another setback today as Qatar reaffirmed no plans to use the fuel locally. Green Car Congress: Qatar Has No Plans for Wide-Spread Use of GTL Fuel. also read the comments from some very knowledgable people on the bad economics of GTL versus CNG. It is WAY cheaper to compress Natural Gas or Liquify it than it is to make a distillate like product through GTL. Ask the Oryx GTL which has spent over $1B and the thing still doesn't work.
June 15, 2007
Crude continues role, I bet ovefr $70 by the 4th
Brent Crude already over $70. WTI will be there soon.
Crude oil futures rose to $68 a barrel Friday for the first time since March, extending a rally that was sparked earlier in the week by renewed worries about U.S. gasoline supplies and violence in the Palestinian territories. Gasoline futures led the rally, as traders continued to worry about U.S. refiners' ability to meet summer demand two days after the Department of Energy reported an unexpected drop in U.S. refinery utilization. "I still think we're reacting to the wildly bullish DOE report, which showed continued strong demand for gasoline and the inability of refiners to produce, and which set the tone for the week," said Phil Flynn, an analyst at Alaron Trading Corp. in Chicago. "On top of that, there is concern that the fighting in Gaza is going to spin out of control and that is making people reluctant to go home short." The July crude contract on the New York Mercantile Exchange jumped 35 cents to a high of $68 a barrel, the highest level for a front-month contract since March 27, when futures rose as high as $68.09 a barrel. A breach of $68.00-$68.07 a barrel could set up futures for a push to $70.00 a barrel, a level not seen since last September. The August Brent contract on ICE Futures, trading on its first day as the front-month contract, was down 17 cents at $71.19 a barrel after rising as high as $71.50 a barrel. Reformulated gasoline blendstock, or RBOB, for July delivery rose 3.29 cents to $2.2576 a gallon. July heating oil gained 16 points to $2.0177 a gallon. Gasoline futures, which fell through much of May and early this month, rose Wednesday after the DOE's Energy Information Administration reported that refinery utilization fell by 0.4 percentage point to 89.2% of capacity last week while gasoline stocks remained flat at 201.5 million barrels, well below their five-year average for this time of year. Valero Energy Corp. (VLO) shut a hydrocracker unit at its 340,000-barrel-a-day Corpus Christi, Texas, refinery on Thursday, due to the loss of a filter seal, according to a report filed with state environmental regulators. A week ago, Valero reported the shutdown of a hydrocracker unit at the Corpus Christi plant due to a malfunction in associated equipment, a separate filing to the TCEQ said. Concern over Middle East stability grew a day after the Palestinian militant group Hamas gained control of Gaza Strip. Israel's foreign minister said a proposed multinational force deployed along Gaza's border with Egypt must be willing to fight Hamas to stop weapons smuggling in the area. Traders worry that the factional fighting among Palestinian groups could snowball and further destabilize the region, home to two-thirds of the world's oil supplies, Flynn said. "The Middle East is definitely supportive, not that it's going to affect supplies, but people are going to be uncomfortable going home short with all the uncertainty," he said.
The battle is on for the 2007 Energy bill
Check out all the ammendments in only the first 2 days: Green Car Congress: Update on the US Senate Energy Bill, Part 2
June 13, 2007
Bullish DOE report on refined products
Against average and last year, using the DOE data, crude oil stocks are 24.6 mb above average and 2.8 mb above last year, gasoline stocks are 10.3 mb below average and 12.8 mb below last year and distillate stocks are 6.3 mb above average and 2.6 mb below last year. In the distillate details, diesel fuel stocks built 3.1 mb and are 18.3 mb above average and heating oil stocks fell 2.8 mb and are 10.6 mb below average. On the consumption side, year-on-year, gasoline demand rose 1.4%, jet decreased 1.6%, distillate rose 2.9%, resid lifted by 36.2% and overall demand was up 2.2%. The SPR was steady at 690.3 mb.
The report is bullish. The market anticipated significant builds in both products and both disappointed. Refinery utilization falling for the second consecutive weak is also supportive. The flat gasoline inventory number ends a five-week streak in which gasoline stockpiles built 8.4 mb.
June 12, 2007
IEA raises forecast for fuel demand
IEA raises forecast for fuel demandThe International Energy Agency raised its forecast for fuel demand this year. The IEA said global demand is expected to rise 2% to 86.1 million barrels a day in 2007 from a revised 84.5 million barrels a day in 2006. That's 420,000 barrels more than the IEA projected in May and comes after higher-than-expected demand from nations including Indonesia and Singapore. The agency said in its monthly report that it's difficult to escape the conclusion that the oil market will be tight in the second half of the year.
June 11, 2007
The details on Hot fuel
check out the chart on gallons of energy lost that shows in each state will loose this summer (alaska will pick up a few) to hot fuel. Then there are the dollars. This is from a congressional report on the matter that you all should read. Who was the chair of the committee? Sometimes presidential candidate Dennis Kucinich. I wish this were in the hands of someone with a bigger and more respected microphone. This is important stuff.
Watch your mileage go down in the summer: the Hot Fuel Scam
Just another way Big Oil will screw americans out of $1.4B this summer: Oil Watchdog: Articles
We're happy to see Congressional validation of the billion-dollar hot fuel ripoff: gasoline sold at high temperatures, offering less energy than motorists are paying for. Steve Everly, the Kansas City Star's deep digger on the "hot fuel" issue, reports on today's Congressional study showing U.S. motorists will pay $1.4 billion extra over the summer months for gasoline that expands at high temperatures, putting less energy per measured gallon in your tanks.
June 7, 2007
OPEC fears of biofuels realized
Before you get too cozy that biofuels will have a walk to the altar, read this from AGE today:
"Earlier this week OPEC warned the West that the biofuels push may drive oil prices through the roof. OPEC Sec. Gen. el Badri suggested the cartel may cut its production investment in response to Western biofuels investments. Though OPEC has voiced its skepticism with regard to biofuels, this is the most direct threat made by the producer group."
I would say that is a threat. And a real one. And what you would expect from an industry with a monopoly on a finite dirty product. If we want alternatives, they are going to make us PAY THROUGH THE NOSE for thier existing product while we scale. They are going to SQUEEZE EVERY LAST PENNY OUT OF US. This is the strategy I have been predicting they would follow and now OPEC has confirmed it in this bold faced threat. That tactic, while short term painful also has the consequence of probably INCREASING our rush to alternatives rather than slowing it down. Full steam ahead!
June 5, 2007
OPEC hesitant to raise production
from AGE today
OPEC wary of raising crude outputThe secretary general of OPEC said today the cartel would need evidence of a sustained drop in oil inventories before members decide to pump more. The comments from Abdullah al-Badri are the latest sign that OPEC will not rush to open the taps despite prices at $70 a barrel. The group next meets to set policy in September. Analysts have forecast global oil prices could rally above $80 a barrel this summer due to tension in the Middle East, an expanding Chinese economy and a reluctant OPEC.
Stealing gas at gunpoint
The chaos is starting: Salt Lake Tribune - Customer forced at gunpoint to pump gas into suspect's vehicle
June 1, 2007
Force majeure in the refinery business
Force Majeure: GET READY, I AM GOING TO DEFAULT ON ALL MY OBLIGATIONS AND THERE AIN'T A THING YOU CAN DO ABOUT IT! (my definition).
Not words you want to hear actually being used in any business even closely related to yours. The last time I heard these words in use was last fall when the worlds largest Methanol plant in Trinidad used them to shut down and bail out on all their supply contracts. The price of methanol immediately doubled. The plant recently came back on-line and the price fell in half. That is the power of Force Majeure. While this does free up some crude for other refineries, the fact is THERE ARE NO OTHER NORTH AMERICAN REFINERIES not running all out. Then there is the sticky question of getting canadian crude to other refineries. This refinery which is down is in Whiting, Ind. (did you know it came on line in 1890 OVER A CENTURY AGO!!) is very close to Canada. I bet you dollars to doughnuts it receives it's Canadian Crude via pipeline. Now, what other refineries are on that pipeline? Humm. So the list of possible off-takers for all that left-over crude is getting short eh? That is why refined products shot up. Even with more crude on the market, refinery capacity is key and getting the crude economically to the refinery is key as well.
It is going to be a long summer.
thanks to AGE for the note::
Oil--Crude oil futures shot above $65.00 a barrel Friday after BP Plc (BP) said it had cut its purchase of Canadian crude to its partially shut Whiting, Ind., refinery. BP said it had declared force majeure on its purchase of Canadian crude, essentially notifying suppliers that it could not meet its obligations to purchase Canadian oil for the refinery because of an extended downtime at the 410,000 barrel a day Whiting plant. A person familiar with the plant's operations said two key crude units that have been shut since a late March fire will take longer to restart than initially expected. The force majeure in itself means less demand for crude oil and is seen as negative for crude prices but the delay in restarting the two refinery units at the outset of the summer driving season unnerved traders and sparked a rally in gasoline futures. Crude futures, already up on concern about supplies from Nigeria and Iran, followed gasoline higher. "It's clearly bullish for gasoline," said Peter Beutel, president of Cameron Hanover, a trading advisory firm in New Canaan, Conn. "To hear that a major refinery in the Midwest is not coming back in the next couple of weeks but in the next seven to eight weeks puts us that much further behind (in terms of supply) and is supportive of gasoline prices." The July crude on the New York Mercantile Exchange gained $1.08 to $65.09 a barrel. The July Brent contract on ICE Futures rose 98 cents to $69.02 a barrel. Reformulated gasoline blendstock for July delivery jumped 4.18 cents to $2.2450 a gallon. July heating oil rallied 3.97 cents to $1.9228 a gallon. Final settlement prices weren't in yet. Repairs to two of three crude units at the 410,000-barrel-a-day BP refinery are taking longer than expected, said a person familiar with the plant. One unit, which was to resume operations in June, is now seen down as late as early July and work on the other, previously seen restarting in early July, is seen taking until August or September, the person said. "Obviously, the news is bullish for gasoline," said Phil Flynn, an analyst at Alaron Trading Corp. in Chicago. "It means they can't produce gasoline in the Midwest at a time when the market is already tight and prices are near record highs." The delay in restarting the two BP refinery units is likely to keep U.S. refinery utilization rates relatively low in the coming weeks. Refinery utilization remained was flat at 91.1% of capacity last week, the Department of Energy's Energy Information Administration reported Wednesday.
Refined products output still slow releative to expected demand
from AGE today. Stage is still set for $4.00 gas.
Oil, gasoline rise on signs supply deficit wont narrowCrude oil and gasoline rose on concern that U.S. refiners aren't increasing motor-fuel production enough to replenish stockpiles. U.S. gasoline supplies in the week ended May 25 were 6.7% lower than the five-year average for the period, the Energy Department said yesterday. Refineries operated at 91.1% of capacity last week, unchanged from the week before. One analyst told Bloomberg News that there's been a steady recovery in gasoline supplies but it's not enough to ease concerns about the driving season. Crude oil for July delivery rose $1.03, or 1.6%, to $65.04 a barrel at 12:53 p.m. on the New York Mercantile Exchange. Gasoline for July delivery rose 5 cents to $2.2532 a gallon.
May 31, 2007
Detroit sticks its head in the sand and tries to pull all americians in there with them.
May 30, 2007
Mark Jacobson's Ethanol study home page
One of the anti-ethanol studies came out of Stanford from this Mark Jacobson. Immediately the EThanol industry and Vinod bashed the guy as a sell-out to Exxon. On his home page: E85vWindSol you can read the report, the industry critique and his response. He claims no Exxon funding directly and that he used a NASA computer. But Exxon IS a big funder of Stanford overall. I e-mailed him and here is his response:
Thanks for your email. That's a strange question to ask, but the answer is that the funding came from my Stanford University salary with computer support from NASA. I have no corporate sponsors nor have I ever performed research in my career at the request of any corporation. What makes you ask this question? The conclusions of the study imply that both gasoline and E85 will kill thousands of people each year as gasoline does today, and should be eliminated in favor of cleaner technologies. I think this is common sense and it doesn't require a corporate sponsor to draw such a conclusion.
The published paper and responses to industrial people and other advocates are located at
My summary: He is right that any internal combustion of anything is worse than electric or fuel cell. Unfortunately we are going to have internal combustion and diesel engines on the road for many many years, so we better get alternatives for them. We are not going to change the fleet in time.
May 26, 2007
Check out the trailer for a new documentary I am in
May 22, 2007
Soap and Detergent association joins NBB in fighting Renewable Diesel tax credit
What are the Republican front runners saying about energy and Iraq?
Read the summary my DC people put together.
On balance Guiliani gets my vote on these two issues.
Major Republican Presidential Candidates.doc
May 21, 2007
Gas prices keep on climbing, new all time high!
Last week I reported on the new all-time high price for a gallon of gasoline, and am doing so again this week. Don't be surprised if next week reads like the same report.
The Energy Information Administration said today that the average price paid by an American for a gallon rose 11.5 cents to $3.218, which is the highest level ever reached for the fuel in absolute terms. Relative to inflation, we might break that record next week: the highest ever inflation-adjusted price is $3.223, reached in March of 1981.
The current price is 32.6 cents above one year ago.
With only two exceptions, gasoline prices have risen every week since January 22, which is a rise of $1.053 -- a 48.6% increase. The price on Jan 22 was the lowest since December 5, 2005.
The Gulf Coast rose the most, up 17.7 cents. The area is the location of the largest concentration of U.S. operable refining capacity.
The Midwest price rise marked its own regional record, jumping by 15.4 cents, which is up by 56.9 cents from one year ago. BP's Whiting refinery in Indiana is operating at only half of its 410,000 barrel per day capacity after suffering both a fire and other operational issues.
If the average price rises by just .005 cent next week, we go back to the inflation-adjusted future of 1981. Of course, if we adjust the price per gallon for gasoline's carbon emissions and geopolitical volatility, then a gallon would arguably not be cheap at any price.
East Coast: $3.097, up 11.6c
Midwest: $3.326, up 15.4c
Gulf Coast: $3.092, up 17.7c
Rocky Mountains: $3.265, up 7.2c
the new carbon neutral business plan
May 16, 2007
EIA reports RECORD gas prices...and the kids aren't even out of school!
Aron pointed out to me that Monday we hit record gas prices in this country, higher than Katrina levels. In honor of this day I wore my new shirt.
The Energy Information Administration announced today that the average retail pump price for regular gasoline in the U.S. reached its highest level ever, rising 4.9 cents per gallon to $3.103.
The previous record was made after Hurricane Katrina battered refineries on the Gulf Coast. The current pump price is 3.4 cents higher than then.
Pump prices have risen, except for two exceptions, every week since the 22nd of Jan, when the price hit it lowest level since Dec 5 of 2005. Since Jan 22, gasoline has risen by a total of 93.8 cents, which represents a rise of 43.3%.
(These numbers are in absolute terms; on an inflation adjusted basis, the highest price ever is from March 1981 when a gallon of regular was at $3.223.)
Regionally, the West Coast, Midwest and Rocky Mountains made the new all-time highs to lift the national average, with the East Coast and Gulf Coast hitting the highest figures since Aug of 2006.
Regional prices for the week
East Coast: $2.981, +2.3c Midwest: $3.172, + 9.8c Gulf Coast: $2.915, +4.5c Rocky Mountains: $3.193, +10.3c West Coast: $3.378, +0.5c California: $3.45, --1.1c
May 14, 2007
Bush comments on GHG and oil independence
CQ TODAYMay 14, 2007 2:20 p.m.
Bush Orders Regulatory Initiative to Cut Gasoline Use
By Jeff Tollefson, CQ Staff
President Bush announced Monday that he plans to implement regulations on biofuels and automotive fuel efficiency before leaving office in 2008, potentially parallelling congressional Democrats initiatives on both fronts.
The president announced nothing substantively new but said he plans to pursue administratively the goal he laid out in his State of the Union speech in January of cutting gasoline consumption by 20 percent in 10 years.
The 20 in 10 proposal includes a federal mandate for the use of 35 billion gallons of alternative fuels largely such biofuels as ethanol as well as a 4 percent annual increase in automotive fuel efficiency standards beginning in 2010.
Bush said the initiatives would reduce the nations dependence on oil and cut greenhouse gas emissions. He cited the regulations as a response to the Supreme Courts 5-4 ruling last month that the administration has the authority to regulate greenhouse gases.
Bush said his decision to move forward with regulations, which would not require congressional approval, is not intended as a substitute for congressional action on the matter. The White House has proposed legislation incorporating Bushs plan but the response by leading Democrats has been luke warm at best.
Advocates of boosting the Corporate Average Fuel Economy standards blasted the presidents proposal because it assumes, but does not require, a 4 percent annual increase in gasoline mileage standards. Similarly, Democrats and environmentalists have criticized the proposed alternative fuels standard because it would include coal-based transportation fuels, which would at best do little to reduce greenhouse gases and could increase emissions.
Bipartisan legislation addressing both biofuels and automotive fuel efficiency is pending before the Senate. The Energy and Natural Resources Committee has approved legislation (S 1321) that would mandate the use of 36 billion gallons of biofuels by 2022., while the Commerce, Science and Transportation Committee last week approved a bill (S 357) to boost mileage standards by 40 percent by 2020.
House leaders plan to take up legislation on alternative fuels as part of a broader energy independence package in July, although it is unclear when or how legislation addressing automotive fuel efficiency would move in that chamber.
The presidents proposals do not directly address the Supreme Courts April 2 decision on greenhouse gases.
In a 5-4 decision, the court rejected the administrations position that it does not have the authority to regulate carbon dioxide under the Clean Air Act.
The court stopped short of ordering the Environmental Protection Agency to regulate the carbon dioxide from automobiles, but it said the administration could reaffirm its decision not to regulate the gas only if it can show that it does not contribute to global warming and impact human health.
The increase in atmospheric carbon dioxide concentrations is widely believed to be the primary culprit in global warming.
Truckers go big for biodiesel
New news over at e T r u c k e r - News - eTrucker.com . Summarizing all the trucking industry endorsements of biodiesel. The momentum is going.
May 13, 2007
What does McCain think about Energy Policy?
Click on over here and watch the video and read the pitch. John McCain 2008 - John McCain for President. Alot of posturing and tying energy security to national security. Not much new, but a VERY warrior approach to the policy. Check some of it...
"Al Qaeda plans for attacks on oil facilities in the Middle East to destroy the American economy. A little over a year ago, a suicide attack at a major Saudi Arabian oil refinery came close to disabling its target. Had it succeeded, it would have driven the world price of oil above $150 dollars a barrel -and kept it there for a year.
We're one successful attack away from an economic crisis. The flow of oil has many chokepoints - pipelines, refineries, transit routes, and terminals; most of them outside our jurisdiction and control. Our enemies understand the effects on America of a significant disruption in supply - a crippled transportation system, gasoline too expensive for many Americans to purchase, businesses closed.
Al Qaeda must revel in the irony that America is effectively helping to fund both sides of the war they caused. As we sacrifice blood and treasure, some of our gas dollars flow to the fanatics who build the bombs, hatch the plots, and carry out attacks on our soldiers and citizens. Iran made over $45 billion from oil sales in 2005, and it is the number one state sponsor of terrorism."
the solution: free markets, american innovation:
"The strategy I propose won't be another grab bag of handouts to this or that industry and a full employment act for lobbyists. It will promote the diversification and conservation of our energy sources that will in sufficient time break the dominance of oil in our transportation sector just as we diversified away from oil use in electric power generation thirty years ago; and substantially reduce the impact of our energy consumption on the planet. It will rely on the genius and technological prowess of American industry and science. Government must set achievable goals, but the markets should be free to produce the means. And those means are within our reach."
short on substance. but in the right direction. I wish he had called for a carbon tax. Or for fully reflecting the cost of oil in the price of oil.
May 12, 2007
Diesel Particulate matter shown to impair blood flow to bone marrow
Remember the first studies on second hand smoke? Here they come for second hand exhaust effects: Green Car Congress: Chemical Component of Diesel PM Can Compromise Blood Flow. Expect more. When the full health effects of exhaust, diesel in particular, are known, the public will be outraged.
May 5, 2007
What does the DOD think of peak oil and future oil supplies?
"The US soldier today uses 16 times the oil than the WWII soldier."
when will TSHTF?
A reader over at Peak Oil: Life After the Oil Crash has analyzed the negative economic and social impacts of oil peaking on US, Soviet Union, Iran, Indonesia and Iraq over the last two decades. The data suggest that 3-5 years after the "peak" severe change happens. Using Mr. Matthew Simmons' educated guess as December, 2005 as being the world peak, then we could begin to expect to experience these adverse effects as early as 2008.
That is called when TSHTF. I hope that reader is wrong, but fear he is not far off.
April 30, 2007
Nigeria: the natural resources curse
If you want to know what oil "weath" has done to Africa, read this report from AGE on Nigera. AGE-GEO Report - Nigerian Elections.pdf. Average per capita annual income in 1960, $1500, today $800. Over 70% of the population exists on $1/day. From 1960-1999 over $340B in oil revenues stolen by politicians. You know if they were growing crops for biofuels, rather than digging highly fortified holes in the ground, the money would be much harder to steel from the people.
Check out climate360.org
Check out Climate360.org. A new site to help funding institutions find climate friendly ways to give. "Putting it all together" they claim. Trying to be a hub for climate change donors. I just signed up and will monitor the RSS feed to see if they come up with something useful. There is definitely a need to help capital find projects in carbon.
More bad news
Sometimes I don't even want to open Aron's e-mails with oil updates. As I predicted, the crazies are waking up to spring and gearing up for an active summer. Check out the crazieness in oilland this week:
In Iran, the BBC reports police are not only cracking down fiercely against women wearing bad hijab, or un-Islamic clothing, the crackdown also targets men sporting Western hairstyles. Hair stylists and barbers can lose their licenses if they give such a haircut, pluck eyebrows, or serve men wearing ties. In the past week some 16 k women and another 500 men have been warned about their improper clothing.
Last week we reported the Saudis arrested 172 suspected al Qaeda militants who were targeting oil installations and refineries along with military bases, prisons, and unnamed public figures. Details of the arrests and plans are emerging. In raids across the kingdom over the last nine months, the Saudis confiscated over $32.4 million. MENL reports the would-be attacks included targets in Egypt, Kuwait, and Saudi Arabia. Apparently, the militant training included pilot classes, suggesting a 9/11-type attack on the oil infrastructure was in the works.
We note the arrests follow the reemergence of the Sawt al Jihad, an online magazine that was regularly published during the height of al Qaedas efforts in Saudi Arabia during and prior to 2004. Since February though, the biweekly publication hasnt been so regular, but in the last edition the magazine suggested those responsible for the Abqaiq, Saudi Arabia oil facility attack in February of last year were still alive and fighting. That attack was the most notable attempt targeting Saudi infrastructure. Those involved now have had over one year to learn from their failed attempt. Sawt al Jihads February issue suggested they were rapidly preparing for round two.
If al Qaeda was to use a 9/11-style attack, we note the Saudis have an air force supplied by the U.S. Outside of Israel, it is the most advanced in the region. Following the recent arrests, we anticipate the Saudis will institute no-fly zones around their infrastructure. Unfortunately, despite the Royal Saudi Air Force possessing advanced technology, their ability to identify and react to threats remains in question. Thus, we deem the possibility of an airborne suicide attack as a remaining threat.
In Nigeria, EI reports militants are reenergized following last weekends elections. In the elections, Umaru Yaradua won, receiving 70% of the vote. He was the chosen successor of President Obasanjo. During the previous weekend, the ruling Peoples Democratic Party won 26 of 32 gubernatorial elections. It seems Obasanjo and the PDP worked too hard to ensure their place in government, and the seemingly rigged landslide victories have enraged the militants. Niger Delta residents fear a new resolve amongst MEND and other militant groups will come especially if Shells production in the region restarts.
World Tribune reports Palestinian insurgents are using recruited Westerners as human shields, weapons and money couriers, and as provocateurs to portray Israel as an aggressor. The International Solidarity Movement (ISM), a group with ties to Hamas and Fatah, recruits university students in both the U.S. and Europe. They then use the foreigners, posing as Israeli tourists to gain access to Israel and the West Bank. Amongst the tactics taught are for the volunteers to harass Israeli citizens and soldiers, provoking a violent response and then filming their reactions for media release in their origin nations.
June Brent futures: 68.25 -0.16
OPEC Basket: 4/27/07 63.89 -0.14
Alaskan North Slope: 4/27/07 66.84 +1.40
Cash Henry Hub: 7.7600 +0.3300
U.S. Average Ethanol: 4/27/07 2.3857 +0.0082 (per gallon)
Goldman oil quote
While I disagree with Arjun Murti over at Goldman Sachs on biofuels, he said something interesting in his latest report out today:
"Oil demand growth expected to exceed non-OPEC crude oil supply growth as well as refining crude distillation capacity growth (ex-non-Reliance Asia) over the next several years." followed by "OPEC crude oil and worldwide refining spare capacity are forecast to remain tight over remainder of this decade."
only one way to read that. Buckle up. thank you sir, may I have another?
Canada sets new carbon reduction targets and methods
From Goldman today
"On April 26, the Canadian government announced policies calling for an 18% reduction to 2006 emissions intensity levels in 2010 and 2% per year afterwards. Companies may: (1) reduce emissions outright; (2) contribute an initial C$15/ton to a technology fund to offset a diminishing percentage (beginning at 70%) of required emissions reductions; (3) contribute to Kyoto Protocol-approved projects to offset 10% of required reductions."
My take; good for biodiesel. more pressure for US limits. US will put in limits around the presidential campaign, but they will be less stringent.
Over $1000, $4000 to go to ride with Lance against Cancer!
Click on over to my donation page for the 2007 LIVESTRONG Challenge and help support the Seattle Biodiesel team ride against cancer. Diesel emissions are a major cause of cancer. Sunday I went for a 32 mile ride along the Burke Gilman (no cars) and managed to beat the rain home. Legs felt good. Share the love.
New Green TV an easy way to keep up on green stuff
Check out this new site that recently launched if you prefer videos of your green news. GreenEnergyTV.com: What is renewable energy? Learn about this, wind power generators, and more!
April 19, 2007
How much carbon does an average car put out in a day?
April 17, 2007
new study on private data shows oil reserves not being fully replaced; read peak oil is here
NEW YORK--(BUSINESS WIRE)--April 16, 2007--The world is currently producing more oil annually than it is replacing with new reserves. That sobering conclusion emerges from a new survey of global liquids reserves published by Energy Intelligence.
In contrast to the gradual rise in global oil reserves that has been reported annually in most surveys based on public sources, the new assessment shows that the trend in worldwide liquids reserves is actually one of stagnation and modest decline. The PIW Reserves Survey shows global oil reserves declining by almost 13 billion barrels, or 0.9%, over the last two years to 1.459 trillion bbl at the end of 2006 on a "proved plus probably" basis. Global oil reserves are liquid hydrocarbons, natural gas liquids, tar sands and crude oil, that are economically recoverable at current prices.
new study on private data shows oil reserves not being fully replaced; read peak oil is here
NEW YORK--(BUSINESS WIRE)--April 16, 2007--The world is currently producing more oil annually than it is replacing with new reserves. That sobering conclusion emerges from a new survey of global liquids reserves published by Energy Intelligence.
In contrast to the gradual rise in global oil reserves that has been reported annually in most surveys based on public sources, the new assessment shows that the trend in worldwide liquids reserves is actually one of stagnation and modest decline. The PIW Reserves Survey shows global oil reserves declining by almost 13 billion barrels, or 0.9%, over the last two years to 1.459 trillion bbl at the end of 2006 on a "proved plus probably" basis. Global oil reserves are liquid hydrocarbons, natural gas liquids, tar sands and crude oil, that are economically recoverable at current prices.
April 5, 2007
New DVD on clean energy features Imperium Renewables
Veracity Productions | Energy Rush - Innovators and Entrepreneurs, click on Green is the New Red White & Blue.
April 4, 2007
Gas market tighter than a drum, volatility at all time high
While I don't agree with the title of "chaos theory", this article is one more example of how tight the supply/demand equation is in the US for gas and how sensitive price is to ANY and all disruptions, rumors, etc. I mean come on, two animals getting fried causing $.07 increase in west coast gas prices. That is tight!
Chaos theory at work in gas price
Apr 2, 2007 10:09 AM, By Hembree BrandonFarm Press Editorial Staff
What do a raccoon and a possum have to do with a 7-cent increase in the wholesale price of gasoline on the West Coast?
As perhaps the most egregious example thus far of just how skittery these markets are, on the night of March 5, at two different locations in the Los Angeles area, within an hour of each other, two hapless animals set off this chain of events:
The possum, which got fried in the process, caused a power interruption at a California Edison electrical substation.
The raccoon, which also got cooked, interrupted power at an L.A. Water and Power substation.
Those events disrupted operations for about two hours at an Exxon Mobil refinery and about 10 seconds (yep, thats right: 10 seconds) at a Shell Oil Co. refinery.
Next morning, news of the brief refinery disruptions pushed wholesale gasoline prices up 7 cents a gallon.
Talk about chaos theory at work!
However bad we in the Mid-South have had it with a 40-cent rise in gasoline prices over the past few weeks, Californians have really felt the pain, with prices well over $3 per gallon (San Francisco had the nations highest price at more than $3.70). Analysts are predicting that $3-and-up will be commonplace around the country as the summer driving season sets in.
This at a time when crude oil prices have been falling and OPEC ministers have been wringing their hands over declines in their zillion-dollar revenues.
The problem, were told once again, lies with refineries. Theres not enough capacity to meet constantly-growing demand, even when everythings running at better than 95 percent. When there are shutdowns as there have been recently due to switching over to summer-grade fuels, equipment maintenance, and fires and other accidents supplies get tight and prices go up.
Heaven help us all if a major disaster, such as a hurricane or a terrorist act, gets tossed into the equation.
There are, industry sources tell us, about 150 refineries in 33 states, the majority located in coastal areas. While capacity has been expanded at many existing sites, no new ground-up refinery has been built in the U.S. since 1976.
Oil companies have closed nearly 25 refineries since 1995, representing almost 1 million barrels per day. This, critics say, has enabled them to keep a tighter rein on supply ... and price.
April 3, 2007
more dire huricane predictions
Quick news.... Colorado State University, home of William Gray, a widely watched hurricane forecaster, has increased their hurricane prediction for the Atlantic Basin to 17 named storms. Their earlier forecast called for 14 named storms. They anticipate 9 hurricanes with five reaching Category 3 or above. They suggest there is a 74% chance a hurricane will make landfall. The century average is closer to 50%.
The Supreme Court does the environment a solid
The ruling yesterday by the Supreme Court went largely unnoticed in the press, but made a huge impact here at Deep Green Crystals. I have commented many times that government tends to hamper long-term investments rather than encourage them. Especially in the area of environment. Policies that change with the political winds are not good for anybody other than the politicians. The whole reason there are federal agencies is to implement policies over the long term and smooth out political randomness. The politicians have been playing fast and loose with the facts/science of global warming for some time. It came as quite a surprise to this observer then to see the current supreme court clear up some of the confusion by making it crystal clear that the EPA can regulate carbon dioxide and other greenhouse gases. Seems like the swing vote is now Kennedy on the evironment.
thanks AGE for summary
The Supreme Courts decision...Yesterday, the U.S. Supreme Court ruled 5 to 4 that carbon dioxide and other greenhouse gases are pollutants under the Clean Air Act. The Court went on to say the EPA does possess the authority to regulate those emissions. The courts ruling continued saying the EPAs laundry list of reasons for declining to regulate the emissions was simply insufficient. According to the ruling the EPA should justify its inaction on global warming. This was the courts first case on climate change. Seemingly the decision would support the eleven states that are trying to gain EPA approval to limit tailpipe emissions. Theoretically, this could lead to more fuel-efficient vehicles. Further, the decision allows greenhouse gas emissions to be capped under federal law. The EPA wasnt directed to regulate emissions, but if they decide to, they could limit emissions of all major emitters. This would include coal-fired power plants. In the long-term, this could lead to even more power sector consumption of natural gas and encourage the development of nuclear power.
Stevens, joined by Justices Anthony Kennedy, David Souter, Ruth Bader Ginsburg and Stephen Breyer, said that by providing nothing more than a "laundry list of reasons not to regulate," the Environmental Protection Agency had defied the Clean Air Act's "clear statutory command."
If the decision prompted widespread claims of victory, it left behind a prominent loser: Chief Justice John Roberts Jr., who argued vigorously in a dissenting opinion that the court never should have reached the merits of the case or addressed the question of the agency's legal obligations.
His dissent, which Justices Antonin Scalia, Clarence Thomas and Samuel Alito Jr. also signed, focused solely on the issue of legal standing to sue: whether the broad coalition of states, cities and environmental groups that brought the lawsuit against the environmental agency four years ago should have been accepted as plaintiffs in the first place.
March 28, 2007
Matt Simmons address International Petroleum Week
"Every petroleum scientist that has relentlessly worked on the
resource/reserve issue pegs peak oil occurring sometime in the next one to ten years." IP week talk.pdf (application/pdf Object)
Peak oil doesn't mean we are running out of oil, it just means that oil production is in decline. We won't run out of oil for quite a long time, but production will plateau or decline while demand continues to rise. Energy reality 101 is that demand can be a high as anyone wants to forecast, but energy use can only be as high as energy supply. IAEA and the USDOE both project roughly a 40-45% growth in oil demand over the next 23 years (with natural gas growing at 67%). The only real quesion is, will production be able to grow the same amount? If production lags growth even by 1%, volatility and price goes through the roof.
March 27, 2007
Come to my house April 26th
I will be hosting a reception for all Northwest Energy Angel members and presenting companies.
The best early stage energy companies in the northwest will be there along with a very good group of local investors.
Join us for the next NW Energy Angels Meeting - April 26th 3:00 - 6:00 p.m.
(guest are welcome to arrive at 2:30)
Location: Residence of Martin Tobias
Address: 417 West Propect Street Seattle, WA 98119 (Queen Anne area)
March 21, 2007
One forecaster sees busy hurricane season
After a lack-luster 06, one hurricane prognostication group forecasts a busy summer. I wouldn't want to be on the Gulf coast. This cannot be good for oil futures.
Forecasters see above average hurricane activity. London-based forecasters at Tropical Storm Risk are predicting the Atlantic Ocean hurricane activity this year may be as much as 75% above the historical average as warm water provides fuel for storms. The forecasters estimated 17 tropical storms will form, with nine reaching hurricane force and four of those becoming major hurricanes with winds topping 111 mph. According to the forecast, as many as five storms, including two hurricanes, may make landfall in the U.S. Tropical Storm Risk, which accurately forecast the 2003 to 2005 seasons, predicted 16 storms for the 2006 season, including eight hurricanes and four major hurricanes. Other forecasters, including Colorado State University researchers also expected 2006 to be more active than it was. The team will release its 2007 forecast in April.
Iraqi insurgents use children laced car bombs and crude chemical weapons
This news from AGE was particularlly chilling today. Two Iraqi insurgents passed through a military checkpoint because they had two children in their car. Soon after, they detonated the car with the children INSIDE. And they are starting to blow up tankers of Clorine to try to create clorine gas (a chemical weapon). While crude, the move shows their desire for such weapons and willingness to use them. This is absolutely repulsive to me. in a day when the major news reports were only talking about the "growing scandal" over firing of US Attorneys, this chilling and important news was left untouched by major media. I was surprised O'Reilly didn't mention it on Fox. I have not heard a plan from the Democrats or anyone critical of our current efforts in Iraq about how you win against such a ruthless enemy. All I have heard is "give up". How can you say "give up" and deny the region will turn into a terrorist university stronghold out of which many more 911's will come? When people are willing to calmly drive children to their death's through a military checkpoint, how far else would they go?
OPEC and Middle East news...In Baghdad, two insurgents passed through a military checkpoint in their car. U.S. forces let their car pass after seeing two children in the backseat. At a Pentagon news briefing, Maj. Gen. Barbaro said, Children...lower suspicion. Agence France-Presse quoting a U.S. military official said the two men in the car then parked it across from a school, ran away from the vehicle, leaving the children behind, and detonated the car. The two children and three other civilians died. Seven were wounded. Despite the chilling tale, the story suggests the security crackdown is to some degree working. The insurgents are being forced to become more creative in their tactics. Nevertheless, the story suggests they are insistent on continuing to wage assaults.
Meanwhile, Britains top general in Iraq said the US-Iraq offensive has put the insurgents on the defensive in Anbar. This has been one of the most violent regions around Baghdad. We note there are reports of a surge in violence in neighboring Diyala, suggesting the insurgents have simply moved camp.
Last weekend insurgents detonated three vehicle-borne IEDs in Anbar, west of Baghdad. The U.S. has blamed al Qaeda for the explosions that included chlorine blasts. For the insurgents, making chlorine bombs is not rocket science. Basically, they are using trucks loaded with chlorine tanks and detonating them. The use of chlorine bombs in Iraq is not new. Earlier this year there was a spate of similar attacks. Though the current bombs have proved generally ineffective (because the insurgents havent conquered the problem of disbursing the gas in concentrations high enough to cause mass casualties) they are useful. The crude chemical weapons incite fear in the Iraqis while offering the insurgents valuable experience with such devices. Likely, as the insurgents improve their technical capabilities and subsequently the lethality of them, they will begin to use them outside Iraq.
Reuters reports this morning that Alireza Jafarzadeh, an Iranian exile who accurately gave details about Irans nuclear program in 2002, claimed Iran Revolutionary Guards have been operating Iraqi Shiite militia training camps. He named names and provided details of the training activities, suggesting the Iranian government endorses and has full knowledge of the camps.
March 19, 2007
Riding to rid the environment of carcinogens
I like to ride bikes of all types. With motors and without. This summer I need a goal to keep me on track riding, so I have signed up for the Lance Armstrong Live Strong ride in Portland Oregon.
Two ways you can get involved:
1. Join my team here: 2007 LIVESTRONG Challenge - Portland - Seattle Biodiesel Team
2. Support my ride by making a donation to me here:
Pemex reserves drop, major fields in steep decline
US oil produciton peaked in the 1970s. Mexico's peaked in 2004. It peaked later because they started investing later, but the drop will be swift. Less than 10 years of petroleum left. Wow, that was fast. See report below: Green Car Congress: Pemex Oil and Gas Reserves Drop by Half Since 2002; Total Oil Production Down 2.3% in 2006
Pemex oil production peaked in 2004, and its largest field, Cantarell, is in accelerating decline. (Earlier post.)
March 16, 2007
China Agri-Industrials, the ADM of China raises $410M in oversubcribed offering
Wow, 100X oversubscribed institutional book and 607X oversubscribed retail book. All I can say is wow.
China Agri-Industries prices IPO at the top - General News - FinanceAsia.com - The network for financial decision makers
My latest investment
I have been spending quite a bit of time in Westport, WA on a little piece of wooded property I bought recently to develop a surf camp on. One of the issues I have is how to heat the place and what to do with all the trees I am going to have to cut down (as few as possible though) to build a surf shack and a road. An obvious idea was to cut the wood into firewood and use a wood stove. But traditional home wood stoves are VERY dirty, ineffecient and only provide direct heat. I started wondering if there is a better way. And there is!
Greenwood Technologies is here in Seattle and has invented a Hydronic Wood Furnace that is ultra efficient and very low in emissions. The company came through the NorthWest Energy Angel network I started to help fund early stage energy companies in the northwest. The product is something I would buy, solves a need, and the company happened to be raising money. The company is just ramping sales and building a distribution network. My order is already in for one in the fall when my house is done. If you have an off-the-grid or remote cabin where you have alot of wood and need a clean heating alternative, check out Greenwood.
Global warming cutting crop yields
ouch. I was just reading the CSFB climate change report yesterday which is where I first read about the relationahip between warmer weather and reduced crop yields. Then this study comes out today. This will be an interesting area of study. Crops help global warming in some measure by eating carbon and if they are oilseed or corn, they may even be grown to off-set petroleum use. The relationship between more crops for fuel and less fuel use may be in interesting one to explore as well.
The study is the first to estimate how much global food production has already been affected by climate change. Christopher Field and David Lobell compared yield figures from the Food and Agriculture Organization with average temperatures and precipitation in the major growing regions.
They found that, on average, global yields for several of the crops responded negatively to warmer temperatures, with yields dropping by about 3-5% for every 1� F increase. Average global temperatures increased by about 0.7� F during the study period, with even larger changes in several regions.
March 5, 2007
Massive data dump on CBOT/Winnepeg and Oil futures
My summary: Correction in the veg oil markets as speculative buying by funds gets washed out due to technical as well as fundamental factors. Crop yields are at all time highs and biodiesel capacity is not coming on line as quickly as the speculative premiums have implied. Basically I got it right. In crude, more rough waters ahead.
Chicago Board of Trade soybean futures Monday ended at their lowest levels in more than a month under pressure from weakness in outside markets and continued long speculative liquidation, analysts and traders said. But prices closed well off session lows amid an apparent exhaustion of the long liquidation and a bounce in the neighboring CBOT corn market, they noted. May soybeans closed down 3 cents at $7.50 1/2 per bushel, and November soybeans ended down 3 1/2 cents at $7.87 3/4. It was the lowest close for both contracts since Feb. 1. May soymeal finished down $0.40 at $220.50 per short ton, the contract's lowest close since Feb. 8. May soyoil closed 10 points lower at 29.98 cents per pound, the contract's lowest close since Jan. 31. Spillover pressure from outside markets and the neighboring CBOT corn market weighed on soybean futures for most of the day session, traders said. Corn futures rebounded higher in late trading, however, and helped soybeans trim losses, they said. Long speculative liquidation that began last week also continued to be a negative factor for soybeans, analysts added. Funds were active sellers again, dumping an estimated 5,000 contracts. Looking ahead, it appears as thought the long liquidation may be coming to an end, said Don Roose, president of U.S. Commodities. The market responded "fairly decently" to bearish news of a good harvesting weekend in South America and to the declines in outside markets, he said. "I think it's the tail end of the long liquidation," Roose said. "We had a lot of liquidation in the market. It seems like we've reached kind of equilibrium." Soy yields in Brazil's No. 2 soy producing state, Parana, surprised agronomists this weekend with many farms averaging between 54 and 70 60-kilogram bags per hectare, compared to just 40 bags per hectare in 2005-06, according to consulting firm Agroconsult. Of the 19 farms Dow Jones Newswires visited throughout west and north Parana between Friday and Sunday, 11 properties had yields of 54 bags or more, with six of those properties having fields yielding well more than 60 bags per hectare. In northern Brazil, where harvest conditions are being closely watched, Mato Grosso had a few light showers over the weekend. Otherwise, dry and hot weather prevailed with high temperatures in the mid-90s Fahrenheit, the DTN Meteorlogix weather firm reported. "This region has generally dry and warm weather this week, which is favorable for harvest," Meteorlogix said. Asian soybean rust will likely reduce yields in Brazil's No. 4 soy producing state in 2006-07, although strong yields from early cycle soy might compensate for the productivity losses going forward, Agroconsult agronomists said. In the U.S., the cold winter of 2006-07 appears to have set back the spread of Asian soybean rust as frost killed susceptible plant hosts in most of the Southeast. In other news, weekly U.S. soybean export inspections came in below analysts' estimates and inspections from a week earlier. The news was bearish for the market, an analyst said. The U.S. Department of Agriculture reported 24.829 million bushels were inspected for export for the week ended March 1, while analysts had predicted inspections of 33 million to 38 million. The previous week, 34.199 million bushels were inspected, the USDA said. For the current market year to date, 766.955 million bushels have been inspected for export, compared to 620.398 million at this time last year. "We're running into competition with South America now," Roose said, referring to soybean export business. There was some support for prices from position squaring, a CBOT floor trader said. In pit trades, USA Trading bought 1,500 May, and Term Commodities bought 600 May. On the sell side, Man Financial sold 1,000 Nov, while ADM sold 1,000 Nov and 500 May. ABN Amro spread 800 Nov/May, and Tenco spread 600 March/May. Term Commodities spread 500 Nov/May. SOY PRODUCTS CBOT soy product futures finished in negative territory on borrowed weakness, analysts said. Losses in soybeans weighed on soymeal and weakness in crude oil futures pressured soyoil, they said. "I think all the markets were down with crude earlier," Roose said. Funds sold an estimated 1,000 soymeal and 1,000 soyoil. In soymeal pit trades, JP Morgan bought 600 May and sold 400 May. Fimat sold 600 May. Shatkin Arbor spread 400 May/December soymeal. In soyoil trades, Prudential bought 900 May, and Citigroup bought 400 May. RJ O'Brien sold 500 May, and Rand Financial sold 400 May.
Winnipeg Commodity Exchange--Grain and oilseed futures at the Winnipeg Commodity Exchange finished Monday's session lower, with the exception being western barley. Canola values led the downward price slide with some of the declines fueled by the sell-off seen in CBOT soybean values as well as bearish chart signals, market watchers said. Weakness in the Canadian dollar helped to temper some of the downward price action. Canola finished lower with speculative-based chart selling accounting for a good portion of the downward price action seen in the commodity, traders said. The losses in canola were helped along by the sell-off seen in CBOT soybeans and soyoil. The downward price movement in canola was offset by steady domestic crusher demand and by scale down commercial buying, much of which was believed to be the pricing of old export business, brokers said. Slow farmer sales of canola to the country elevator system also offered some minor support. There were an estimated 7,981 canola contracts traded during Monday's session, up from 4,656 during the previous session. Of the contracts traded, 1,760 were spread related. Western barley values were mostly higher. Early losses in CBOT corn futures had sparked some light selling interest in barley, but when corn values began to recover to higher ground near the close, the losses in barley were also erased, brokers said. Activity was a light two sided commercial affair. An estimated 474 barley contracts changed hands during the session. On Friday, 51 contracts were traded. Feed wheat futures were steady to slightly lower in quiet trade. Early weakness in CBOT grain markets encouraged some of the initial selling interest with the absence of fresh demand also seen as an undermining price influence, traders said. Slow farmer movement in Western Canada was seen as an underpinning price influence. There were 25 feed wheat contract traded Monday. On Friday, 233 feed wheat contracts changed hands.
Oil--Crude oil futures fell to a nearly two-week closing low Monday on concerns global growth could slow, and as gasoline prices had their first sizable slip in weeks. Strength in gasoline prices had helped oil prices finish slightly higher last week, despite a big slide in global equities, which was led by China. With gasoline slipping 2.9%, the crude market focused on global stock market jitters and the effect they could have on crude demand. Analysts attributed the fall in gasoline to traders locking in gains after a big run up in prices in recent weeks. The front-month April light, sweet crude contract on the New York Mercantile Exchange ended down $1.56, or 2.5%, at $60.08 a barrel, after falling as low as $59.55, the lowest price for a front-month contract since Feb. 21. Brent crude on the ICE futures exchange fell $1.57 to $60.51 a barrel. Final settlement prices weren't yet available. "The equities are a concern in that if the trend continues, it could be the precursor to a slow down in the global economy," said Andy Lebow, senior vice president of energy at brokerage Man Financial in New York. Lebow said prices opened lower "in sympathy with equities" and were kept down by weakness in gasoline. Crude prices opened more than $1 a barrel lower in Nymex floor trading after slides in Asian share indices that began last week continued. China, the world's fastest-growing major economy, is estimated to have accounted for 40% of increased crude demand in 2006 and any signs of slowing economic growth there is seen as bad for crude oil demand. "Stocks seemed to be the initial factor in pushing prices down, but crude had a strong week last week and we were a bit overbought," which added to losses later in the session, said Tom Bentz, an analyst and broker BNP Paribas in New York. Crude prices Friday fell for the first time in eight sessions, though they were hard-fought gains, with prices ended up gaining only 30 cents for the week. U.S. shares are coming off their worst week in four years, triggered by a 9% daily fall in the Shanghai Composite Exchange last Tuesday. Statements from OPEC-member ministers that further cuts to oil production at the group's March 15 meeting in Vienna are unlikely also failed to help crude prices. Qatari Oil Minister Abdullah bin Hamad al-Attiyah said that if oil prices stay steady, there won't be any cuts in production at the coming Organization of Petroleum Exporting Countries meeting. Nigeria's oil minister Edmund Daukoru said Sunday that OPEC countries had achieved more than 75% compliance with previous cuts of 1.7 million barrels a day and that he doesn't "see the elements for another cut." Front-month April heating oil fell 4.37 cents, or 2.5%, to $1.7245 a gallon. April reformulated gasoline blendstock for oxygenate blending, or RBOB, fell 5.53 cents, or 2.7%, to $1.8465 a gallon. It was gasoline's second fall since Feb. 15. Gasoline futures outpaced gains in other oil products in February because of refinery glitches and forecasts for strong seasonal demand. The boost has led U.S. retail gasoline prices nationwide to average $2.481 a gallon Monday, above the Energy Information Administration's average projection of $2.415 a gallon for the peak demand second and third quarters. "This has naturally raised concerns that high prices at the pump could dampen demand for gasoline," Addison Armstrong, an analyst at TFS Energy in Stamford, Conn., said in a note to clients. "At the very least, a period of consolidation is now likely for gasoline futures."
February 23, 2007
Oil running on Iran fears
Oil near high for year on Iran worriesOil rose to the highest price this year earlier today in New York on concerns supplies may be disrupted if Iran is sanctioned again for its nuclear program. U.S. Secretary of State Condoleezza Rice warned Iran it faces punishment and isolation if it continues to enrich uranium, according to a report in the Washington Post. Rice's remarks came after a meeting yesterday in Berlin with counterparts from Russia, Germany and the European Union after the International Atomic Energy Agency said Iran continues to develop nuclear material and know-how that could lead to weapons production. Crude oil for April delivery rose 42 cents to $61.37 a barrel at 9:25 AM Eastern on the New York Mercantile Exchange. Futures touched $61.70, the highest since Dec. 26.
and the summer driving season hasn't even started yet.
February 18, 2007
$5/gallon coming to Denver
Look out denver:
The McKee oil refinery in Sunray, Texas suffered a fire Friday night that might spark higher prices in a broader geography for gasoline and diesel.
The McKee oil refinery is part of Valero Energy Corp.
Seasonal maintenance already has about 15% of capacity off-line, so if the refinery is down for longer than a week it could cause higher prices in more areas.
The fire began in the propane deasphalting unit of the 158,000 barrel per day refinery in the Texas panhandle.
Since the refinery is strategically located and thus supplies not only the local area but also delivers product to Denver, Phoenix, and Tucson (utilizing Kinder Morgan's pipeline from El Paso), there could be broader market impact. Because the other two refineries that serve the same markets have planned shutdowns coming, supply could really suffer.
Denver might take it on the chin, as the Suncor refinery there is scheduled to shut for a turnaround, and Frontier Oil Corp's Cheyenne, Wyoming refinery is planning to take its coker off-line in March. These two plants in combination with Valero's represent 60% to 70% of Denver's supply.
February 16, 2007
Speak of the devil
I just posted about how tight oil supplies are from reports a couple days ago. then today oil runs because the US consolate in Nigeria says attacks will go up... I don't like being right about this kind of thing...
Oil rises above $59 after Nigeria warningrude oil rose above $59 a barrel in New York after the U.S. consulate warned that militant attacks in Nigeria, Africas top oil producer, may expand to new areas and become more violent. A Nigerian militant group is planning to broaden strikes beyond the Niger delta region, according to a statement from the U.S. consulate in Lagos. Attacks in the Niger Delta, Nigerias major oil-producing region, have intensified in the past year with more than 200 people being kidnapped, about half of them expatriates. Crude oil for March delivery was up $1.32 at 59.34 per barrel in New York at 2:18 p.m. ET.
Saudi Al Qaeda calling for more attacks on US oil sources
DUBAI (Reuters) -- A Saudi wing of al Qaeda called for attacks on U.S. oil sources across the world, saying targets should not be limited to the Middle East and listing Canada, Venezuela and Mexico as U.S. oil suppliers.
The threat appeared in the al Qaeda Organization in the Arabian Peninsula's e-magazine, Sawt al-Jihad (Voice of Holy War), which was posted on a Web site used by Islamist militants.
"It is necessary to hit oil interests in all regions which serve the United States not just in the Middle East. The goal is to cut its supplies or reduce them through any means," it said.
The group was behind the February 2006 failed suicide attack on the world's largest oil processing plant in Saudi Arabia.
In 2003, al Qaeda militants launched a violent campaign to topple the U.S.-allied Saudi royal family with suicide attacks on compounds housing Westerners and on government buildings..
Humm, those Saudi targets are pretty hardened, I wonder what the security against car bombs in Huston is? Or Iran? Or Nigeria? Or Russia? I hope these guys haven't read Robert Baer's book, Sleeping with the Devil, because the first chapter is basically a "how to" guide for anyone who wants to take Saudi oil production off-line. Here is a big clue: you don't need to make a frontal attack. You can hit much softer targets that spew acid rain that will begin to corrrode all the steel in the country and make the entire infrastructure fall apart in less than a year.
February 13, 2007
WR Hambrecht has a sell on PEIX
The squeeze is on with the Ethanol players
Pacific Ethanol, Inc. (PEIX - SELL): WEAK COMMODITY PRICES LIKELY TO
OVERWHELM IMPROVING CONSTRUCTION OUTLOOK; REITERATE SELL AND $11 PRICE
Pacific Ethanol, Inc., PEIX, SELL, Target: $11.00
Closing Price: $16.47
Mkt Cap (MM): $612.684
* Investment Conclusion: Pacific Ethanol's stock has moved up 10% since
our initiation in early January, while VeraSun (VSE: Hold) has fallen
11%. We believe investors have been looking past 2007 and 2008 and into
2009+ when buying Pacific Ethanol, and we see this changing when the
company reports Q4:06 numbers (its first production quarter). We expect
the report to show reasonable volumes (24 million gallons sold out of
the marketing division and 7 million out of production), but believe
that the outlook for profit from the production will be weak. We
estimate that production gross margins will drop from 19% in Q4:06 to 6%
in Q4:07. We are reducing our 2007 and 2008 EPS numbers, even while our
volume estimates are rising. We reiterate our Sell Rating and $11 target
price based on 13x our new 2008 EPS estimate of $0.88.
* We are updating our industry commodity pricing (worse) and Pacific
Ethanol marketing sales estimates (better). We are raising our corn
price expectations for 2007 from $3.21 per bushel to $3.50 per bushel,
and we are reducing our ethanol price estimate for 2007 from $2.03 per
gallon to $1.91 per gallon. On the plus side we are raising our 2007
marketing volume estimate from 100,000 gallons to 116,000 gallons. The
net impact is we are dropping our 2007 EPS estimate from $0.45 to $0.34,
while our revenue estimate increases from $353 million to $385 million.
* Pacific Ethanol has made progress on its construction plans as
expected. With a new $325 million of secured credit and a
groundbreaking at its Idaho location, Pacific is executing on its plans;
however, in our model we had already assumed Pacific would be able to
make its construction plans. What were not in our model were higher corn
prices and lower ethanol prices. Our 2008 revenue estimate rises from
$531 million to $708 million, but our 2008 EPS estimate drops from $0.94
* We are concerned that the pricing environment could remain difficult
for some time for Pacific. We believe the first solid evidence of this
will be on its Q4:06 earnings call (likely not until mid-March) when
management should be discussing the production levels of its first plant
(Madera, California). PEIX is trading at 49x our 2007 EPS estimate and
19x our 2008 estimate. We believe using 2008 numbers takes into account
the growth potential of Pacific Ethanol; however, 19x is a 47% premium
to its peer group on 2008 numbers, which looks overvalued, in our view.
The long-term story for Pacific Ethanol is to move past corn ethanol
into cellulosic, but we believe that could take a number of years before
it is commercially ready.
For important disclosures, click here:
February 2, 2007
Back to the races with crude
From AGE today:
Crude rises to four-week highCrude oil rose on speculation that inventories will drop because of strengthening fuel demand in the U.S. and OPEC's production cuts. Weather Derivatives forecasts heating consumption in the Northeast will be 36% above normal in the next week. Government reports this week showed that the U.S. is growing at a moderate rate, which may boost fuel use. OPEC agreed to trim output by 500,000 barrels a day starting yesterday. AGE energy analyst Eric Wittenauer told Bloomberg News that we've had a good run this week and I think the market is heading for a $58-to-$62 range. The National Weather Service predicted that below-normal temperatures will persist in the Northeast through Feb. 15. The region is responsible for 80% of U.S. home heating oil consumption. Crude oil for March delivery rose $1.66 to $58.98 a barrel at 2:28 p.m. on the New York Mercantile Exchange. Its the highest intraday price since Jan. 3. Prices are up 4.1% this week and are 11% lower than a year ago.
Bush admits climate change due to humans
Bush administration says human impact on climate change now clearThe Bush administration said the human role in climate change is no longer debatable, responding to a United Nations report that concludes world temperatures and sea-levels are very likely increasing. Energy Secretary Samuel Bodman said the Bush administration still opposes mandatory carbon caps such as those proposed by Democrats in Congress. Bodman declined to say whether the president would veto any carbon cap approved by Congress. The UN said in its most comprehensive report yet on climate change that global warming is very likely caused by humans. The report said temperatures are likely to rise by 1.1 to 6.4 degrees Celsius by the end of this century relative to the last, with a probable 2 to 4.5 degree range if carbon dioxide doubles from pre-industrial levels. The report said sea-level gain over the same period may range from 18 to 59 centimeters (7 to 23 inches). A key change in the report's language compared with the panel's 2001 document showed there is more certainty that human activity is causing the warming. The report puts the probability of the link at more than 90%.
February 1, 2007
Rid'n the Harley on the cover of CEO magazine
Let the good times roll...CEO Magazine Jan-Feb
some quick energy news and comment...
- According to an EU energy official, the EUs target to buy 20% of all energy from renewable sources by 2020 has the potential of reducing the areas fossil-fuel costs by $96 B per year.
Hummm, President Bush suggested 35B gallons of renewables in his state of the union. That would be roughly 10% by the date he set. Come on America, step up to the plate!
- Last year Mexico had its lowest rate of oil output since 2000. The primary culprit for the decline was the loss of production at the Cantarell field. The mature field is declining in production even faster than the most pessimistic estimates suggested. This is significant as the field began last year as the worlds second largest. On the decline, the Mexico City newspaper, La Jornadad, reports that there are efforts in the Mexican congress to privatize Pemex, the state oil company. Privatization could help declining output rates, but such a scenario is unlikely. The nations oil expropriation in 1938 is very much still a part of Mexicos self-image.
Hummm, Mexican oil in decline and peasants rioting in the streets due to high corn tortilla prices blamed on US Ethanol. A recipie for disaster...
January 29, 2007
Saudi bank wants to keep $50/$55 oil
This from AGE today:
Samba Financial Group, a bank in Saudi Arabia, believes the oil price the kingdom is using to build its budget is $42/barrel. (We assume this is the OPEC basket price.) The Sunday edition of the NYT included an article that suggested the Saudis were attempting to moderate the price of oil, potentially to restrain Iranian aspirations in the region. Other intelligence reports have suggested Iran and Saudi Arabia may include barrel price objectives in negotiations on Iraq and the broader region. Adding credence to the thought that Saudi Arabia is more comfortable with prices where they are is that in the past two weeks we note Saudi Oil Minister al-Naimi stopped calls to have another emergency meeting. Additionally, he said the kingdoms policy was to maintain moderate prices.Though we cant be certain what the Saudis view as a price floor for a trading range, we feel they are not fans of $70 oil. High prices bolster their foes within OPEC (e.g. Venezuela and Iran). They also create economies in producing alternative fuels. The NYT says that Saudi energy officials think $50 to $55 oil is just right. That said, it is interesting to note that basket prices seemingly stabilized more in the $55 to $60 range prior to the New Year price slide.On a related note, al-Naimi said Riyadh plans to spend $80 b to expand Saudi crude oil production capacity by nearly 40% between 2009 and 2012. They plan to expand production capacity from 9.0 mbpd to 12.5 mbpd. He suggested that the recent bull run in crude has served as a wake up call for the industry and for producers and consumers alike.
Interesting to hear how the world powers budget our money eh? Saudi's are fighting a many front battle. And their reserves are dwindling. I predict they have 5 years left in the power position, then it is a free for all.
January 25, 2007
CS monitor notes unique alliance for eco-friendly economy
Unions see greenbacks in 'green' future | csmonitor.com. including Imperium Renewables as the "Biodiesel Behemoth” .
January 23, 2007
Imperium Renewables is largest venture financing in Northwest
according to John Cook's blog: Venture investments rise. And we haven't even officially announced it. I can say for certain that the number is not the complete picture.
January 19, 2007
A bad day for green utilities
Just over the wire: The Seattle Times: Local News: City Light ratepayers can't be billed for city's emissions reduction efforts. This is bad news for utilities that actually want to reduce their carbon emissions. The ability to pay others to reduce their polution is a key tool in getting it done. It will also affect our business in biodiesel as the payments for carbon have been helping offset the cost of biodiesel therefore driving more demand. We are just going to have to accellerate our ability to monitize the carbon directly rather than indirectly.
back to the drawing board.
January 18, 2007
NW Energy Angel meeting rescheduled to Feb. 1
Due to a snow delay caused by global warming rewiring the air flows....
The NW Energy AngelsTM meeting has been re-scheduled! Join us and listen to exciting new companies, network, and learn more about investing in the energy sector. PleaseRSVP (indicate Bellevue or Portland) by Monday Jan 29 by emailing firstname.lastname@example.org.
11:00 a.m. to 1:30 p.m. (lunch provided)
Location is in the PSE Building, Bellevue, WA
with live simulcast at Stoel Rives, Portland, OR
The meeting will feature presentations from the following companies:
Eeco Systems energy efficiency and energy conservation software (OR)
Greenwood Technologies, LLC wood-fired central heating technology (WA)
Infinia solar energy product (WA)
WRSI LLC waste management technology (WA)
Accredited investors may attend one meeting as our guest at no charge. Future meetings will be open to members of the NW Energy Angel Group.
BELLEVUE:Puget Sound Energy (East Building - Auditorium (lobby level))355 110th Ave NE, Bellevue, WA98004Map & Directions attached
Parking is directly underneath the building.Please park in PSE sections on levels P5-P7. When leaving the garage, follow the signage to reach the CASHIER at the 110th AVE NE exit. You will not be able to exit onto 108th AVE NE without a security card.
PORTLAND (via live simulcast):Stoel Rives LLP900 SW Fifth Avenue, Suite 2600, Portland, Oregon 97204Directionshttp://www.stoel.com/showlocation.aspx?Show=969)
See you there!
If you have any questions, please reply to this email or contact:
Manager, NW Energy AngelsTM
Northwest Energy Technology Collaborative
January 4, 2007
The Fool take on Earth Biofuels
There are many OTCBB and small cap stocks promoting themselves as the flavor of the day "biofuel" company. One such company, Earth Biofuels has actually achieved quite a market cap with their Hollywood theatrics. They announced the acquisition of a site in Washington State yesterday that my company looked at and declined a number of times. There have already been two companies go bankrupt there for good reasons. Now the good people at the Motley Fool make further comment on the company and it's CEO. Earth Biofuels' Kiss of Death [Fool.com] January 03, 2007. Cautionary words to pay attention to.
Democrats propose to take from oil and give to green
While not thrilled about the Democratic take-over of Washington, this is a very good idea. Free oil leases? Hey, give us green's some free stuff! Put public policy in line with public health, safety, jobs and national security.
Democrats Hope to Take From Oil, Give To Green Energy
By Steven MufsonWashington Post Staff WriterThursday, January 4, 2007; A01
House Democrats are crafting an energy package that would roll back billions of dollars worth of oil drilling incentives, raise billions more by boosting federal royalties paid by oil and gas companies for offshore production, and plow the money into new tax breaks for renewable energy sources, congressional sources said yesterday.
Eager to paint themselves as different from the Bush administration and the past Republican majority, Democratic leaders are targeting a manufacturing tax cut in 2004 that they say gave unneeded incentives to the oil industry, Majority Leader Steny H. Hoyer of Maryland said in a briefing yesterday. Hoyer said Democrats are also planning to force oil companies to pay royalties on deepwater Gulf of Mexico tracts leased in 1998 and 1999; the Interior Department has said that the leases inadvertently failed to include provisions for royalty payments once oil prices rose above certain thresholds.
The repeal of the 2004 tax cuts for the oil and gas industry would generate nearly $5 billion, Democratic lawmakers said, quoting estimates by the Joint Committee on Taxation. The royalty payments would yield between $9 billion and $11 billion, Hoyer said.
But energy industry and congressional sources said that the details of the package remain in flux, in part because of disagreements among Democrats over how the revenue would be used and whether to also roll back oil and gas industry incentives in the Energy Policy Act of 2005, which was supported by many Democrats.
Democratic leaders said House Speaker Nancy Pelosi would introduce the energy package on Jan. 18, toward the end of the "100 hours" of legislative initiatives.
House Ways and Means Committee Chairman Charles B. Rangel and House Energy and Commerce Committee Chairman John D. Dingell want to be able to hold hearings before some of the key details of such a package are set. As a result, Pelosi will probably introduce the revenue-raising components first and set aside the money in a "fund" to be divvied up later.
Renewable energy lobbyists said that would set off a feeding frenzy among boosters of hydropower, nuclear, biofuel, geothermal and solar energy. Solar producers, for example, have a proposal to expand and extend tax credits for residential solar installations for eight years, which would cost $400 million.
"The Democrats are appropriately shifting money from the 20th-century technologies to the 21st-century industries," said Rhone Resch, president of the Solar Energy Industries Association. "If we want to see solar, wind and biofuels, we have to make that investment today."
Figuring out how to distribute incentives for renewable energy could be controversial. Some Democratic House members want to exclude nuclear power. Some renewable-energy advocates fear that Congress will scramble to provide too many incentives for corn-based ethanol production.
Pelosi's staff has asked the Congressional Budget Office to estimate revenue from several proposals, most based on ones introduced last year by Democratic lawmakers, including Reps. Maurice D. Hinchey (N.Y.), Edward J. Markey (Mass.), Jim McDermott (Wash.) and Brian Higgins (N.Y.).
McDermott's would alter the 2004 tax cut, which was adopted as a way to stimulate job growth by effectively trimming tax rates for a broad range of U.S. manufacturers, agriculture and extractive industries. Mark Kibbe, senior tax analyst for the American Petroleum Institute, said that when fully phased in by 2009 the provision would trim the corporate tax rate from 35 percent to 32 percent. McDermott's bill would eliminate the break for the oil and gas industry.
"From the perspective of our industry, it helped make U.S. oil and gas exploration projects or refining projects more cost-competitive with those abroad," Kibbe said.
The most likely change in the Energy Policy Act of 2005 would be the repeal of a clause that allowed oil companies to deduct geological and geophysical exploration costs instead of treating them as capital expenditures to be amortized over a longer period of time, said congressional aides and environmental lobbyists. This change would generate less than $1 billion in revenue over 10 years, they estimated.
A variety of proposals would target the question of royalties on the 1998 and 1999 Gulf of Mexico leases. (The Justice Department is investigating possible relationships between Interior Department officials and oil companies that received the leases, said two sources briefed on the investigations last month.)
Five companies representing about a quarter of the leases in dispute agreed last month to insert price thresholds for future royalty payments, but another four dozen firms have not agreed to change the terms of those leases.
"There are a lot of issues with that, such as the sanctity of contracts," said API's Kibbe. "The API doesn't think it's a bad idea to renegotiate contracts, as long as both parties think it's a good idea. "
But Democratic and many Republican lawmakers are adamant on the issue. Markey and Hinchey would bar companies that refuse to renegotiate those leases from getting any future leases on federal lands or in federal waters. Pelosi's office has even discussed a proposal made last year by then-GOP congressman Richard W. Pombo, who wanted to impose a $9-a-barrel "conservation fee" on oil produced in federal waters by companies that refused to renegotiate the 1998 and '99 leases.
"It deprives the American people of the production they own," Hinchey said. "If they think it's too expensive, we should leave it there."
Many House Democrats also want to prod oil companies into making back payments on the disputed leases. Those back payments could amount to $900 million to $2 billion, according to the General Accounting Office.
Environmental groups were happy. "The oil and gas bill is a clear departure from the previous Congress's infatuation with oil and gas handouts," said Erich Pica of Friends of the Earth.
Staff writer Jonathan Weisman contributed to this article.
EU proposes limits on greenhouse gas emissions from Aircraft
While this has a long way to go to become law, it is in the right direction. I read somewhere that 40% of greenhouse gases are created from aircraft. Airports are almost as toxic as ports. This is VERY good news for biofuels.
EU Proposes to Cap Greenhouse Gas Emissions from Aircraft
The European Commission proposed in late December to include greenhouse gas emissions from aircraft in its emissions trading scheme. According to the commission, the level of emissions from domestic flights is falling, but those from international air transport are on the rise, undermining the ability of the European Union (EU) to curb its greenhouse gas emissions. EU emissions from international air travel have increased 87 percent since 1990, according to the commission. To solve the problem, the commission proposes to give airlines annual, tradable emissions allowances based on their average level of greenhouse gas emissions from 2004 through 2006. Under the proposal, emissions from flights within the EU will have to meet the emissions cap starting in 2011, and all international flights arriving or departing from an EU airport will have to meet the emissions cap starting in 2012. The European Commission is the governing body for the EU. See the European Commission press release.
While the European Commission proposal focuses on efficiency improvements for the airlines, the ultimate solution may be the use of carbon-neutral biofuels for jet fuels. Although such fuels are not currently available, the Defense Advanced Research Projects Agency (DARPA) has awarded about $5 million to the University of North Dakota's Energy & Environmental Research Center (EERC) for the development of domestic biofuels for military jets. The EERC will focus on making jet fuel from a variety of vegetable oils and other renewable feedstocks, based on an EERC process to produce a biofuel for jets that is usable at extremely cold temperatures. An alternative pathway has been studied at DOE's National Renewable Energy Laboratory (NREL), which has examined ways to derive jet fuel from oil-rich algae. See the EERC press release and the NREL fact sheet (PDF 598 KB). Download Adobe Reader.
The Defense Department is also examining the use of "Fischer-Tropsch" (F-T) fuels for its aircraft. F-T fuels are produced by passing hot carbon-rich gases through a catalyst. The hot gas can be natural gas, gasified coal, or gasified biomass, although coal is currently the fuel of choice. In mid-December, the U.S. Air Force successfully flew a B-52 bomber using F-T fuel from Syntroleum Corporation in all eight engines. See the press releases from the Air Force and Syntroleum.
January 3, 2007
more on food vs fuel
From AG Edwards:
Peter Kendall, president of the National Farmers Union for England and Wales, addressed the Oxford Farming Conference today, pronouncing the era of cheap global food supplies to be coming to a close.
Making the speech in Oxford, Kendall predicted increasingly higher price handles for agricultural commodities and products because of the dual pressures of global population growth and biofuel demand (biofuel demand being driven itself by the dual forces of energy security and concern over climate change).
With "foodstuffs" being used as "feedstocks" for biofuel production at escalating rates, there are now two powerful forces competing for the same commodities. According to Kendall, in the United States "from July 2005 to November 2006 ground was broken on a new ethanol plant every nine days." Those plants will consume about 39 million metric tons of grain (mainly corn currently), and that is in addition to the approximately 41 million tons being used for biofuel creation already.
With both population and biofuels predicted to grow steadily, a difficult dynamic is in the making, particularly for those who are betting that corn should fill our gas tanks.
As with most of the food vs fuel debators they take the "groundbreaking" numbers for granted and assume all that capacity gets built for biofuels. That is a faulty assumption in my mind. There will be lots of failures in financing this build-out and the economics of these facilities (crush spreads) have gone negative. The inverse relationship between biofuel construction and agricultural commodities is not understood nor explained in this debate. This is going to prove most of the naysayers predicting global famine due to biofuels as totally wrong.
January 2, 2007
Wow, cheap electric bike
While in Hawaii before christmas, I bought a Trek beach cruiser for $499. Added a surfboard rack and a couple other things and was up into $600. All powered by my legs. From the AltCar expo, I learned about Currie Tech electic bikes. They OEM one to Mongoose for $399: . Basically it is a cruiser with a motor and a battery pack strapped on, but for less than the cruiser alone! Good for cities with hills (like Seattle). And you even get gears. My beach cruiser in Hawaii is one speed!
December 21, 2006
How much would Gas be if the Iraq war cost were included?
This from AG Edwards today:
"Let’s suppose that every day Americans consume roughly 9.5 mbpd of gasoline. Using a gasoline tax to pay for the $170 b yearly budget would add roughly $1.17 to the pump price. Then, we’d be looking at roughly $4.00 gas right now."
That is only this year $170B. Not the $350B that has already been spent. Now there are democratic and social reasons to be in Iraq that don't have to do with oil, so lets just tax oil with half the costs. Still $3.50/gallon. I am a capitalist. It is appropriate for the government to subsidize things in the national interest. They just need to be discriminating on what is REALLY in the public interest. Is that $1.17/gal for only THIS YEAR's cost more in the public interest than say taking that same money and spending it on a longer term domestic solution (say biodiesel?)
December 20, 2006
opec production cuts chart
Opec wants $60+ oil and has put in place two rounds of production cuts to get it. Here is the chart. There are also reports that OPEC is not meeting their cut targets. Basically the members need the money so less than half the cuts have made it to the market. Look for disciplinary actions soon.
December 19, 2006
China chooses sides in the food/fuel debate
Not surprisingly siding with food. Those peasants get unhappy when hungry. Bejing knows which side of the bread is buttered.
That is why you see all the biodiesel in China focusing on recycled cooking oils. This is going to be interesting.
December 19, 2006
China to limit use of grain for producing biofuels
By ELAINE KURTENBACHAP Business Writer
SHANGHAI, China China will restrict the use of corn and other edible grains for producing biofuel, state media reports said Monday, noting concerns over surging prices despite expectations for yet another bumper harvest.
We have a principle with regard to biofuel: it should neither impact the people's grain consumption, nor should it compete with grain crops for cultivated land, the state-run newspaper People's Daily quoted Yang Jian, director of the development planning department under the Agriculture Ministry, as saying.
It said Yang emphasized that his ministry opposes using edible grains as raw material for biofuel.
He noted the government was, however, encouraging farmers to grow sorghum, cassava and other non-grain crops on marginal land to supply biofuel processors.
Agriculture Ministry officials had no immediate comment on the reports.
Competition between food and fuel processors for grains needed to make biofuels is not limited to China. Worldwide, surging demand for grain crops has been a godsend for many farmers, but is pinching consumers as higher prices hit the industrial food chain, particularly the livestock sector.
China's economic planners have made increasing production of ethanol, a key biofuel, a goal in the country's five-year economic plan, to help curb pollution and reduce reliance on fossil fuels.
But protecting arable land and ensuring adequate food supplies is the top priority, the reports said.
In China, the first thing is to provide food for its 1.3 billion people, and after that, we will support biofuel production, the People's Daily quoted Wang Xiaobing, an official at the Agriculture Ministry's crops cultivation department, as saying.
China has begun auctioning some of its wheat reserves to help control a surge in prices in local markets, despite reports that the grain crop is expected to hit a record 490 million tons this year, the third straight year of bumper harvests.
Wheat prices are at their highest level in a decade, due to severe droughts in the U.S. and Australia, and corn prices have also surged by up to 20 percent in local markets.
Prices for edible oils, meat and other products have also jumped, drawing complaints from consumers.
China can supply nearly 100 percent of grain demand locally, and despite the country's relatively scarce land and water government policy supports maintaining basic self-sufficiency for the sake of national security.
here is an interesting graph
What does it mean? Well I am not an economist, but it looks like real oil prices are pretty well inversly correlated to real interest rates. Low interest rates equal high oil prices and visa versa. this is a bit counter intuitive eh? Or maybe not. Low interest = high growth = high oil demand. There is another (conspiracy) theory. Since the real price of oil has nothing to do with demand and everything to do with the balance sheet and P&L of the oil states, try this one on. Low interest = low cash flow on dollar deposits = high oil prices to keep the cash flow equal. The Oil states are becomming acustomed, no dependent, on a certain (now much higher) cash flow and are managing for cash flow.
December 4, 2006
Control of Oil - history repeats itself
thanks BigGav for the pointer to: Peak Energy: The Control Of Oil. I have added it to my reading list. I love this part:
"Unfortunately the author discounted the main oil peak (at that time predicted for around 2000) on the basis that, at the time, this was a full generation away, and that therefore the world will have moved onto a more sustainable and efficient energy model (he uses hydrogen as an example) and will have given up gas guzzling cars etc."
You probably noticed last week that GM announced that it is trying to "green up" the Hummer line by adding a diesel that could/would run biodiesel. GM also made big announcements about bring us the electric car. Whoops, didnt you already to that? And kill it the same month you brought us the Hummer? Big Car is not our friend. If you want to see the future of alternative autos, go to Santa Monica this weekend for the AltCar Expo. I will see you there.
December 2, 2006
OIL and refined products on its way back up after election
Just like I predicted, the bottom of crude and refined products was basically Nov. 7. check these charts from the EIA: Frameset 10. While I am not a conspiracy theorist, the data speaks for itself. There is probably as much an emotional reaction to the Democrat win leading to tighter oil policy as there may have been market manipulation by Bush's friends to win an election.
It seems the most outrageous claim of the refiners slashing their crack spread to fund the election may have had some weight as you see the price of refined products started to move up immediately as crude has continued to drop a bit or stay flat. That means the refiners raised their prices on election day and keep raising them. Go capitalism.
Whiskey and Gunpowder and LATOC debunk CERA report
If you believed any of the media hype pushed by big oil over the last couple of weeks around the CERA report claiming "Abundant hydrocarbons for the forseeable future", read this: Peak Oil: Life After the Oil Crash. Not only is CERA wrong, they are fundamentally bad scientist with a poor track record. Exposed are their previous way off 4 year natural gas forecast (and we are to believe their 20 year?) and the fact that CERA's estimates of oil reserves are based on the "data" published by the producing countries which has been obviously inflated. check out the chart showing stated reserves each year for the past 15 years. Note that the year OPEC decided to start indexing production quotas to reserves, all the producing countries magically found 2-4X more reserves in a single year! "Science" based on inflated numbers is not science.
November 30, 2006
T. Boone Pickens calls Peak oil NOW
He may be a bit self serving as he is trying to get his natural gas filling stations public right now, but Pickens is an oil man to the core and if there were more to be found, I am sure he would rather do that.
LITTLE ROCK, Ark. Texas oilman T. Boone Pickens tells central Arkansas business leaders today that the world has reached peak oil production and the United States, in particular, needs to find alternative sources of fuel.
Pickens made the comments in Arkansas at the Little Rock Chamber of Commerce's annual meeting.
The 78-year-old Oklahoma State University alumnus says about 85 million barrels of oil are produced a day throughout the world.
But he says because there are probably not any large, undiscovered oil fields left, the increasing demand for oil is rapidly diminishing the remaining supply.
Pickens founded Mesa Petroleum Company in 1956 and in September ranked 103rd on the Forbes magazine list of the 400 richest Americans, with 2.7 billion dollars from his oil and gas investments.
He now runs B-P Capital, a private investment firm interested in energy futures and stocks of public companies in various energy sectors.
my upcoming Starbucks cup
During late April and May, when you order your latte you may see a quote from me. This is prettyStarbucks Cup Martin tobias quote cool...
November 27, 2006
a lame duck finally takes action in Alaska
This little tidbit went largely unreported today: Alaska to strip oil companies of leases. The outgoing Governor of Alaska, Frank Murkowski stripped Exxon Mobile of it's natural gas leases after the company failed numerous times to develop the resources. I bet China would develop them. States have long let large oil companies run roughshod over their resources and slack off in numberous ways (environmental stewardship, investment, timeframe for resource development). Too bad it took loosing an election to get the governor to act, but finally something is happening. States need to stand up to big oil more often and not shiver in their boots at every meeting.
I remember when I was on the school board in Medford Oregon during highschool. The soda companies kept coming in every year for an extension of their leases of soda machines on school property. I said take them out, they only make the students fat. The "administration" and "professional" school board members valued the money the machines brought in more than the health of their students. The machines stayed. That was 25 years ago. Today many school boards are pulling the machines out and dealing with the loss of revenue in favor of student health. That one took too long as well. But the tide turned eventually. Hopefully the Alaska governor action is the beginning of a turning here as well. Hold the bastards accountable to the public whose resources they expoloit.
November 14, 2006
What does your oil money fund?
check out a well researched story in the LA times: Oil revenues fuel resistance to U.S. - Los Angeles Times.
"Iran maintains a costly nuclear program while spending billions to subsidize everything from apartments to gasoline. Russia defies international demands to give up a monopoly on oil pipelines to Europe. Venezuela sends aid to countries around the globe in an effort to expand its influence.
What all three have in common are treasuries swollen by the high price of oil."
We are funding discontent and people who do not like us all around the world. Come on America.
November 13, 2006
WSJ jumps on renewable energy bandwagon
Yes even the WSJ. Not in an editorial, but reporting a new RAND report soon to be released: Renewable Fuels May Provide 25% of U.S. Energy by 2025 - WSJ.com. I learned something new from this. The forested areas in industrialized countries are actually INCREASING. And the study further finds that renewable fuels like ethanol and biodiesel are a cheaper way to reduce net carbon emissions than mandating more carbon reducing technlogies on old coal plants for example. It totally makes sense. increase the percentage of your fuels that come closed loop, no net new carbons. Reduce the digging up of old dinasaurs in various stages of decay and releasing their carbon without off-set into the atmosphere. Hey, there is an idea....
Live more petroleum free
Why buy petroleum based products when there are good performing options? I needed a new life vest. B O D Y G L O V E makes one called the Eco that has ZERO petroleum based products. Now that is cool. I am wearing it surfing next weekend as it is going to be BIG.
The best thing from the election - more renewable energy
Frequent readers will know that I had alot of disappointments in individual races last week. But Washington voters added one shining light to the whole thing by passing I-937: Climate Solutions. Washington now joins 20 other states which require over time their utilities to start purchasing more and more renewable electricity. In the Washington case, 15 percent of large utility power must come from renewables by 2020. The most important part of this legislation is in the details. Renewables liquid fuels like biodiesel and ethanol burned in existing generating assets will qualify for the mandate. This is the first time those fuels have been called out specifically in a mandate like this. This provision opens up a key option to building a bunch of new generation assets, reuse existing ones with new fuels. That will make it a whole bunch easier for utilities to comply. Heck, you can even turn a coal fired power plant into a renewable electric plant by changing the fuel. I predict this will happen in the next 5 years. You read it here first.
November 6, 2006
The Fueling Station blog in Tampa picks up Kurt/Biodiesel story
The editor of: Fueling Station | Tampabay.com - St. Petersburg Times e-mailed me to say they picked up the Cobain/Biodiesel story from the NYT this weekend on their blog. Intrigued I clicked over. What I found is a very well edited blog focusing on fuel alternatives. Even found a potentially interesting source of ethanol - citrus waste. Thanks David for putting this together.
November 5, 2006
New bioplastics coming (again)
David Grewell out in Iowa talks like plastics from Corn and Soy are a novel idea: ScienceDaily: Researchers Improving Plastics Made From Corn And Soy Proteins. He must have missed Natureworks making packaging from corn for the last 5 years. Despite the self-serving research funding seeking nature of the press release, there is a nub of something interesting in there. The work on plastics from glycerine byproduct of biodiesel manufacturing from soy oil. There is no commercially viable formula for that today. It would be nice if Grewell and his team could come up with one. Unfortunately the truth is at the end of the article:
"The researchers' plastics aren't quite ready to leave the laboratory. Grewell said he's working on production recipes, processing techniques and ultrasonics applications. Kessler will also work to characterize the plastics' strength plus its thermal and mechanical properties."
In English: "Send me more money and I might be able to make this work".
Peak Energy by Big Gav
Thanks for the comment this morning Big Gav and the pointer to your blog: Peak Energy. Very good perspective from outside the US. I have added to my RSS and will be an avid reader.
November 4, 2006
Thoughts on Peak Oil
Maybe I have been reading too many gloom and doom sites lately, but Peak Oil has been on my mind. And in my reading material. After nearly two years reading, thinking, debating and actually doing something about it, I have come up with a couple of conclusions.
1. Peak Oil is real and imminent (next 1-4 years) if not already past. World wide oil production is unlikely to ever exceed 85 million barrels per day (around 82MBPD today).
2. Once at a world wide Peak, oil production will plateau for some time, propped up by "new" fields, the tar sands and other previously non-economic sources. But despite billions of dollars in investment and exploration, total WW oil production will not improve significantly and will eventually start to trail off.
3. During this plateau, oil prices will be wildly volitile as promisses of new sources and alternatives stoke the fires of hope and terrorism, war, OPEC restrictions, etc. stoke feelings of dispair. Don't forget, the vast majority of the world (including western governments) does not and will not have the facts about true oil production, reserves, discoveries, etc. Those few states run enterprises who do have the information have zero interest in letting the rest of the world know the plateau is here and every interest in keeping prices high and extracting every last dollar out of their resource.
4. We will be years into the plateau and possibly down the slope of the Peak before most people know what hit us.
5. There are few short term solutions. When recognition of the plateau and Peak starts to set in, there will be a rush to any near term hopes, especially "plug compatible" replacements like biodiesel and ethanol.
6. The only sure effect of all this is increased Volitility. Check out the CBOE VIX. Tight supply/demand of oil begets high volitility. During the Plateau Volitility will be at record highs. If you look at Oil in the last year and a half versus the prior 10 years, the volitility of prices has been off the charts. I believe increased volitility is a leading indicator of the Peak.
Now, what to do with these insights? Well invest in plug compatible alternatives to oil of course which I have done. If you are really cheeky, you might take bullish positions on companies whose markets are highly dependent on stable or predictable fuel prices. That one is tricky though because you would have to get widespread realization that we are on the plateau and heading toward the cliff to get a payoff. I don't think you need to have that realization to benifit from investments in alternatives.
A couple compelling global warming pictures
I was re-reading a report on peak oil this morning and am reminded of the global warming effects of oil use yet again. Look at the Tsunami damage in Thailand and the dwindling Arctic Sea Ice and the effects are clear. While I am not an expert on what is causing global warming, the fact that it is happening and that it is related to a tipping point of carbon in the air is impossible to deny.
November 1, 2006
Next NW Energy Angels meeting Nov. 9th
Come join me and see four northwest energy early stage companies
Thursday, November 9, 2006
*11:00 - 1:30 pm (please note time change)
Locations (please note new locations)
University of Washington - Husky Union Building (HUB) Room 108
UW Map - http://www.washington.edu/home/maps/northcentral.html?hub
Parking is complimentary
Please use Gate 3 Entrance and inform the gatehouse attendant that you have parking arrangement for "NORTHWEST ENERGY ANGELS MEETING." The HUB is about a 5-10-minute walk from the garage. Please aim to arrive at least 15 minutes before the meeting to avoid any parking delays.
905 NE 11th Ave, Portland, OR 97208 - Room # 770
For directions, please use www.mapquest.com
Parking - Please park at the Double Tree Hotel across from BPA
Security clearance will be required so please do not forget to RSVP by November 6 with your name and company. Please bring valid ID and arrive 20-25 minutes early.
Join us for the next meeting of the NW Energy AngelsTM presented by the Northwest Energy Technology Collaborative. Listen to exciting new companies, network, and learn more about investing in the energy sector.
The meeting will feature presentations from four companies involved in innovative electric transportation, a strategic agricultural energy solution, cellulose to ethanol technology and efficient engine technology.
Kirk Washington, Founding Partner of Yaletown Venture Partners, will provide an educational presentation highlighting his relationship with the angel community and the process of syndicating deals with angels. As well, Martin Tobias of Imperium Renewables, will give an update on biodiesel developments.
Accredited investors may attend one meeting as our guest at no charge. If you have not yet joined the group, please fill out and return the attached application by mail or email. Applications will also be available at the meeting.
Please RSVP to Thea Medrano at email@example.com. If you have any questi
October 30, 2006
New report from economist warns of economic disaster from climate change
It is not just the lefties who are worried now. Warming 'may cause economic chaos' - CNN.com This guy is pals with Tony Blair!
October 16, 2006
Quake hits Hawaii, what do you think will happen to local gas prices?
Over the weekend a big quake hit near the Big Island. Even though very far from Oahu, the two refineries on the island were shut down. There is roughly two days of gas/diesel/jet fuel supply in storage in Hawaii. This is an excuse for the monopolists to raise margins. Look out Hawaii...
POWER RESTORED TO HAWAII REFINERY
Power has been restored to Tesoro's 94,000 b/d refinery in Kapolei, Hawaii, following a power outage related to an undersea earthquake Sunday morning.
The refinery is now undergoing a safety assessment, and it's expected that units could be returned to service over the next several days, Tesoro spokeswoman Sarah Simpson told OPIS. Initial assessments indicate that the refinery suffered no material damage, Simpson said.
Chevron Corp.'s 54,000 b/d refinery in Honolulu, Hawaii, also was shut as a result of the power outage, said a statement issued by the company. It is early morning in Hawaii, and Chevron's spokesman in Hawaii was not available to provide an update at presstime.
A good part of the output at Hawaii's refineries is jet fuel supplied to the U.S. military.
The quake hit shortly after 7 a.m. Sunday local time. It was estimated to have a magnitude of between 6.5 and 6.6, and it is the strongest earthquake to hit Hawaii in 20 years.
Brad Addington, firstname.lastname@example.org
AG Edwards notes purchasing power for gasoline at best level since 1981
Most analyst focus myopically on the retail price of gas or diesel. The other side of that is where wages are. The divisor of those two is the amount of gasoline the average hourly wage can buy. That is a much better measure of the actual impact of gas prices on workers than comparing the price of gasoline against some arbitrary basket of goods. That number hit bottom in July at 5.6 gallons of gasoline per hour of average wage (the worst it had been since 1981). Since then it has rallied significantly and currently stands at 7.2 gallons/hour. This increase, in part explains the improvement in consumer confidence. Things are on the rebound and going well. Read the complete analysis here.
October 12, 2006
Northwest CleanTech conference
I spoke at it this week. John Cook over at the PI did a summary write-up: Clean tech revs up investors
The DOD knows Peak Oil is here and they are doing something about it...
Good article from: Peak Oil: Life After the Oil Crash on the DOD's use of oil and what they are doing about it (alot). Check out these stats:
"The U.S. government, as a whole, consumes not quite 2% of all the liquid fuel that the entire U.S. economy uses in a given year. That translates into about 440,000 barrels of oil per day, or slightly more than the entire output of the oil field at Prudhoe Bay, when the pipelines are not shut down due to corrosion. Multiply by 365 days per year, and the U.S. government burns up about 160 million barrels of oil per year, at a cost of something over $10 billion at recent price levels.
Of the total U.S. government liquid fuel use, about 97% of that is consumed by the Department of Defense, making that agency the world's single largest fuel-burning entity. "
Here is some of what the forces are doing:
"The U.S. Air Force is qualifying new types of fuel derived from both natural gas and coal. On Sept, 19, 2006, a B-52 bomber actually flew with one engine mount using a newly produced liquid fuel derived entirely from natural gas. Due to the nature of the manufacturing process, the fuel contains virtually no sulfur and hardly any heavy metals, as opposed to jet fuel derived from refined petroleum. In ground-based testing, the engines that burned this new type of fuel did not experience any measurable loss of performance and required less maintenance. Another virtue of this synthetic fuel is that it has a storage life that is orders of magnitude longer than petroleum-derived fuels."
"The U.S. Army is redesigning the ubiquitous Humvee. One of the key complaints about this versatile battlefield vehicle is that it consumes too much fuel. The Humvee has become an icon of the military services over the past two decades, since it replaced the World War II-era Jeep. But the Humvee gets as few as 4 miles per gallon in city driving and a paltry 8 miles per gallon on the highway. The Army wants to see a Humvee replacement that weighs 30-40% less and that uses proportionately less fuel."
Oil, smoke and Mirrors documentary on peak oil
An important new documentary now available on-line: Oil, Smoke and Mirrors - A new must see online video - see it here and NOW | MyPeakOil.org
Boon Pickens says don't rest on your laurels today with inexpensive oil, it is going to $100/brl
Boone Pickens says oil will reach $70 before 2007Billionaire Dallas hedge fund manager Boone Pickens said crude oil will reach $70 a barrel before the start of 2007. He said oil would reach $100 a barrel by July 2007, reiterating a forecast he made in a July 25 interview that oil would rise to $100 sometime within the next year. Pickens said it will take a geopolitical event to cause it to happen but he said "weve got a lot of opportunities for those.
October 2, 2006
Matt Simmons on the future of oil prices
Today matt Simmons has a good audio interview here.
An important movie in development
There have been many press reports on the tragedy of oil development in the Nigerian delta. Now there is a documentary in the works: :: SWEET CRUDE :: A documentary on the people of the Niger Delta. By a seattle film maker. I look forward to this important working coming out.
September 27, 2006
Recent reduction in gas futures a result of hedge fund "rebalancing?"
could be says: deconsumption. Basically Goldman Sachs rebalanced thier commodity index and lowered the dollar weighting of unleaded gas from 8.45% to 2.30%. That means all the hedgies who track that index were forced to sell 75% of their gas positions in Oct/Sept. Exactly now. This money will be coming back in after the election. Another data point on this being a temporary lull.
September 26, 2006
New NASA study notes climate change is on the brink
This is a timely study as tonight I am hosting a fundraiser in support of I-937 in Washington which would require 20% renewable energy in this state. Just say no to Coal.
Noting that “that this critical ocean region [Western Pacific], and probably the planet as a whole, is approximately as warm now as at the Holocene maximum and within. ~1�C of the maximum temperature of the past million years,” they conclude that additional global warming of more than 1� C relative to 2000 “will constitute dangerous climate change as judged from likely effects on sea level and extermination of species.”
In LA friday for tonight Show
This Friday, Jessica Simpson and Bill O'Reilly will be on: NBC.com > The Tonight Show with Jay Leno > Guests. I will be in the audience. Look for me in the front row. Jay is a big supporter of biodiesel and I am meeting him earlier in the day at his shop to have a look at some diesel projects he has. We also sent down some of our biodiesel for him to run in his Turbine motorcycle. I hope it worked!
August 30, 2006
FBR tells the truth about the Ethanol market
Still a significant supply/demand imbalance that won't be solved before the end of the year. The recent trades down on VSE and AVR are the lemmings getting out. Stick with the fundamentals of supply/demand and you see these companies are bargins today.
From most recent FBR report on Refineries:
Ethanol consumption rose to record levels, latest data shows. U.S. fuel ethanol consumption averaged a record 6.2 billion gallons per year (annualized) during June, we calculate, using recently released DOE production and inventory data. This compares very favorably against the prior month’s 5.4 BG/Y rate and the 2005 full-year average of 4.0 BG/Y. Gasoline refiners and blenders moved to replace MTBE with ethanol much more quickly than most people expected, in our view, creating an octane shortage and causing ethanol prices to spike. U.S. ethanol production rose from 4.5 BG/Y in May to 4.9 BG/Y in June, but domestic production was still 1.3 BG/Y below demand, necessitating a substantial increase in imports and a drawdown on inventories. While U.S. ethanol production capacity continues to grow, we believe it will take several more months for supply and demand to arrive at a more normalized balance. In the meantime, we expect ethanol prices to remain high, benefiting Aventine (AVR) and VeraSun (VSE).
August 23, 2006
The Saudi Connection
Want to know the Saudi connection to the US oil supply? This is the best article I have seen on it: USNews.com: How billions in oil money spawned a global terror network
August 21, 2006
Chicago Tribune oil article review
Here is the summary you should read: The Chicago Tribune story on oil | EnergyBulletin.net | Peak Oil News Clearinghouse. Ever wondered where your gallon of gas comes from and what is involved? read the summary here and if you have time follow the links to the whole story at Chicago Tribune and the video! I did!
August 18, 2006
Tesla motors signature 100 sells out
Sold out. Very cool. Three weeks. There is a HIGH demand for effecient fast cars. Very cool.
August 13, 2006
Fuel cell scooter
On the lust list for this christmas is this little ditty
Ah, I hope Santa has room.
Watch the Tesla motor cars video
On AutoBlog. My order is in, is yours?
The relationship between excess OPEC capacity and price
I have been talking for some time about the relationship between capacity and price volitility in oil. Students of historical prices miss the fundamental point that we are at max capacity in both supply and demand in the system today. When there is excess capacity, higher prices bring it into the market and prices moderate. Prices wont' moderate because there is little to no excess capacity. Check out this graphic which I just found.
August 7, 2006
Where the "smart money" is investing
Business Week has a funny graphic with the "leaders" of clean fuel investing: Table: A Few Who Think The Market Is Ripe (including Paul Allen and Imperium Renewables of course).
August 4, 2006
Join me for World Watch President talk on Global Oil
The Worldwatch Institute and the World Affairs Council of Seattle present
BREAKING OUR ADDICTION TO OIL
President, Worldwatch Institute
Tuesday, September 26, 2006
Registration 6:30 PM
Program 7:00 PM
The Mountaineers 300 Third Ave. West Seattle, WA 98119
The price of oil has risen from $34 per barrel in 2004 to $78 per barrel in 2006. How are sky-rocketing energy prices affecting the global economy? What are some concrete steps that need to be taken in order to decrease the United States dependency on oil? What can Seattle do to prepare for peak oil? Besides oil companies, who else benefits from rising oil prices? The World Affairs Council of Seattle presents Christopher Flavin, President and CEO of the Worldwatch Institute, an international research organization whose focus is the achievement of an environmentally sustainable future and a socially just society, to speak on the U.S. oil dependency crisis at an evening lecture on Tuesday, September 26. Flavin will discuss his strategy for improving energy efficiency, developing renewable fuels, and building cooperative alliances with countries in Europe, Asia, and Latin America.
COST: $10 World Affairs Council Members and students, $15 Guests and general public
To register for the event or for more information please visit http://www.world-affairs.org/calendar.cfm or call the World Affairs Council at (206) 441-5910.
July 31, 2006
Come eat breakfast with me Aug. 17 at the Westin Seattle
We will be talking Clean Tech energy investing. enterpriseseattle.org - August Economic Update Breakfast
Most oil reserves are under state control
This from the DOe.
Bloomberg article on VC investing in clean energy (including me!)
The spin of this article: Bloomberg.com: Exclusive is a bit on the hype side. I believe that is for the benifit of selling more magazines. Or Vinod doesn't want everyone coming to what he thinks is "his" party. Both are off the mark. We are not even out of the locker room in this game. The markets are so large they can support 100x more companies than the dotbomb erra. There is nothing like a bubble building, only the very beginnings of momentum. Add the TOTAL VC spending in Clean Energy Tech against the industry spending in Clean Energy tech, and you still get one of the most pathetically underfunded R&D budgets of any industry in the history of mankind. These guys are used to spending their money "exploring" for new pockets of dead dinasaurs, not truly being "energy" companies in the broad sense of the word.
July 27, 2006
$100 oil wouldn't kill the economy, so I expect it soon
What is the highest price of oil? When demand destruction off-sets revenue gain. A new study on Businessweek: Would $100 Oil Slam the Global Economy? concludes that number is NOT $100/barrel. Sure, it would hurt, sure it would be $5 gas. But it wouldn't destroy a material amount of oil demand. Therefore it will happen. And soon.
July 25, 2006
Fun biofuel facts from World Watch
Want a bite sized summary of world wide biofuel developments, oil trends and national initiatives? Biofuels for Transportation: Selected Trends and Facts | Worldwatch Institute
Some juicy tidbits:
- From 2002–04, world oil demand increased by 5.3 percent. China's consumption alone increased by 26.4 percent, while consumption in the United States rose by 4.9 percent; Canada 10.2 percent; and the United Kingdom 6.3 percent. Demand in Germany and Japan, meanwhile, dropped by 1 percent and 2.6 percent respectively.
- Global ethanol production more than doubled between 2000 and 2005, while production of biodiesel, starting from a much smaller base, expanded nearly fourfold. In contrast, oil production increased by only 7 percent over this period.
- The GHG balance of biofuels varies dramatically depending on such factors as feedstock choice, associated land use changes, feedstock production system, and the type of processing energy used. In general, most currently produced biofuels have a solidly positive GHG balance. The greatest GHG benefits will be achieved with cellulosic inputs, such as dedicated energy crops and waste residues.
July 22, 2006
how close are you to Petroleum free?
Well after I got the sprinter van, I am 100% petroleum free in transportation. This article: Earthtoys - Emagazine points to some other aspects of your life to look at. Would be nice if there were a retailer that sold all petroleum free products and educated consumers on that lifestyle. Hey, that may be a business idea....
July 17, 2006
The Governator release BioEnergy plan
I am going down to LA wend for the launch event of Tesla Motors. Arnie should be there. This Gov's Bioenergy_Action_Plan.pdf is a good plan and I will commend him for it. Most of the "goals" have 2008 deadlines, so nothing will happen in the immediate future, but there will be some progress. Here are some highlights:
"Regarding biofuels, the state shall produce a minimum of 20 percent of its biofuels within California by 2010, 40 percent by 2020, and 75 percent by 2050."
The CARB will:
"Consider adoption of fuel specifications for motor vehicle fuels, such as B2, B5, B20, and B100 by December 31, 2007."
"Complete a peer-reviewed study of the emissions performance, costs, and benefits of using biofuels and biofuel blends, using a multi-media approach by July 31, 2008"
"consider adoption of regulations by june 30, 2008 requiring heavy-duty diesel engine manufacturers to warrantee heavy-duty diesel engines using California diesel and B2, B5 and B20 meeting the California specifications above."
July 16, 2006
PEIX investor list
Who invested in Pacific Ethanol's latest round? here it the list: Energy Stocks � Pacific Ethanol's Private Placement Investor List (PEIX)
July 2, 2006
NOAA indicates an 80% chance of an above-normal hurricane season
Real the full report: Climate Prediction Center - Atlantic Hurricane Outlook
Selling my supercharged Avalanche
on ebay: eBay Motors: Chevrolet : Avalanche (item 290003830873 end time Jul-09-06 11:32:42 PDT). going all diesel with the dodge sprinter van.
July 1, 2006
Adding Boinc client for climate change research
With this handy client: BOINC you can attach your computer to multiple grid computing projects and run many at once, or share resources at different ratios. I like this instead of just choosing one. I set it up on three computers at home and started with all resources dedicated to BBC Climate Change project. Thanks to Slashdot for the backslash analysis of all these grid projects.
June 20, 2006
How did Brazil do it?
You have probalby heard that Brazil is now oil independent from unleaded because of their ethanol business. How did they do it? a new report tells you how and what they plan to do as an encore.
June 12, 2006
Nancy Floyd on Northwest Clean Tech
Nancy Floyd is a partner at Nth Power and on my board. So her most recent article (cover) of Oregon Business Magazine: Current Issue was par for the course. She is a leader nationwide on cleantech but notes that the Northwest and Oregon in particular is falling behind despite it's "green" image. A good read of activity in the region.
June 9, 2006
strong demand for Ethanol ipos
Aventine sets a very high range for their IPO: StreetInsider.com and Verasun raises their range due to strong investor demand. Verasun also increases the number of shares offered (although all from existing investors, not money going to the company).
UBS officially launches biofuels index notes
If you want to play the upside on biofuels commodities with principal protection, here are the notes for you. (I am not a broker nor am I personally investing in these notes). They are a little ethanol heavy for me, but ethanol will drive most of the demand for feedstocks relative to biodiesel over the next couple of years anyway.
BIOFUEL INDEX NOTE.pdf
June 8, 2006
Thoughts on the Hawkeye S1
More bedtime reading last night. This one is truly a page turner with a surprise on every page. A good analyst highlight here Here are some things that struck me:
1. in 2005, Ethanol was 89.2% of revenue and distillers grain 10.8% Note that Verasun is 85%/15%. I wonder if Hawkeye has a better market for ethanol or a worse market for DDG?
2. Gross profit margin of 24.5%
3. About $3/gallon of current capacity in debt. My reading of the other Ethanol plays puts this one with the highest leverage. Interest expense in 2005 of $14,863,000.
4. Corn costs "for year ending December 31, 2005 made up approximately 46.9% of our total operating expenses". with corn prices having dropped in 2005.
5. No technology differentiation. In fact a huge disclaimer on the fact that new technologies may displace them. Some of this just the lawyers, but read this disclaimer: "The development and implementation of new technologies may result in a significant reduction in the costs of ethanol production. We cannot predict when new technologies may become available, the rate of acceptance of new technologies by our competitors or the costs associated with new technologies. Significant amounts of oil and natural gas ar required to grow, fertilize and harvest corn, and to ferment and distill corn into ethanol. New technologies that seek to develop more energy-rfficient means to produce ethanol from cellulosic biomass could displace the corn-based technologies used in our facilities and materailly and adversly affect our busines and business prospects. In addition, advances in the developmen tof alternatives to ethanol could significantly reduce the demand for or eliminate the need fo rethanol. Any advances in technology which require significant capital expenditures to remain competitive or which reduce demand fo rprices for ethanol could have a material adverse effect on our results of operations and financial condition."
6. Hawkeye makes a point of saying they are NOT in any of the "pooling" agreements for ethanol distribution and suggests a competitive advantage for that, yet they have given their marketing to an exclusive agend Eco-Energy, Inc. upon whom all the marketing is dependent.
7. Apparently the entities that own the assets are not today American corporations. "After the Conversion, we will become subject to corporate income taxes in the United States."
8. Read this: "Our substantial indebtedness could have important consequences for you by adversely affecting our financial position." Yea, $650M in debt will do that to a guy. Read on: "Our ability to make payments on and refinance our indebtedness will depend on our ability to generate cash from our operations." Much of this is standard debt disclosure, but the tone is much more severe due to the high amount of leverage in this deal.
9. Here is an interesting concept I have not seen before. Hawkeye will be a "controlled company" which means the public shareholders don't control it. From their disclosure "Upon completion of this offering, THL will continue to control a majority of the voting power of our outstanding common stock and we will be a "controlled company" within the meaning of the New York Stock Exchange corporate governance standards. Under the New York Stock Exchange rules, a company of which mor ethan 50% of the voting power is held by another person or group of persons acting together is a "controlled company" and may elect not to comply with certain New York Stock Exchange corporate governance requirements." These go on to include independence of the board, etc. I wonder if that is good for all shareholders?
10. how bout this one "You will experience immediate and significant dilution in the tangible book value of the shares you pruchase with this offering." This is because the money is going straight out the door to pay debt rathen than to grow the company.
11. While I understand accountants are getting more conservative in their opinions, his is the first S1 I have seen with a "material weakness" letter on file. Here is the disclosure: "Our management and auditors ahve identified a material weakness in the design or operation of our internal controls that, if not properly remediated, could result in material misstatements in our financial statements in future periods." "Our failure to maintain adequate control over the financial reporting process has resulted in adjustments to our financial statements related to the accounting for and reporting of certain derivative transactions and reporting of cash flow information." Huh?
12. The next disclosure goes on "A failure to achieve and maintain effectie internal control over financial reporting in accordance with the rules of the SEC could harm our business and operating results and result in a loss of investor confidence in our financial reports, which could have a material adverse effect on our business and stock price." You think?
13. Hedging losses. "an increase in accrued expenses of $37.3 million, representing the estimated fair value of certain forward sales contracts determined to be below market" Basically their strategy of forward selling, undoubtedly driven by financial covenants around their debt leverage, has backfired.
14. Natural gas prices increased 92% QtQ in Q106 and represented 21.5% of COGS Q106 vs 16.4% COGS Q105. versus Verasun at 19.7% and 18.5% respectively. The casual observer could conclude that Hawkeye's plant is getting less efficient with natural gas whild Verasun's is getting more.
15. "We recorded a net gain from commodity option transactions of $0.9 million in the first quarter of 2006.." This is the first S1 I have read with a gain. Most have had losses on commodity option transactions. Must have some smart guys there.
16. "The term loan facility bears interest rate at a six-month LIBOR rate plus 2.875%." Verasun has the same, but +3.00%.
17. "As of December 31, 2005, approximately 64% and 16% respectively, of our estimated ethanol and distillers grains production in 2006 was subject to fixed-price contracts" this is versus 48% at Verasun. That is ALOT of fixed price contracts in a period of rising ethanol prices they are not able to capture the upside. That is why they are recording expenses (above).
18. Here is an interesting one: "We have two customers, one of which accounts for all of our ethanol sales and the other which accounts for all of our sales of distillers grains."
19. They have a big play in logistics. "Through a long-term lease agreement, we have access to over 500 rail cars for our exclusive use for at lease the next five years. We believe that this dedicated rail supply provides us with a logistical advantage over other ethanol producers by allowing us to deliver ethanol to the highest bidders in a timely manner. In addition, we own a 63.5% interest in the D&W Railroad LLC, which owns the 52 mile spur from our Fiarbank plant to the Iowa Northern line."
20. This is my personal favorite: "Hawkeye Renewables also will pay THL Managers VI, LLC at the closing of the THL Transactions a transaction advisory fee of $20.0 million."
Great site tracking alternative energy stocks
Lots of good momentum charts slice and diced every which way. Energy Stocks. Some good alalysis as well.
June 7, 2006
Ethanol valuation round-up
More Ethanol Makers Plan to Go Public SmartMoney.com is a good round-up of current Ethanol related public valuations, revenue and activity. A little light on analysis, but most coverage is today.
June 5, 2006
thoughts on the Verasun S1
My weekend reading was the Verasun S1 IPO filing. Very interesting stuff. A couple of interesting observations and take-aways.
1. The revenue from Dried Distillers Grains was flat from 2004 to 2005 while ethanol production ramped significantly. The only conclusion, DDG prices are falling. In 2005 they represented about 15% of the revenue down from 18% in 2004. DDG is a material part of the economics of ethanol and market is getting flooded meaning for profitability to stay, ethanol prices have to go up.
2. Natural gas prices (the second most expensive cost of goods) increased 207.3% QtQ from Q105 to Q106. Nat gas represented 19.7% of Cogs in Q12006. 18.5% in 2005 and 12.4% in 2004. This makes ethanol as much a bet on natrual gas prices as corn prices.
3. Transportation expense in creased 123.8% QtQ from Q105 to Q106. These plants are fixed to rail logistics. Rail cars are hard to find and expensive. The trains that carry them have near monopoly power to set and raise prices. Transportation represented 14.6% of the COGS in 2005.
4. Verasun markets "substantially all of the ethanol that we produce at our two facilities" through Aventine Renwables who have now entered the business directly and are listed as major competition. Verasun will be responsible for their own marketing in mid 2007 and after.
5. "During 2005, approximately 48% of our ethanol sales were made under fixed price contracts, 16% under indexed contracts and 36% at spot prices." That strikes me as alot of fixed price contracts with lots of varying inputs.
All this is against a raising price of ethanol. They also
June 4, 2006
CIBC opines on climate change impact on natural resources
Al Gore's movie primier went apparently well this weekend. You will be seeing more graphs like this. These are from CIBC up in our great white north. You can ar
California presses for more biofuels (thanks Arnie!)
In line with his strong leadership in reducing California's dependence on petroleum fuels, Governor Schwarzenegger today directed several state agencies to take major steps toward the widespread use of renewable energy sources known as bio-fuels. Biofuels, such as ethanol, can be developed from specially grown crops such as corn and sugar, to produce clean, renewable transportation fuels or electricity. Fuels can also be developed from naturally occurring waste, such as rice straw, animal waste and municipal solid waste.
"It is critical that we do everything we can to reduce our dependence on petroleum-based fuels," said Gov. Schwarzenegger. "Turning waste products into energy is good for the state's economy, local job creation and our environment. By implementing biomass programs in California, we will help fight critical waste disposal and environmental problems, including the risk of wild fires, air pollution from open field burning, and greenhouse gas emissions from landfills."
The Governor issued Executive Order S-06-06 establishing targets for the use and production of biomass products such as biofuels (liquid) and biogas (gas) as an integral part of California's renewable portfolio standard. To achieve these targets, he directed the California Energy Commission (CEC), the Resources Agency and other state agencies to collaborate, research, promote and identify funding to advance biomass programs in California. The CEC will report the progress to the Governor's Office and Legislature on a biannual basis.
California will produce a minimum of twenty percent of its own biofuels by 2010 and forty percent by 2020, according to targets set by the executive order. Currently, of the 900 million gallons of ethanol consumed in California (which is 25 percent of the entire nation's consumption), only five percent is produced in California.
The executive order also calls for the use of biomass for electricity to reach 20 percent within the state's Renewables Portfolio Standard (RPS) goals for 2010 and 2020.
The Governor has also made it a priority to develop a self-sustaining solar industry for California. Last year, he introduced the Million Solar Roofs Initiative, which included $2.9 billion in incentives to homeowners and building owners who install solar electric systems. He sponsored legislation to fund the incentive program that rewards the installation of systems in new and existing residential and commercial sites. The Governor worked with the California Public Utilities Commission (CPUC) which is now implementing the program, which will lead to one million solar roofs in California by 2018.
Under Gov. Schwarzenegger's leadership, California has continued to champion policies that reduce the state's dependence on petroleum. To promote the transition to alternative fuels, the Governor led the effort to create the hydrogen highway which will provide Californians with 200 hydrogen fueling stations across the state. Gov. Schwarzenegger has also promoted the Flex Your Power at the Pump program encouraging Californians to use gasoline more efficiently.
UBS: Oil outlook "fundamentally bullish through 2008"
some top tier analyst research on oil outlook.
UBS oil outlook April 2006.pdf
Siemens ships commercial quanity of copper rotor motors
This is big news: Super-efficient Motors with Copper Rotors Enter U.S. Market - EnergyVortex. Efficiency of electric motors is a key metric. Copper is just plain more efficient than aluminum. But the problem has been that copper is notoriously hard to mass manufacture to the quality specs needed. Many people have gone with hand made rotors for efficiency and power like Tesla motors. The effect is amazing, just drive the car! Expect the next couple of years to see alot of retrofit business replacing old electric motors with these new super efficient ones. Go Siemens!
1000 HP ethanol powered Viper
Who says environmentally friendly has to be compact and slow? My friend Karl Jacob is building the worlds fastest ethanol car at: e85viper
my favorite new artist
check out these images from Karina El Azem, an up and coming Argentine artist. I just bought all of these.
June 2, 2006
New home of the petrocide shirt
Political T-Shirts, Anti-War T-shirts, Anti-Bush T-shirts from Demockratees.com. They moved since I bought last time.
May 29, 2006
Diesel and Biodiesel in Italy
One of our guys just got back from Italy with these pictures:
Biodiesel is the middle one. A couple cents more than diesel a couple cents cheaper than unleaded. 50% of the cars were diesel. He saw at least 10 different mercedes diesels. He said without the lable on the back he wouldn't even have know it was a diesel it was so clean and quite. These are coming in 2007.
May 27, 2006
Cement that eats NOX and CO?
Wow: Cement that Absorbs Pollution � Coolest Gadgets. If this works, I am building my next house out of it!
BP goes big on biofuels in Australia
SenterNovem GAVE, Climate neutral gaseous and liquid fuels / biofuels reports that BP has announced an investment in a biodiesel refinery for 100M litres per year (tallow very interesting) and another 100M of ethanol. Looks like the giants are awakening.
Dutch pass 5.75% biofuels RFS for Kyoto
i have mentioned a couple times that the fastest way to meet Kyoto targets is to switch to biofuels. The Dutch agree in this article: SenterNovem GAVE, Climate neutral gaseous and liquid fuels / biofuels. They were going to have trouble meeting their Kyoto requirements and the solution was to increase the pace of biofuels adoption.
Bioproducts, Science and Engineering Lab in Tri-Cities
Catching up a bit on news. The Tri-City Herald: Local has a very extensive package including alot of video on the groundbreaking of the Bioproducts, Science and Engineering Laboratory in the Tri Cities. This will be a $24M research facility to keep Washington state on the leading edge of bioproducts including biofuels, biolubricants and other petroleum alternatives. See John Plaze founder of Seattle biodiesel talk up a storm!
May 24, 2006
Northwest Energy Angels meeting this week
The group I started this week we see three companies. May 24 from 11:30-1:30. This time in two places tied together with video conference, Seattle And Portland. Come to either.
For questions or comments, please contact:
Thea Medrano (on behalf of Nate Silverman, Manager, NW Energy Angel Group)
Northwest Energy Technology Collaborative
NOTICE: This communication may contain privileged or other confidential information. If you are not the intended recipient or believe that you may have received this communication in error, please reply to the sender indicating that fact and delete the copy you received. In addition, you should not print, copy, retransmit, disseminate, or otherwise use the information. All original material created by the sender of this e-mail is the property of the sender. Thank you for your attention to this.
May 21, 2006
Jefferies Clean Tech industry overview March 2006
Prior to their conference last week, Jefferies analyst produced a Clean Tech industry overview which is one of the best I have seen from any bank. Here it is:Jefferies CleanTech Review - March 2006.pdf
May 16, 2006
USDA projects biofuels demand on crops
the USDA is probably the best source of numbers for agricultural production because they actually talk to farmers: Planet Ark : Ethanol, Biodiesel Eats Into US Corn Stockpiles. Corn demand for Ethanol is expected to be up 34% this year but only 20% of the total crop. Prices of Corn are at a 10 year high, but then so is supply. Soy on the otherhand has a huge and growing carryover (crop from last year that was not sold). In soy while Biodiesel will consumer 3x what it did last year, it will still not affect the overall demand for the crop due to the small percentage overall. The crop (last year was a record) is expected to be another record at over 17 million tonnes (34,000,000,000 lbs) while demand for soy oil for biodiesel is expected to be 2.3 billion pounds (about 300m gallons) which I think is high. The real issue with biodiesel is that soy is a very ineffecient oil seed crop, yielding less than 14% oil. You can't grow it just for the oil. Most of the money is in the meal part. What demand for oil will do is promote expansion of more efficient oil crops. Although in the short term we may have some transition issues off soy.
April 30, 2006
The carnage continues in Carbon
Down 50% for the week. Planet Ark : CO2 Market on Brink as Price Continues to Slide. This could be the end for the whole idea of a commercial market in carbon. The money lost is staggering. Not stock market Black Tuesday type money, but big enough to scare people away from this commodity for some time and take a long time to recover. Remember, this is not a long traded thing that has just hit a temporary lul. There is a question as to the value of this commodity overall. It may be totally worthless. I expect governments to step in soon and make some very supportative words around increased requirements for carbon caps. Maybe the European stock markets will accellerate putting carbon on the balance sheet of all companies. This sure puts a crimp in the US efforts for a commercial system.
Now for something you don't see every day
buy a turn-key solar and biodiesel powered base camp for 10 people. fully 100% off the grid, generates its own water, composting toilets, satellite phone/internet, the whole thing. You haul. Sounds cool...eBay: Solar Powered, Bio Diesel Base-Camp For Sale (item 7613625231 end time May-25-06 10:32:04 PDT)
April 28, 2006
The President's speech unfairly characterized in the media
This week the President made a major speech on Energy Policy. I would encourage everyone to actually read it. The sound bites that were snipped by the media and the talking heads that followed claimed it was a knee-jerk short term reaction. But the text reveals a much deeper program and more thought. Especially interesting is his plan to end tax breaks for certain oil industry activities noting that at these prices the public doesn't have to subsidize the industry like it has in the pasts. Here are more highlights:
Today, President Bush Discussed The Four Parts Of His Practical Plan To Confront High Gas Prices. The President's plan includes making sure consumers and taxpayers are treated fairly, promoting greater fuel efficiency, boosting our oil and gasoline supplies, and investing aggressively in alternatives to gasoline, so we can eliminate the root cause of high gas prices by diversifying away from oil in the longer term.
America Is Addicted To Oil, And An Increasing Amount Of The Oil We Need Comes From Foreign Countries. Some of the nations we rely on for oil have unstable governments or agendas hostile to the United States. These countries know we need their oil, and that reduces our influence. We must not allow America to be put at risk by the unfriendly leaders of foreign countries.
It Is Important To Understand Why Gas Prices Are High. The market for oil is global, and America is not the only large consumer. Countries like China and India are consuming more and more oil, so global demand for oil is rising faster than global supply. As a result, oil prices are rising around the world, which leads to higher gas prices in America. America's gasoline demand is projected to increase this summer, and our refining capacity is stretched tight, making it difficult for supply to keep pace with demand. To compound the problem, we are undergoing a rapid change in our fuel mix - a transition from MTBE to ethanol in certain fuel blends, and that transition is temporarily pushing up gas prices even more.
EIA estimates higher gas/diesel prices by 25 cents this summer, I think they are WAY low
Regular unleaded is over $2.99 in seattle today with diesel over $3.09. And the huricane season is not here yet.
I predict average prices well over $3 per gallon for regular unleaded and over $3.20 for diesel.
EIA: Gasoline Prices to be Higher this Summer
Retail prices for regular gasoline are projected to be 25 cents higher this summer than they were last year, according to DOE's Energy Information Administration (EIA). The EIA's Short Term Energy and Summer Fuels Outlook, released yesterday, projects summer gasoline prices to average $2.62 per gallon. The high gasoline prices will be largely due to continued high prices for crude oil, which is projected to average $65 per barrel this year. Other contributors to the high prices are a strong growth in demand for gasoline coupled with new requirements for low-sulfur gasoline and voluntary efforts by refiners to phase out their use of the additive MTBE. As noted by the Renewable Fuels Association (RFA), the MTBE phase-out is only expected to contribute a few cents to the overall cost. Retail diesel fuel prices are also expected to average $2.62 per gallon this summer, with high prices partly caused by a requirement to phase in ultra-low-sulfur diesel fuel beginning in June. See the EIA report and the RFA press release.
Retail gasoline prices have been on a steady rise in recent weeks. According to the Fuel Gage Report, a publication of the American Automobile Association, yesterday's prices for regular gasoline averaged $2.686 per gallon in the United States, up more than 32 cents per gallon from a month ago. See the Fuel Gage Report.
April 27, 2006
Carbon crashes in Europe
With mandated caps Europe has been a bull market for carbon. But this week it crashed 30% as actual emissions data came out in France that was well below the caps. Planet Ark : Lax EU Emissions Targets Put Carbon Into Freefall. Carbon prices in Europe are still a multiple of the voluntary system in America. And some of the largest polluters are yet to report so there could be a recovery. I predict severe volitility in carbon over the next three months as the actual demand for credits is determined and the speculation is washed out.
April 24, 2006
wow, ask and you shall receive: gas price monitor
Just this weekend I was thinking to myself: "Self, wouldn't it be a cool application to have a web site that monitored gas prices in your area and alerted you to the cheapest, etc.?" Here it is: Seattle Gas Prices - Find Cheap Gas Prices in Washington. It is a network of gasbuddy. User generated content on gas prices all over the country. A cool map that shows "heat" of prices around the country by county. Of course California is the hottest. Very cool application! Now they just need an RSS feed of say the cheapest price within 5 miles of my zip code.
April 8, 2006
Look out for $4 gas this summer
This from the PI this morning: Latest probable relic of the past: Cheap gas. We haven't started the summer driving season yet. Spring is typically a DOWN time for gas prices. Demand from winter heating oil is tapering off and the summer vacation season hasn't kicked in yet. But already the price of regular unleaded has jumped 41 cents since LAST MONTH in the Seattle area. Overall the West Coast is 27 cents higher than this time last year while the Gulf Cost is 43 cents higher. And we haven't even seen demand or any disruptions from huricanes or war.
Another interesting tidbit from the story, the breakdown of costs. 60 percent of a gallon is the cost of crude, 20% taxes, rest refinery and marketing which is fairly costant. But checking the profits of the refiner and marketer, they are following the percentage up even though their costs haven't changed. Expect another record profit summer for the oil companies.
I also expect more than 6 weeks this summer for biodiesel to be CHEAPER than diesel. Go buy a diesel NOW while still can.
April 5, 2006
Chicago C02 mart links with Europe
Well in trials anyway: Chicago climate mart to try CO2 link with EU - Yahoo! News. Since the US is voluntary and Europe is mandatory, there is a significant price difference as you can expect. About double for carbon in Europe. But why? Is there something wrong with American Carbon credits. Well yes, they are not verifiable by European regulators. But if this hook-up works and we get verfication figured out that will raise the price of carbon credits in the US. GREAT for us. Carbon credits are a major by-product of biodiesel. Go hook-up go.
April 4, 2006
Stoel Rieves analysis of Alternative Energy tax credit extensions proposed by Sen. Grassley
The big man is extending them all. PTC, Biodiesel and Ethanol. Good stuff.GrassleyAltEnergyExtender.pdf
March 30, 2006
NW Energy Angels gets noticed
The NW Energy Angel network which I started is getting some notice: Northwest Energy News Analysis: Angels help launch energy start-ups. Companies have been funded and investors are getting educated. Next meeting is April 27. E-mail me if you are a qualified investor and want to come.
March 28, 2006
Guiness Atkinson releases report on Alternative Energy and launches Alt Energy mutual fund
While a bit of a marketing brochure for their new fund, the newly released alterevolutionweb.pdf report from GA is pretty good reading. High level view of energy demand over the next 20 years across sectors and the alternatives including share, growth rates, etc.
Richard Lugar speaks out on Oil dependence
Richard Lugar, Chairman of the Senate Foreign Relations Committee and no wimp, gave a major speech on energy independence at the Brookings Institute on March 13. Read the entire text. This is not your father's Republican. Some tasty tidbits:
"...energy is the albatross of U.S. national security."
"...oil will become an even stronger magnet for conflict and threats of military action, than it already is."
"Americans paid 17 percent more for energy in 2005 than in the previous year. That increase accounted for 40 percent of the rise in the consumer price index. Last November, we spent more than $24 billion on oil imports, accounting for more than a third of our trade deficit."
Of course Lugar used the event to announce a new bill. A senator can't stand to point out a problem without a solution of his own making close at hand. His "Energy Diplomacy and Security Act" Basically he wants an alliance of oil consuming nations to band together against OPEC. Good luck pal. Lugar also talks about the Obama-Lugar bill (talk about the pot calling the kettle black) which creates an alternative diesel standard and incentives for FFV. I like the second one. Good to see a cooalition of the willing on this one.
March 26, 2006
Watch CNN Presents: We were warned - tomorrow's Oil Crisis
I am watching now. Every American needs to watch this. A little hyped up by the media as you would expect, but not too bad. Go get the video from CNN.com or your favorite video sharing application
We were warned.Created in consultation with Set America Free, the television special "CNN Presents: We Were Warned - Tomorrow's Oil Crisis" was a real reminder of how close we are to the iceberg. What started as a severe Katrina like hurricane that wiped out Houston became a nightmare scenario in which terrorists attacked oil production facilities in Saudi Arabia sending the oil market into turmoil. In this powerful program CNN Presents showed a hypothetical scenario of severe disruption to the global oil market, interviewed international security and energy experts like Jim Woolsey and Matt Simmons about the vulnerability to disruption, and explored the potential of alternative fuels and conservation strategies. "In the long war of the 21 century we've got to be more resilient than we are now or we will suffer a knock out because of the fragility of our energy infrastructure," Woolsey said. "If you don't worry about oil interruption you're living in some sort of a fool's paradise." This statement was aired only two weeks after two suicide bombers drove their explosive laden cars into the world's largest processing facility Abqaiq in Saudi Arabia. The two cars "could have caused more loss of life and economic devastation than the two planes that crashed into the World Trade Center on Sept. 11, 2001," wrote Gal Luft in the Washington Post. A statement issued by Al Qaeda after the attack promises that the economic Jihad on which they embarked is still in its infancy: "There are more like them who are racing toward martyrdom and eager to fight the enemies of God, the Jews, the crusaders and their stooges, the renegade rulers of Arab countries. You will see things that will make you happy, God willing."
March 23, 2006
Peak Oil links
If you want to know the future, click here:
>>WARNING: THIS IS THE RED PILL<<
http://www.dieoff.org (founder Jay Hanson offers the most comprehensive and informed analysis of the human condition, IMO)
http://www.oilempire.us/peakoil.html -You're really not going to like this.
My favorite Peak Oil blog:
Great video to show your friends:
HUGE collection of links:
March 21, 2006
Fuel cell/turbine combo shows promise
While at first look this: Hybrid FuelCell MicroTurbine Energy System - EnergyVortex announcement looks like another PR plug for two failing technologies, there is more if you think deeper. One big ineffeciency of fuel cells is all the waste heat. An issue for turbines is their effeciency and cost of fuel. What if you could take a waste product and turn the turbine? Turns out you can at 56% effeciency. Staggering in today's energy generation market. Look for more combination technology devices like this.
March 13, 2006
New Peak Oil site with lots of goodies
found this one this morning: Peak Oil: Life After the Oil Crash. Falls much more into the conspiracy side of the equation, but has alot of good research and some practical use items as well. Focused on what individuals can do/ will have to do, to deal with the impact of peaking oil.
this graph says it all
March 10, 2006
Audi re-enters Le Mans with V12 Diesel
Audi is back with the R10 race car with a V12 diesel powerplant. Totally cool. They will win and then come to america and run on biodiesel. I can't wait to see the show. The V12 produces 650 hp.
March 9, 2006
Sign up for Initiative 937, Renewable Portfolio Standard
Here is the exact languange of I937 which is the Washington state Renewable Portfolio Standard. This is the initiative which would require the state electricity companies to provide a minimum of 15% of their electricity from renewable sources. Biodiesel burning in a diesel generator or CT turbine would qualify. This would mean a 500M gallon market for biodiesel. Awesome! Go to the campaign web site and sign up to help!
March 8, 2006
More where are your oil $$ going
Thanks JohnLu for the tip.
This one is absolutely verified true. Dubai (in the news alot lately) is also the home to the worlds largest indoor ski resort. Yes this in a country with an average tempretature outside of 120 F.
note the palm trees
UBS creates Biofuels hedge index
For investors who just want to "play the biofuels uptick", UBS has created a weighted index of feedstocks used in biofuels. Corn, Sugar, Rapeseed, Soy, etc. It is weighted by their use in biofuels today. Launched in March, Will be re-weighted every six months as the mix of feedstocks changes over time. Today about 92% of the index is linked to Ethanol feedstocks, I expect this relative weight to change in biodiesel's favor over next three years. This index is an interesting way to play the increase demand driven by biofuels, although it is not a pure play. These commodities are driven by many things other than demand for biofuels, in fact I bet biofuels usage is a single digit consumption number on all these commodities. That means that you are buying risk from food demand, weather, and all sorts of other things beyond pure biofuels demand. But this is better than nothing. uns_diapason_biofuel_index.pdf
Jubak's Journal on oil economics
Jim Jubak has been on a tear lately about Oil and the economics thereof. In this latest column: MSN Money - Oil producers reach for more power - Jubak's Journal he talks about how the oil producing countries are moving up the value chain with the largest spending spree on refineries in modern history. $89B over next 10 years. There hasn't been a new refinery built in America in over 20 years and thanks to the environmentalist I doubt there will be. It looks like America will continue it's "the Saudi's have our oil and will take care of us" strategy while paying lip service to alternatives. Read Jubak to truly understand how the macro picture is shaping up and how America is totally without a meaningful strategy.
the truth about Hybrids
I have been saying for quite some time that the reality of Hybrids does not live up to their hype. Now Consumer Reports confirms this. Over at TerraBlog from TerraPass | TerraPass: Fight global warming, promote alternative energy they did a further analysis. The premium for the hybrid drivetrain over the first five years of ownership is $3,700 to $13,300. ouch! Just buy a diesel which is less than a $1,000 premium and run biodiesel.
March 6, 2006
Climate Solutions Press relase on the RFS passing
For Immediate Release Contact: KC Golden 206 963-1953
March 6, 2006 Rich Feldman 206 441-4968
The legislative session began with Republicans and Democrats calling for new energy independence strategies. And with strong leadership from Governor Christine Gregoire and Representative Janea Holmquist (R-Moses Lake), they opened up a large new market for biofuels in Washington State.
Bi-partisan cooperation for a major new energy policy can be hard to come by. But concerns about volatile oil prices, a struggling farm economy, and global warming pollution from fossil fuels proved a potent combination. Legislators passed a major bill establishing market access for ethanol and biodiesel, and a variety of incentives for in-state fuel crops and production facilities.
These bills attracted unprecedented support from a politically diverse coalition that included farmers, organized labor, conservation groups, investors, entrepreneurs, and fuel producers and distributors. Supporters hailed it as a major victory for energy security, farming communities, good jobs, and environmental protection.
We are talking about economic development, revitalizing some of our agricultural communities, as well as cleaner air, said Representative Holmquist. This is a step in the right direction in breaking our addiction to foreign and domestic oil.
Representative Janea Holmquist was the prime sponsor in the house. Senator Marilyn Rasmussen was the prime sponsor in the senate, with leadership from Senator Eric Poulsen, chair of the Water, Energy and Environment committee.
This state has shown once again that economic prosperity, healthy communities, and conservation goals are not competitors. They are partners, said K.C. Golden, Policy Director for Climate Solutions, a regional group working to build the clean energy economy. The Legislature and the Governor have declared: Washington is open for clean energy business!
The renewable fuel standard is designed to increase biofuel use as the states capacity to grow and produce biofuels increases. It contains specific provisions for expanding the market over time as the local industry grows. The standards start at 2%, and ramps up to 5% for biodiesel and 10% for ethanol. State vehicles and vessels will use higher percentages of biodiesel.
The Washington State Apollo Alliance of Washington, supporting good jobs and energy independence, made the renewable fuel standard a priority this year. Washington State Labor Council, AFL-CIO President Rick Bender said the bill will create a stable, growing market for biofuels. Its the kind of strong, decisive, market-building policy that will get us moving toward a more secure energy future.
Washingtons environmental community made this bill one of four priorities for the session, as well. Agricultural interests are becoming increasingly focused on biofuels and renewable electricity as opportunities to diversify and strengthen Washingtons farm economy.
The time is now. The stars have aligned. There is no reason we cannot produce clean, alternative fuels, said Washington Agriculture Director Valoria Loveland, speaking to an overflow crowd in Spokane that gathered last week for the Harvesting Clean Energy conference.
Speaking at the same event, Washington Farm Bureau President Steve Appel said, We believe that biodiesel and other biofuels hold great promise for Americas energy future. And we hope to see Washingtons farmer play an important role in that future.
The renewable fuel standards will begin to take effect in 2008, after an advisory group helps the Department of Agriculture develop rules for implementation. Industry experts anticipate that the new fuel standards, one of the first in the nation, will attract substantial investment in growing biofuel feedstocks and producing the fuel.
The state has a huge potential to produce advanced biofuels, like ethanol from wheat straw, that can provide major reductions in fossil fuel use and global warming pollution in the future. Iogen, a Canadian firm, expects to be the first large producer of this fuel, called cellulosic ethanol and they see Northwest wheat straw as their feedstock-of-choice.
This new state biofuels standard makes Washington a leader in national efforts to meet the federal Energy Bill's new Renewable Fuels Standard of 7.5 billion gallons per year by 2012. State fuel standards build biofuels industries positioned to take advantage of guaranteed markets created by the federal standard, while states without such industry-building standards could be passed by in the race to grow biofuels markets.
The Northwest is positioning to become the leader in the biofuels industry. Montana already has a fuels standard. Idahos senate just passed an ethanol fuel standard. Oregons renewable fuels standard narrowly failed last year and Governor Kulongoski committed to increasing investment in biofuels in his annual state-of-the-state speech in late February. Minnesota and Hawaii are the only other states that have renewable fuels standards. Only Minnesota also calls for biodiesel in its mix.
ESSB 6508 Senate vote on Final Passage as Amended by the House3/6/2006Yeas: 29 Nays: 19 Absent: 1 Excused: 0Voting Yea: Senators Benton, Berkey, Brown, Doumit, Eide, Esser, Fairley, Finkbeiner, Franklin, Fraser, Hargrove, Jacobsen, Kastama, Keiser, Kline, Kohl-Welles, McAuliffe, Oke, Poulsen, Prentice, Pridemore, Rasmussen, Regala, Rockefeller, Schmidt, Shin, Spanel, Thibaudeau, and Weinstein. Voting Nay: Senators Benson, Brandland, Carrell, Delvin, Haugen, Hewitt, Honeyford, Johnson, McCaslin, Morton, Mulliken, Parlette, Pflug, Roach, Schoesler, Sheldon, Stevens, Swecker, and Zarelli. Absent: Senator Deccio. Excused:
No rest for the weary
Well it looks like Washington state will pass a Renewable Fuel Standard and keep it's leadership position in biofuels. But don't get lazy yet, the next thing we need to do is pass the Energy Security Initiative. This is for the electricity generation side to mandate a 15% of our electricity come from renewable sources by 2020. This will spur all sorts of economic growth (including biofuels for electricity generation!) and keep Washington on the leading edge of energy independence. I mean really, why should we be sending all that money for oil and electricity out of state?
February 7, 2006
UBS analyst digs into public market companies affected by state of the Union
Everyone is talking about the state of the union and if Bush is real in his commitment to alternative energy or not. One question I had is what public companies could be affected? UBS did a great job summarizing the proposals in the state of the union and the various affected companies. One interesting thing is that UBS doesn't cover most of them. In fact no-one does. state_of_the_union_010206.pdf
February 2, 2006
WSJ notes VC interest in Alternative Energy
Out today: WSJ.com - Alternative Fuels Attracting Venture Capital. I talked to the reporter, but didn't make the story. Oh, well, can't win them all.
January 26, 2006
Read the Fortune Ethanol article early
This will hit the news stands next week. Lots about Ethanol and the unlikely cooalition around promoting this home grown fuel which is already at some scale. There are mentions of Biodiesel as well. My feeling is that all this attention to Ethanol is GREAT for Biodiesel which will grow faster behind the path blazed by Ethanol. And by the way you don't need a new vehicle to run 100% biodiesel. You do to run 85% ethanol.
January 19, 2006
The Soy Genome to be decoded
This is very cool, Environment News Service ENS Latest Environmental Information Education Current Issues RSS is reporting on a joint DOE and USDA effort to decode the Soy bean genome. The second largest crop in America at $17B and 75 million acres, soy is also the prime feedstock for biodiesel today. This basic genome research could lead to new variants of soy optimized for oil production. They need to do something because soy is a fairly ineffecient crop at producing oil today.
January 8, 2006
Audio of Robert Hirsch Peak Oil report
here: Hirsch.20051117.mp3 is a link to Hirsch talking about his report. Again the focus of the report is on how to mitigate the affects of peak oil. The problem is really one of risk management. America has been terrible at taking action before the crisis hits. Hirsch tries to pose the problem, simplify it and analyze the impact. One key conclusion, we CANNOT conserve our way out of this.
Robert Hirsch on Peak Oil
The Hirsch Report was published last year which is probably the most comprehensive summary of the issue I have seen. All major analysts opinions are summarized. A truly shocking chart shows that we reached peak oil (that is oil extraction stopped growing and started declining) in the lower 48 states around 1972. This is not fiction. Every oil producing region reaches it at some point or another. Here is another tidbit: It will take 15 years given normal replacement cycles to replace half the cars on the US roads. So changing the automobile fleet (hybrids) is a VERY long process that won't have any noticable year to year impact and is NOT the way to respond to any kind of crisis. But changing your FUEL in those vehicles is. I love biodiesel.
December 21, 2005
What incentives for alternative fuels are available?
the Department of Energy has a handy dandy table: Incentives & Laws: State Summary. Just click on your state and which alternative fuel you are interested in and see all the incentives for its use. Very handy.
December 15, 2005
Movie Review Syriana
The film I have anticipated the most this year is Syriana. I saw it this weekend and wasn't disappointed. Sleeping with the Devil by Robert Baer is one of the formative books on my thinking about energy and the volatility of Mid East politics. Clooney plays a character roughly modeled on Baer. In fact Baer spent two weeks with Clooney taking him through the "real" mid east meeting drug dealers, arms dealers, princes and kings. The director of Traffic did the movie, so it has that slow sort of haunting pace to it which may not appeal to traditional Hollywood audiences, but in this case works perfectly. The writing is great, the scenery is amazing, the story is compelling and important. Basically everyone should see this movie immediately. I give it a 5 of 5 stars.
December 6, 2005
Prius is mostly emotion, not facts
Good read in WSJ today. Basically the $9,500 premium for the hybrid synergy drive would take 10 years at $5 gas to pay back. When I see Prius I see "sucker". You can achive the same or better mileage with a diesel like the VW Jetta and use a 100% renewable fuel. Remember with the Prius, you are still burning dinos...
By HOLMAN W. JENKINS, JR. Dear Valued Hybrid Customer...November 30, 2005; Page A19
We at the Toyota Motor Corporation are writing to address certain misconceptions that have arisen about your Toyota Prius model, which we are proud to note is driven by many celebrities, including Prince Charles and HBO's Larry David.
Our pioneering gasoline-electric hybrid, introduced in 1999, has become an object of adoration to the world's enlightened car buyers. Our competitors, including America's Big Three, are rushing out hybrid vehicles of their own. Unconfirmed media reports say that we at Toyota intend to double our hybrid output to 500,000 vehicles next year. Along with other members of the auto industry, we will be lobbying for tax breaks and HOV privileges for hybrid vehicles.
However, any romance entering its seventh year tends to go stale. Some purchasers have begun to question the practical value of our Hybrid Synergy Drive technology. You may be aware that a survey by Consumer Reports found that our vehicles achieve considerably less mileage (some 26% less) than the sticker rating implies. This has led to some unflattering media stories.
Let us assure you that the Prius remains one of the most fuel-efficient cars on the road. Toyota applauds your willingness to spend $9,500 over the price of any comparable vehicle for the privilege of saving, at current gasoline prices, approximately $580 a year.
And should the price of gasoline rise to $5, after 10 years and/or 130,000 miles of driving, you might even come close to breaking even on your investment in hybrid technology.
We recognize that our customers have an "emotional" relationship with their vehicles. This transcends even the regrettable truth that driving a fuel-efficient car does not yield any substantial benefits for society if it doesn't save the owner money.
Contrary to any loose statements made by our marketing partners in the environmental community and media, petroleum not consumed by Prius owners is not "saved." It does not remain in the ground. It is consumed by someone else. Greenhouse pollutants are released. Also, please note that the warranty and owner's manual say nothing about reducing America's dependence on foreign oil. This is not an oversight. The Prius is an "oil-dependent" vehicle. It runs on gasoline, supplied by the same world market that fuels other vehicles.
The Toyota Corporation regrets any misunderstanding our marketing may inadvertently have caused (or may cause in the future).
We share your belief that the days of the internal combustion engine are numbered. Further research by our economists suggests this will happen when the price of gasoline rises high enough to make alternative technologies cheaper than gasoline-powered cars.
We at Toyota want you to know we recognize this effect and have taken steps to compensate with the rest of our vehicle lineup.
Our 2006 Tundra pickup will be equipped with Toyota's new eight-cylinder engine, making it every bit as much of a gas guzzler as any American pickup. We are also redirecting our efforts to use our Hybrid Synergy Drive to increase power output rather than reduce gasoline consumption.
Take our new hybrid SUV, which produces 38 more horsepower but gets the same mileage as our conventional version. A New York Times reviewer wrote, "One question lingers after driving the 2006 Lexus RX400h: How did it come to this, that Toyota is now selling a hybrid gas-electric vehicle with no tangible fuel economy benefits?"
We hope this corrects any misimpression caused by our latest slogan ("Commute with Nature"). Hybrid technology is not "green" technology. Like heated seats or flashy exterior trim, it's merely an expensive option that generates large markups for the Toyota Corporation and its dealers.
You will share our pride in the latest figures from J.D. Power & Associates, which show that the Prius continues to move off a dealer's lot in just eight days, compared to 36 days for a Honda Civic hybrid. Clearly, our customers are willing to pay handsomely for the privilege of showing themselves behind the wheel of so conspicuously virtuous a vehicle.
But we are also a far-seeing corporation. We recognize that the Prius's distinctiveness may be a wasting asset for reasons outlined in this letter. Other motorists may see the Prius operator and think "sucker." Our lawyers advise us this may affect your car's resale value. Toyota regrets any inconvenience.
We want you to know that Toyota remains committed to advancing hybrid technology just as long as our customers are willing to make it worth our while. Our esteemed competitor, Nissan's Carlos Ghosn, was recently quoted saying, "There's such a buzz today that no CEO of a car manufacturer dares to say his real opinion of hybrid because he's accused of being retarded."
Another esteemed competitor, GM, has suggested that hybrid technology is best deployed in city buses, where large fuel consumption and stop-and-go driving might actually make it economically sensible.
These are just two examples of the short-sighted, stick-in-the-mud marketing instincts of our fellow automakers that are helping to make Toyota the largest car company in the world.
Yours Truly, the Toyota Corporation.
December 2, 2005
Northwest Watch oil counter
Want to watch your $$ leave the Northwest to pay for foreign oil in real time? Cascadia Scorecard energy counter. It will be over $6B this year for Washington alone. Over $30M each day for Oregon, Washington and Idaho. Ouch
November 30, 2005
BP forms Alternative Energy group
Looks like they are actually getting serious about alternative energy. BP Global - Press - BP Forms BP Alternative Energy. Their definition is Solar, wind, hydrogen and CCGT power generation. No threat to their oil business. Good to see an oil company put some wood behind their PR machine anyway.
November 28, 2005
The beginners guides to all things flight related
Ah, tax dollars at work. Related to the last post, I found the NASA Glenn Research Center: Beginner's Guide to Aeronautics. Ever wanted to know who a plane or rocket flies? This is the site for you. I just spent three hours there. Wish I had had this when I was a kid and doing model rockets! There is apparently more to it than just larger engines.
Thinking Brayton Cycle engines
have been thinking about how jet engines work lately and came across a VERY helpful and explanatory site maintained by Nasa: Turbine Engine Thermodynamic Cycle - Brayton Cycle. Still makes the head hurt a little with all the talk of the first law of thermodynamics, entropy, isentropic compression cycles, etc. but thankfully most terms are hyperlinked to further explanations. Basically all jet engines are Brayton cycle engines. They can be more or less effecient based on how close they get to the ideal state.
November 23, 2005
Oops, even I get caught by web hoaxes sometimes
Thanks to a sharp reader who pointed me to: The Palace of Sheikh Zayed bin Sultan Al Nahyan. Apparently the slide show showing the Palace is not actually the guys house and he doesn't have 20 wives. But I am SURE he has more money than 99% of Americans who are paying today's gas prices. Mea Culpa, I will do more verification next time.
November 20, 2005
Brazil is ruling the Ethanol markets, watch out
Here is a recently translated article from Exame, Brazil's equivalent of Business Week. 2005-06-22, Exame 845, 'New cycle for sugar cane'. Basically Brazil can produce Ethanol today for half the cost of the US. And a third the cost of Europe. America's Ethanol industry is protected and the politics are all tied up in sugar, etc. If we didn't have those protections, Americans today could be driving ethanol cars and buying fuel for less than the cost of petroleum gas TODAY. This is one area in which the government protection is NOT helping consumers or our national security.
first biooil cogeneration project in Canada
This is not biodiesel, but BioOil which is produced by carbon cracking of garbage, wood waste, etc. LivePowerNews - your source for electric power industry news. Very interesting that there is enough power to heat the plant and power 2500 homes.
November 19, 2005
Fuel Independence by 2015 bill introduced in congress
By Congressman Jack Kingston posted at || RedState.org with a long thread following. Who says Republicans don't care about fuel independence?
November 17, 2005
Renewable Energy 2005 world wide report
IF you have a long plane ride print it out: ren21-2.pdf (application/pdf Object). If not just print the two page executive summary.
November 16, 2005
Where do our Oil $$ go?
Watch this slide show. You will see what $3 gas goes to buy. gas prices
I am not a scientist. I am a fan of fiction. I sometimes read Michael Crichton, but tend to find him way too Hollywood for me. So it seems is his new book "State of Fear" that basically says global warming is not a problem. Thankfully there are thoughtful people: RealClimate � Michael Crichton’s State of Confusion L’�tat de confusion de Michael Crichton who have deconstructed the book. I am quite frustrated when popular media treats science in such a lighthanded way. The real problem is that most people reading Crichton for entertainment won't bother to think past the bad science in the book and will take the conclusion as "science". I am not going to bother with the book.
November 14, 2005
STM made Newsweek also
A sister company to Seattle Biodiesel in that Nth Power has also invested is STM Power, makers of sterling engines. They made the Newsweek story also: Ten Eco-Friendly Companies - Next Frontiers - MSNBC.com. They have run our biodiesel and glycerine in their engines and it burns well. Go STM.
November 11, 2005
PBS NOW exposes Big Oil tonight
PBS Exposes Big Oil Tonight
October 31, 2005
Bipartisan support for Ethanol mandate
Here is a crazy idea. Instead of mandating increased CAFE standards (more mileage), trade that for a 100% flex fuel vehicle fleet. Then consumers can have the choice to choose cleaner fuels like Ethanol and Biodiesel. This path is WAY faster than hybrids or hydrogen. The idea seems to be getting traction.
Bipartisan Support May Form Around Radical Ethanol Use Plan
Strong bipartisan support may form in Congress around a radical new plan by a nationally renowned entrepreneur calling for a sharp increase in ethanol usage beyond the new energy law mandate -- a plan that touts significant energy independence in 3-5 years by moving national ethanol usage from the current 3 percent mandate in the new energy law to a whopping 50 percent or more. The massive ramp-up in ethanol use would be spurred by new tax credits, import duty waivers and a new mandate that all cars be flexible fueled vehicles (FFVs, which run on both gasoline and biofuels).
The proposal has attracted significant attention among energy experts and a surprisingly wide breadth of interests in Washington, ranging from House Minority Leader Nancy Pelosi (D-CA) to defense-minded neoconservatives. Sources say a new bipartisan House oil and national security caucus will soon be briefed on the plans ability to create jobs and achieve environmental benefits. Moreover, FFVs are quickly gaining strong support from the Big Three in Detroit as a near-term alternative fuel option and from some environmentalists who see an ethanol-dominant fuel as a way to control carbon emissions. Such an approach would also attract the strongest of support from the powerful farm lobby, which has been arguing for more ethanol use for decades.
At an Oct. 18 session on renewable energy for transportation at the American Council On Renewable Energy (ACORE) conference dealing with policies to promote renewable energy, entrepreneur Vinod Khosla, founding CEO of Sun Microsystems, presented a proposal for rapidly and cheaply weaning the United States from Middle East oil and developing the nations biofuels industry, a plan that he says could radically transform U.S. transportation fuels within 3-5 years.
Khoslas proposal calls for U.S. automakers to trade a 100 percent FFV mandate for new cars in exchange for relief from pressure to raise the Corporate Average Fuel Economy. It also calls for no tax on imported ethanol, a transfer of agriculture subsidies from row crops to energy crops and for significant tax credit and debt guarantees for new cellulosic ethanol production technologies.
At the request of Democratic leader Pelosi, Khosla presented his proposal to interested lawmakers the same afternoon after he made his ACORE presentation. Following that presentation, ACORE asked Khosla and other panelists to develop a white paper based on the Khosla presentation and related presentations on biofuels.
In addition, at a conference luncheon Rep. Eliot Engel (D-NY), co-chair of the new oil and national security caucus along with Rep. James Saxton (R-NJ), said that a traditional coastal opposition existed toward ethanol proposals because they were seen as a boon to agricultural states. But, Engel said, everythings on the table as the new caucus looks for solutions to energy security issues. He said he would keep an open mind toward Khoslas proposal if and when Congress crafts a legislative proposal for an appropriate new national energy direction that includes provisions such as the FFV-ethanol plan.
According to Khosla, a transformation of the U.S. transportation fuel sector could be achieved using existing car technology and oil distribution systems. The key to such a transformation is ethanol. Dominant use of ethanol as a transportation fuel has already been successfully adopted in Brazil and is therefore a proven model, according to Khosla. Furthermore, ethanol is already part of the fuel market through blending requirements, which could be dramatically expanded by adding E-85, a mix of 85 percent ethanol.
We dont need oil, hydrogen, or a new distribution system, Khosla told the ACORE audience of energy experts, former and present federal officials and congressional staff. It is very practical, he said, noting that he was not interested in incremental fixes to the energy issues he is trying to deal with.
Citing a new agricultural community initiative -- 25X25 -- to achieve 25 percent conversion of the U.S. fuel supply to biomass by 2025, Khosla said it was too conservative a goal and that we can replace the majority of petroleum fuel with biofuels by 2025. Already, some 4 million FFVs are on the road, even though most Americans do not know this, Khosla said. The sharp increase in capital investment in ethanol production that has already occurred is a fact that supports his proposal, he argued, noting that high oil prices are accommodating startup costs.
Khosla also addressed the politics of an ethanol mandate. According to his analysis, U.S. automakers would have to invest less than would be needed to convert to a hydrogen economy. Moreover, ethanol is compatible with hybrids. Agricultural interests would receive more income and face less pressure in the World Trade Organization and the Doha Round of trade talks for reduced agricultural subsidies. Environmental groups would see faster conversion to renewable energy, with less risk. And even major oil companies would be equipped to build or own ethanol factories and distribution infrastructure and would benefit from diversification.
October 16, 2005
More good reading on peak oil
Ok, so this guy: Peak Oil: Life After the Oil Crash has a book to sell, but the page also has the best collection of links related to all aspects of Peak Oil that I have come across. Very well referenced for those who love to click.
The key here, that he makes in well referenced detail, is that demand for oil is growing faster than our ability to produce. In fact our ability to produce is probably going to decline by 3% per year while demand increases at 2% per year (Dick Cheney himself said that).
It looks like we are heading for Peak Oil without any of our political leaders having a "plan B". The most recent DOE report on the subject says:
Without timely mitigation, world supply/demand balance will
be achieved through massive demand destruction
(shortages), accompanied by huge oil price increases, both
of which would create a long period of significant economic
Waiting until world conventional oil production peaks before
initiating crash program mitigation leaves the world with a
significant liquid fuel deficit for two decades or longer.
October 3, 2005
What exactly is "Peak Oil"?
One of the few good articles from NYT lately: t r u t h o u t - Peter Maass | The Breaking Point. Here is an excerpt:
The reference to "peaking" is not a haphazard word choice - "peaking" is a term used in oil geology to define the critical point at which reservoirs can no longer produce increasing amounts of oil. (This tends to happen when reservoirs are about half-empty.) "Peak oil" is the point at which maximum production is reached; afterward, no matter how many wells are drilled in a country, production begins to decline. Saudi Arabia and other OPEC members may have enough oil to last for generations, but that is no longer the issue. The eventual and painful shift to different sources of energy - the start of the post-oil age - does not begin when the last drop of oil is sucked from under the Arabian desert. It begins when producers are unable to continue increasing their output to meet rising demand. Crunch time comes long before the last drop.
"The world has never faced a problem like this," the report for the Energy Department concluded. "Without massive mitigation more than a decade before the fact, the problem will be pervasive and will not be temporary. Previous energy transitions (wood to coal and coal to oil) were gradual and evolutionary; oil peaking will be abrupt and revolutionary."
So I learned something. In the last 10 years with all the oil profits oil companies have been madly exploring. No significant new fields have been found. OPEC has overstated their reserves for short-term quota benefits. Saudi Arabia won't tell the truth. When the peak is reached, the only way is down. Is 84M barrels a day peak? We won't know. I bet it is VERY close. The problem is how fast can you pump it out? New sources (tar sands in Canada) will take too long to get out. We need to find alternatives now.
October 1, 2005
California's plan for reducing petroleum dependency
Way back in 2003 California published a report on how to do it: Petroleum Dependence (AB 2076) Documents Page. Now yesterday the legislature passed a bill (AB 1007) directing the self same agency to develop an actual plan of implementation. Good to see them moving, but at this pace, nothing will happen till 2020!
September 30, 2005
Another thread launched
I have been swamped lately with people asking "why did you leave technology and go to energy?" Well I wrote a lengthly piece on it for SNS at Mark's request. It seems that other smart people are going through a similar conversion, so I have split off this thread into a separate blog: From Bits to Barrels.
I expect to post infrequently, but have alot of guest entries from others in the technology, software and internet world with their thoughts around our energy policy and what should be done. This should be a fun thread to follow.
August 31, 2005
Leading gas price analyst weigh in - $4 gas soon and maybe for awhile
The lead alalyst for OPIS, the definitive wholesale/retail price source for fuel prices says today: Pricing experts says $4 a gallon gas on the horizon - Aug. 31, 2005. Mostly due to Katrina as I had been predicting. While it spikes to $4, it stays around $3.50 for 4-6 months! At those levels you will be able to see the impact on GDP. We are in for a bumpy ride. Here is more:
In a research note, Behravesh laid out a worst-case scenario that puts average prices for regular unleaded gasoline at about $3.50 a gallon for the next four to six months.
"The impact on consumer spending in such a scenario would be very dramatic, cutting the growth rate by as much as 3 percent and pushing real GDP growth in the fourth quarter closer to zero," he wrote.
August 30, 2005
some fun with oil numbers
Check out the latest crude oil supply/demand numbers. Supply 84.12 MBpd/ Demand 84.38 MBpd. Yes you read this right demand is AHEAD of supply by 260 million odd barrels.
Here is some other math. US produces roughly 12 MB per day of crude. 35% of that out of the Gulf. 92% of the oil platforms in the Gulf were shut down and remain shut down by Katrina. That is over 3.8 MB per day out of production. It will be a week or so until we know how many of those platforms will get back into production, although the big oil guys were preaching calm today (see below).
Oil companies on Tuesday rushed teams to the Gulf of Mexico to assess the damage the hurricane may have caused to their rigs, platforms and refineries.
Royal Dutch Shell said an aerial inspection of its Mars platform showed some damage to its upper deck.
BP said initial indications showed that the hurricane caused little damage to its operations, including its massive $1 billion Thunder Horse platform.
Kerr McGee (up $1.67 to $87.16, Research) resumed oil and natural gas production in the western gulf after its facilities survived the brunt of the storm, a company official said.
Apache (up $0.97 to $70.70, Research) said it hoped to resume operations at some platforms by the end of the day if pipelines were not damaged.
The Louisiana Offshore Oil Port said initial damage reports were encouraging and hoped to begin crude shipments on Thursday.
Marathon Oil (up $1.87 to $61.96, Research) said early assessments showed no damage to some offshore operations and the 245,000 bpd Garyville, La., refinery.
OPEC's biggest crude oil producer, Saudi Arabia, pledged an extra 1.5 million bpd of oil to the market if needed, while the United States announced it would dip into its strategic reserves if necessary.
GM and Toyota in Smackdown on future drivetrains
GM says Diesel, Toyota says (surprise) Hybrids. RED HERRING | Diesels May Challenge Hybrids In the middle of the article you find that they actually agree. The Toyota guy says that over 8,500 lbs, diesel will rule. That means most SUVS which make up the majority of the market and GM's line today and in the future. What I think is the killer in the light duty is a diesel hybrid. Diesel has 12% more energy than gasoline and diesel engines get 30% better mileage. Why not have them be the powertrian to a hybrid?
August 29, 2005
Energy Venture Fair VI Boston
Is November 2/3 a the Hilton Boston Back Bay: Energy Venture Fair VI. I will be presenting Seattle BioFuels there along with 80 other energy related venture backed companies. If you are interested in energy venture, this looks like the event to be at.
chemical process modeling software WOW
At Seattle Biodiesel, one of the challenges we have is trying to figure out what will happen to the quality of the end product when you change one variable in the production process. Good old trial and error is one way to find out, but it can be very painful. Now with: Stat-Ease, Inc., Design of Experiments (DOE) specialists. I can model my process and the effects of changing variables. What more could a software guy turned biodiesel manufacturer want?
August 24, 2005
Review of Northwest Energy Technology Collaborative conference
Went to this conference yesterday in Portland. Put on by the Northwest Energy Technology Collaborative, good bunch of guys headed by Jeff Morris. The morning was split into a business track with fairly mature companies and an academic track talking about stuff in the lab. I went to the lab geek session since I had seen most of the more mature companies. The afternoon was dedicated to venture stage companies which I will review in detail in a moment. From the academic track, unfortunately there was nothing ready for commercialization within the next two years, so I won't bother to geek out on that stuff. Just a few comments on the later stage companies:
1. ADI Thermal Power out of Woodenville, WA is creating a sterling engine that they hope will achieve 50% effeciency. They are currently at 40% on their Alpha unit and hope to get it to 45% by field Beta in January. Currently running only on Hydrogen and Propane, no liquid fuels. Interesting, but far behind STM power.
2. Carmanah Technologies, Inc. Solar powered LED lighting products. Great combination of highly efficient LEDs and today's solar collection technologies. They have things like outdoor lights, flashers, etc. that you want to put somewhere and have self powered. I like the use of LEDs. I don't see anything proprietary.
3. Novus Power Corp. These guys have invented a new design for an electric motor that uses 1/4 the electricity to produce same amount of torque at any size. Very cool technology. Very smart guys. I am no mechanical engineer, so I couldn't make a technical analysis as to how good their invention is at all. The real issue is how do you sell a new engine design into a market that hasn't had a fundamental technology change in 100 years. You have to get OEM design wins into existing products. Products with warranties and lots of historical experience with other designs. The energy savings along are probably not enough to get you wins. You have to figure out which niches just CAN'T LIVE WITHOUT your power savings. I have no idea those are. I hope they do.
4. Prometheus Energy Company. They have a small scale production facility to extract LNG from landfills, stranded gas wells, anaerobic digesters and coal mines. The key to their business is putting the LNG manufacturing closer to the consumption (basically LA) and save transportation and reforming (from CNG) costs. The numbers work. Unfortunately the market is small and the sales time is VERY long.
Now on to the fun stuff. The Venture Companies.
1. Microstaq. I LOVE this one. They basically have a silicon flow control valve that is about 1/20 the size of the mechanical flow control valve it replaces. A picture says a 1000 words and I wish I had the one from their presentation with the old valve and the new one next to each other. My friends at Yaletown are in the deal and my old friend Russ Aldrich just became interim CEO. This is part of the overall solid-state-ization of the automobile. Look under your hood. There are hundreds if not thousands of analogue old mechanical things in there. Most everything outside the core engine itself could be made solid state and out of silicone with enough thought. There are already large locomotives and dump trucks with solid state drive trains. Their first target market is to replace the mechanical flow control valve in an air condition pump with an electronically controlled one, a $750M market. You get 4mpg better, save weight and have finer grain control. The issue is the long sales cycle. But fortunatley these guys came out of the auto parts industry and have the right contacts. I like it.
2. Columbia Energy partners. This was more a project finance, Real estate limited partnership pitch than a venture pitch. They are basically small scale (<10MW) wind developers taking advantage of the standardized interconnect contracts and requirements for utilities to buy power from these facilities. They basically need $1.5M in equity up front to put in a 5MW deal. These equity investors are really treated like loans and get a projected 12% IRR over a 20 year life. Basically they should be marketing this in $50K chunks to doctors and lawyers not to VCs. There is no invention here.
3. Sieber Energy Inc. Yet another wave energy company. But this one has an interesting technology twist. They basically put bobbers on plungers out in the ocean. As these go up and down they create compressed air, just like when you pump a bicycle pump. This compressed air is delivered by a LONG hose to the shore. There you can run anything pneumatic from an electricity generator to a nail gun. Their technology works in prototype lab scale at the university and they want to commercialize it. Too much of a wild ass swing for me, but intellectualy interesting. Will take ALOT of capital to commercialize.
4. Novinium. These guys have figured out a way to increase the lifespan of medium voltage electricity grid cables. The WW industry spends about $350M a year replacing cables they say. Inject their gunk into your cables and get another 40 years (good as new) they say. Their goo is second generation goo. The first generation was developed by the same team and is now sold by the leader in the field with about $60M in revenues. Looks like an interesting niche technology with a long sales cycle to me. Not great for venture sized returns.
Comments always welcome.
Mercedes MS 320 CDI beats Lexus Rx400Hybrid
I have been saying all along that the hybrid numbers are funny. They are based on flat track driving. Not real world driving. When you add hills, the mileage goes WAY down because you are dragging around an extra motor and battery pack. This recent cross country test: Green Car Congress: Diesel Bests Hybrid in Cross-Country Fuel Consumption Test shows that a diesel SUV was 10% better mileage than the hybrid. Further proof of my assumption that in heavier vehicles the diesel, especially biodiesel, will be MUCH better than a hybrid. Go Mercedes!
August 23, 2005
Seattle leading the way in climate change
I noted earlier that Seattle Mayor Greg Nickels has been leading the way trying to get individual municipalities to meet or exceed the Kyoto protocols. I just found the exact text of the agreement: Seattle Mayor Nickels - US Mayors Climate Protection Agreement. Very interesting that it is framed in an economic development language. Basically, hey guys this is good for our long-term economic survival. That is great. Now 141 countries have ratified Kyoto and at least 10 cities (more signing on as we speak apparently). This is great local support for something the feds have been failing at.
August 18, 2005
Another business group formed to reduce our dependence on oil
When the business people start saying we need to do it and it is just not the hippies, there is really something going on. Securing America's Future Energy Go to the site and watch the videos of the scenario simulation. Remember, just a couple million barrels a day out of the world oil production and we have well over $100/barrel oil and well over $4 gas. The way things are going, we may bet there even without major production disruptions.
August 15, 2005
OPEC establishing an "R&D" facility to combat "alternative fuels"
Humm, finally OPEC figures it should do some research to improve it's product. I can't wait to see what they come up with (lol) World Tribune.com -- OPEC sees threat from 'alternative energy'
August 5, 2005
Major media not covering foiled terror plots
Debkafile has done a good job on reporting ALL terrorist threats and activities. Recently, they have pointed out foiled attacks in Jordan DEBKAfile - that would have been "Zarqawi's crowing venture". Why do you think the major media only covers the "successful" killing of Americans and Iraqi's? There are hundreds of attempted plots that have been foiled. This is the positive side of our war on terror, yet it never gets covered. We are winning, no-one should believe otherwise. In Iraq, we are fighting a disenfranchised minority (mostly foreign) bent on regaining dominance over the population. It is not a popular uprising. They kill 10x the number of Iraqis for each American. And we should just leave them to it?
August 2, 2005
Newsweek story on Biofuels a week early
This will be published next week: The Next Petroleum - Newsweek: International Editions - MSNBC.com. Basically you can aready buy Ethanol for half the cost of unleaded in Brazil. They are selling it for $25 per barrel and making money and exporting it. So much so that Americans have a tarrif on it to protect domestic ethanol producers. Biodiesel is just getting started, but VW is committed to it because "you don't have to reinvent the car". Exactly.
August 1, 2005
King Fahd is (officially) dead
Even though some outlets were calling him dead as long ago as May 27, apparently the royal family decided to make it official today. There has been lots of
good coverage of the details and good background on the issues surrounding the rot in the royal family. I am completely stunned (even though I shouldn't be) by the main stream media's lack of analysis on this. Basically CNN and all the networks just reported the press release details (Fahd dead, Abdullah named king) and looked in the rear view mirror on how it affected the oil markets. The guy who has thought very deeply about is is Robert Baer and his concerns are not addressed anywhere in the media coverage. Abdullah is a reformer who has done some changes around the edges but now that he is king, will he press ahead full steam to reform the royal family's prince system and corruption? If so, there will be bumps and lots of fighting as their old lavish way of life goes away. And what about Abdul Aziz, Fahd's slow but tenatious Wahhabi pandering son who gave $100M to the Taliban? We are in for a rough ride. And remember, Abdullah is only two years younger that Fahd, he is 80! Who is next?
At a time when any slight disruption in our oil supply would cause shock waves, to blithely accept the Saudi's assurances of "no change in policy" is stupid. Even with no change, the supply/demand equation has not fundamentally changed. The political risk has actually increased and the motivation for terrorists to strike at a time of "weakness" is heightened. I am betting on $70 oil within two months.
July 20, 2005
Bomb factory found in Saudi Arabia
The first chapter of Sleeping with the Devil is probably the most frightening thing I have read in the last five years. The former head of the CIA in the mid east basically lays out how with less resources and planning than it took to pull off the 911 attack, terrorist could cripple the Saudi oil production capacity for a decade. It looks like the terrorist can read: U.S. warns of Saudi attacks, bomb factory found - Yahoo! News. Put this together with the recent analysis that loosing 3 million barrels a day production (we would loose WAY more than that in a Saudi attack) would mean $150 a barrel oil and $5 a gallon gas, and you have disaster not waiting to happen, but possibly averted. This time. It is only a matter of time though. Still think we can just negotiate with those who plan these sorts of things? Still think just leaving Iraq will keep the wackos in Saudi Arabia from blowing up their own oil fields?
July 19, 2005
My new Tee-shirt
Just ordered it from RedHandMedia
They are back-ordered, so get your order in now!
July 18, 2005
Solar at a tipping point?
Well this thread below from SNS seems to point to one. In 2004 the industry grew 62%. And the cost of PV is only 2-5x per KWH than the grid. Andrew at Intel seems to suggest that the hardware doesn't need much more improvement, it is really the rest of the value chain. I wonder. I do like Mark's comments that a tree is more efficient than the best invention of man so far. Maybe because we are using the wrong tools? solar is only tipping due to subsidies (not that it's bad).
With appropriate disclaimers here (we're not in the photovoltaic (PV) business here at Intel); my knowledge in this space comes from extracurricular activity.
As recently as 1980, for residential consumers, PV cost per kWh was in the area of 20+ times more expensive than buying electricity from the local utility. It was mostly an interesting niche technology for some small off-grid applications with battery backup. Twenty five years later, the cost is 2 5 times more expensive than electricity purchased from the public utility (the multiplier depends on where you live, both for the cost of utility power, and for the cost/kwh of your solar array, given your particular sun conditions).
Most applications today are grid-tied systems which, if power is not consumed locally, it is sold to the utility (by turning your meter backward or net-metering), essentially turning the utility into your storage facility. When the sun is not shining, or your demand exceeds your PV arrays' capacity, you can draw power from the utility, running your meter forwards again. More than 75% of installations today are configured this way. Batteries are expensive and tend to require replacement periodically.
Every doubling of industry capacity sees a 20% decline of PV costs. Average utility electricity pricing is increasing 5% per year.
Virtually all new utility generating facilities that have been added to the US grid to meet demand during peak loads in the last decade have been gas-fired peaker plants. These are easy to bring on line, and I believe of relatively low capital costs, but their fuel is expensive and increasingly scarce. Our ability to meet our own natural gas demands via North American generated sources is at an end. (SNS readers may have noted the Bush administration's desire to build LNG ports to allow water-based transport of natural gas which will be required to meet forecasted US demand in the coming years.) So these peaker plants will become increasingly costly to operate.
Partially because of this peak generation cost picture, utilities are increasingly offering rate plans that allow you to pay for your electricity at the rate associated with its cost of production, then as a consumer you can have control over how you consume electricity: If it will cost you 2 to 3 times more to run your refrigerator in the afternoon hours, perhaps you will choose to set a timer that shuts it off between 1 and 4 when no-one is home anyway.
When is peak demand? Generally, it's during the summer months in the afternoon when people are turning on their air conditioners; exactly at the time when solar is generating power for the grid. So as a PV system owner, you're offsetting the most expensive electricity in the day. Indeed, you'll be selling excess electricity at the highest rate possible.
Now, as for Moore's Law: the number of microcomponents that can be placed in an integrated circuit at a given cost will double every 18 months. Why doesn't PV follow this rule? Quite simply, there are no microcomponents. Most of PV today is based on Si, but this is where the similarity between it and the microelectronics industry ends.
Silicon has a really neat property that when you shine light on it, it wants to convert that light to direct current. Yes, you need to give it some help, create a p-n junction and then enable electrons to flow in a circuit by applying metal fingers to the surface of the solar cell. But that's it. There's nothing to shrink. A cell = a wafer. In conditions most of us are familiar with (i.e. not in the middle of the Sahara), sunlight intensity is about 800 Watts/square meter. PV technologies convert some of this light energy into electric current. How well they do that is described as their conversion efficiency, which currently ranges in production from 5% to 25% with 12-15% most prevalent.
In other words, at present, the best you can hope to achieve is 200 Watts/square meter at peak sun, with most solar panels today getting 96-120 W/sq. meter. A six inch wafer will generate around 3 Watts. You need to lay a bunch of these side by side to get meaningful numbers. (Shrinking the size of the cell will limit its capability to generate electricity, unless you use a concentrator to focus the sunlight from a greater area onto your smaller cell. Doing so will add the cost of the concentrator, and largely any Si savings is offset by the additional costs.) PV cost is a tradeoff of installed cost against conversion efficiency with the goal of optimizing cost/kilowatt hour produced.
So PV doesn't follow Moore's Law. Still, it's reasonable to ask why costs have not come down faster? My opinion: R&D Money. Until now, it just has not been there. Traditional energy companies are not interested in displacing the cash cow (yes some do play here, but as a % of their business it's irrelevant). Government investment (at least in the US) is laughable when compared to the other energy investments being made (Yucca mountain for one - there's a nice subsidy). And then there's how PV has grown up: It was an academic exercise first, then an environmental movement. On balance, it's never been driven by business interests with PROFIT as the driving force. Yes, some companies did (and do) play, but because of the cost disadvantage, they couldn't do it alone, so they went elsewhere and it has remained a boutique technology.
In 2004 this industry was $7B. From the prior year it grew in units shipped at 62%. Every bucket in the industry value chain was profitable: Si raw materials suppliers, solar cell manufacturers, solar panel manufacturers, DC/AC power inverter companies, system integrators and installers. On average, companies in every segment saw operating profit. Yes, some of this was due to subsidy, some due to the creation of green credits, but the growth speaks for itself and subsidy will soon be irrelevant.
In my view, a careful look at this value chain, thinking about the PV as a system, rather than a bunch of parts to be integrated by a 3rd party, should yield lots of opportunity to drive costs out. The day you cross-over with current utility peak electricity, it's a new ballgame. The day you can invest in electricity that costs the same as the utility charges you today and yet know that the cost of your PV electricity will be fixed for 30 years regardless of what happens to the costs of the underlying fossil fuels -- well, let's just say interesting things [will] happen.
At that point, the PV industry does not need drop PV system prices any lower. Any cost improvements from that point forward (for a LONG time) drop straight to the bottom line.
And the day you get there, is also the day the utilities decide it's economically preferable to build their own solar farms. And boom, Giga Watt PV factories (with their economies of scale) have real economic return.
Andrew B. Wilson
Your letter raised a couple of questions in my mind.
First, I wonder what we can do to get raw silicon power conversion rates higher? It seems to me that a leaf does better. Can we process an organic substrate that would be a 10x improvement? I suspect we can. Why don't we start a company called FakeLeaves, and do it?
Second, nature itself is the Great Systems Integrator. If what you're saying here is true, why not use the sun to produce, say, molecular hydrogen, or ATP (what leaves produce today). I wonder if anyone has considered why ATP (adenosine tri-phosphate) is nature's choice for a power currency, and whether we should give it a look as a society?
When we line up these huge fields of low-efficiency conversion units, battling against oil subsidies and other non-economic players, don't you think someone is going to step up and ask, How about a tree?
Thank you for a great review of our current status.
It's offical, VC AND CEO...
Regular readers have noticed my recent turn to alternative energy. It has gone much further than investing interest. I have drunk so much of the kool-aide that I have decided to leave the cushy confines of Venture Capital and head back into operations as CEO of Seattle Biodiesel. The Seattle Times did a good story about it today: The Seattle Times: Business & Technology: The future of fuel: It smells like popcorn. I will maintain my involvement with Ignition Partners as a Veture Partner on the boards of companies I have already invested in and when doing new technology deals.
I really believe that alternative energy has suffered from a lack of investment and real innovation. Hopefully in some small way, I can help with that by building the biodiesel industry.
July 11, 2005
Kudos for Senate for passing energy bill
Energy Bill news. The Senate Energy Bill was approved 85-12 by the Senate and it currently moving to a House-Senate conference that aims to combine the Senate bill with the House bill that was passed in April, creating one comprehensive legislative package. Kudos to the following senators for passing amendments that could strengthen our energy security and bring jobs to America:
Sen. Hatch introduced incentives for efficient and alternative fueled vehicles and alternative refueling stations. We encourage the widening of eligibility for these credits to ALL non petroleum fuels approved by the Department of Energy, instead of picking winners.
Sen. Schumer, Cantwell and Lautenberg introduced an amendment requiring the Secretary of Energy to develop and carry out a national tire fuel efficiency program for tires designed for use on passenger cars and light trucks. The program is to include policies and procedures for testing and labeling tires for fuel economy to enable tire buyers to make informed purchasing decisions about the fuel economy of tires. Efficient tires can reduce gasoline consumption by 4%.
Sen. Harkin, Lugar, Obama, Coleman and Bayh introduced an amendment on biomass research and development intead to increase production of biofuels that can run in flexible fuel vehicles.
Sen. Bayh and Obama passed the "Joint Flexible Fuel/Hybrid Commercialization Initiative" directing the Energy Secretary to "establish an applied research program to improve technologies for the commercialization of a combination hybrid/flexible fuel vehicle; or a plug-in hybrid/flexible fuel vehicle" - a multi-fuel car that can run on any combination of alcohol, gasoline, and electricity.
Watch this. One minute video clip: Senators say: plug in for America.
July 5, 2005
$80 oil futures being traded today
One interesting way to game markets is to look where the option traders are placing their bets. On the NY Mercantile Exchange there are 6,900 contracts open for buyers to buy oil at $80 per barrel in December. Bloomberg.com: Canada. Someone thinks it will be there.
July 2, 2005
The Clear and present danger
Of our dependence on foreign oil is laid out in a report by none other than James Woolsey and George Schultz: Committee on the Present Danger. No slouches to foreign affairs or international economics. You want to REALLY understand what deep doo we are in. Read this report.
Well GM confirms Americans have caught up with me
Back during the first Bush campaign I started saying that a President who put as his #1 priority, energy independence would do very well by the American people. Now GM (of all people) has come out with a study that says the top energy policy priorities that Americans want their politicians to tackle is...drum roll... "Reduce dependence on foreign oil: 43%": hart_research.pdf . Now the researcher was really trying to gin up support for GM's PR around Hydrogen (while they are actually selling LOTS of gas guzzling SUVs - up 40% last month!!!!!! The conclusion of the report is that GM is not getting it's fair share of credit for their "pioneering" work on fuel cells. come on guys. Americans are smart. They see right through the smoke. Fuel cells won't provide a significant transportation source for 20 years. Get that through your thick marketing heads.
My comments at CleanTech
Well at least one person was blogging it: Cleantech Investing: Energy Tech Investor Conference. I will make my own summary of the conference this weekend between beers probably.
Buying a TerraPass
So I have two 100% biodiesel cars now. That makes me feel better since they put out 78% less carbon than their dinodiesel equivelants. But I still have the Avalanche. And I don't want to get rid of it. In fact I had to take a bunch of stuff to the dump today and it was invaluable. It sure makes those long road trips with the whole family more comforatable too. So what to do?
Buy a TerraPass: TerraPass - Clean up after your car, fight global warming. This start-up will tell you how much carbon your car or SUV pumps into the environment each year. When you buy the appropriate sized TerraPass, the company goes out and funds a project or buys carbon credits on the national exchanges to offset your bad habit. Presto, you have just eliminated your car as a source of global warming! But you have to do it next year as well.
Great idea. Wish I had invested. Maybe I still can. Carbon credits are sold in blocks that are too large for individual consumers to participate today. The market was set up for heavy industry. This is a classic bulk breaking strategy.
I like it.
June 27, 2005
Simulation shows vulnerabilities of oil, a MUST READ
Check this out: Green Car Congress: Simulation Highlights Economic Vulnerabilities of Oil Dependency. This was a bipartisan effort in a "what if" scenario around 3.5M barrels of supply leaving the market through whatever means (terrorist attacks, political unrest, weather, etc.). In my mind there is a 100% chance of that in the next 5 years. What would be the effect on US?
1. Gasoline prices of $5.74 a gallon
2. Global oil price of $161 per barrel
3. Heating oil prices of $5.14 per gallon
4. Fall of gross domestic product for two consecutive quarters.
5. Drop in consumer confidence by 30 %
6. Spike in the consumer price index to 12.6 percent.
7. Decline of S&P 500 by 28%.
And on and on....
Basically world economic meltdown. And you wonder why I am moving my investment focus to alternative energy from software?
June 21, 2005
New Clean Technology blog
Just ran across this today: Cleantech Investing. Rob seems to be doing a good job covering the sector.
June 17, 2005
Comments at SNS from Robert Hormats, Vice Chairman of Goldman Sachs
Robert Hormats will (hopefully) one day be Treasury Secretary. At a recent FIRE conference, he pointed to four imbalances that threaten the world economies over the next 5 years. One of the most interesting to me was the Energy Imbalance. I have reprinted his comments here. Hormats is exactly whare I am. Too much money was spent on technology in the 90s and basically zero on innnovation in energy. We need to invest again in energy technology.
The third big imbalance is the energy imbalance. That essentially is a result of the fact that energy, and the "old economy" in general, was not seen as a very attractive place to invest in the 1990s. Very little new investment in this country went into energy. Very little new investment in the world went into energy, for that matter. Because technology was seen as producing high rates of return, that was the most attractive place to invest.
As a result of this, when the Chinese economy started growing, and the Indian economy started growing, and the American economy and others resumed growth, in the early part of this decade, there was simply insufficient capacity to provide the energy required to service that growth. Today, we don't have shortages like we did in 1993-94, or 1980 and '81, but we do have very tight capacity. Demand is pushing right up against the capacity of the Saudis and other countries to produce oil. That is why the price is so high.
In addition, there's a risk factor, in that you have any number of countries that produce oil and sell it on the world market who are vulnerable to political disruption. Iraq is a case in point. In Saudi Arabia there have been acts of terrorism. Venezuela is run by a very unpredictable person. Nigeria is occasionally subject to internal instability. And the potential for terrorism against oil facilities around the world is a serious issue. As a result of this, we're going to have to go through a period of transition, to where there's more production: perhaps a new Alaskan pipeline, perhaps a pipeline through Western Canada. The Russians are now increasing their production so they can supply more gas and oil to Western Europe and to Japan.
We're seeing some, but not very much, conversation as a result of higher prices. People do tend to be shifting in this country from SUVs to more efficient autos or hybrids, but it's a very, very slow process, and we're going to be vulnerable to disruptions in the supply of oil for some time to come.
In the United States, oil is largely a transportation fuel. We don't use very much oil for industrial purposes. We use gas, we use coal, we use other products, but not so much oil. It's a transportation fuel. And unless we're able to come up with much more efficient means of utilizing oil in our cars, we're still going to be using a lot of oil per capita. It's much, much less than it was 20 years ago. We use oil much more efficiently - we use energy in general much more efficiently, in this economy, than we did 20 years ago.
But what tends to happen is it goes in cycles. When the price goes up, we become more efficient. When the price goes down, we become less efficient: we buy bigger cars, we buy gas guzzlers. Then the price goes up again, and we have to in effect shift the auto fleet from less-efficient to more-efficient cars. So it takes time. We will have a price response, we will have a conservation response, we will have a production response, here and in other parts of the world. But it's a slow process, and while that adjustment is taking place, we're very vulnerable to disruptions in supply as a result of terrorism or other factors.
The other part of the adjustment problem is that building new capacity is very expensive. People say, "There's plenty of oil; there's plenty of oil in the ground." In fact, there is plenty of oil in the ground, but much of it is very distant from the places where the oil will be used. And also getting it out of where it is now, to the ports and to the gas pump, is expensive.
I'll give you one example to give you some sense of how the numbers have changed. There's this notion of building a pipeline from central Siberia to the far eastern Russian coast, to a port called Nakhodka. Five years ago, it was going to cost something on the order of $5 billion to build that pipeline. Today, given the price of steel, given the shortage of workers, it's $12 billion - that's the estimate. So if you take just the very cost of building these big oil projects, and then you look at the political risk... There's plenty of oil in the western desert of Iraq. Who's going to go in there? Which company is going to go put its people in there, subject them to acts of terrorism? Very few people.
The Saudis are in fact increasing their production; they've more than doubled their rig count. But the Saudis can't provide all of it. You need to have oil in other parts of the world, more diversification, and there are political risks, there are geological risks - and of course the cost structure, as I say, is much more prohibitive than it was several years ago.
So there is an adjustment taking place. It's going to continue to take place. We will, over a period of time, develop a better balance between supply and demand for oil, but while that's occurring, the vulnerabilities are very significant and troublesome.
June 10, 2005
Great set of recent oil reduction articles
Breaking That Dirty Oil Habit An unlikely alliance of hawks, doves and greens has a plan to help america guzzle less gas. Could it work?
An excellent roundup of progress with plug-in or gas-optional hybrids, biofuels and cellulose ethanol -- by all means forward the article or this message. It builds on the March Newsweek piece, "Imagine, 500 mile per gallon vehicles" by Fareed Zakharia
The TIME article appeared in the June 13, 2005 issue sent to subscribers; it's not in newsstand copies.
Now you view or download a scanned, printable color 3MB version of the entire article at http://www.calcars.org/Time-OilHabitJuly05.pdf
We hope to have a four-page flyer available (minus full-page photos of former CIA Chief James Woolsey in his Prius and an ethanol "field of dreams")
The original article is found online at
The text version, not including photos, charts, and a long sidebar on cellulose ethanol technology, is at
June 9, 2005
What is made from a barell of crude oil?
This PDF oilfacts.pdf is a bit of industry puffery, but it does one thing well. Tell you how much of each product comes out of a barrel of crude oil. The industry has become masters of wringing out every penny of value from that barrel. Oh, and a barrel is 42 gallons. Who knew?
June 8, 2005
two important R&D projects ongoing about energy independence
May 23, 2005
Where is the Renewable Energy money?
Tired of reading about all this government money available for renewable energy but don't know how to find it? Well fortunately this vertical is fairly well organized and has their own database of state programs which support renewable energy here: DSIRE: DSIRE Home. Reading this I see that Washington state is sorely lacking. Probably because we are totally spoiled with cheap hydro from BPA. But that will change soon.
May 19, 2005
How important power is to technology...
I remember when we choose a new office for Loudeye, we didn't much consider the power requirements. We figured we were right smack dab in the middle of the city and we coul get all the power we could ever want right? Wrong. The building only had 800 amps. We needed something like 2000. The local power vault for the block wasn't big enough. Know what you have to do to get more power? That's right, pay for a grid upgrade for your whole block! So we did.
Google knows this. This guy: phil ringnalda dot com: Just how much power does Google need? dug into the Google purchase of some land in The Dalles Oregon right next to the BPA hydro dam. That's right, a steady supply of power for a data center. If you are going to have a Google size data center you need a Google of power and you can't get that everywhere. Access to clean affordable electricity is increasingly becomming THE critical issue in large compute farms.
May 16, 2005
American Ex-pat in Japan sounds the warning on peak oil
Bill Totten is a well respected ex-pat living in Japan. He recently posted: Bill Totten's Weblog: The Likely Impact of Global Oil Peak on the United States a very long very pessimistic view of what is going to happen to America due to their current energy policy and dependence on foreign oil. In the first half he lays out the current state of our dependance (no argument here). In the second part he predicts lots of dire consequences due to limited public policy options. At the same time, I just finished reading The Bottomless Well, which predicted an infinite supply of power (mostly focusing on electricity) due mainly to American ingenuity and the transition from a mechanical world to a silicon world. I tend to agree with the later more. America will innovate our way out of this. Especially as more and more of the very smart people from out last great revolution (technology) set their sights on this problem. Most traditional energy analysis models vastly underestimate the effect on demand that the conversion to a silicon economy is bringing. The BTU consumption is steadilly shifting from oil as a fuel to electricity as the fuel (generated centrally by coal or nuclear). Transportation is the last great outpost of oil dependancy and even that category is being affected by the silicon economy (Prius, solid state drive trains, etc.). When you factor in those effects, the picture is less bleak, but no less urgent.
May 10, 2005
Now here is a disturbing site
How much do you think your region sends away every day to buy oil and natural gas? Well the web has an answer for the Northwest (Oregon, Washington, Idaho). It is over $30M per day, more than we spend on public K-12 education, three times our state budget deficits, and most importantly, more than our traditional industries (logging and lumber) bring back into the industry. Money spent on fossil fuels is forfeited from the Northwest's economy. The site also offers a newsletter to stay up on local events related to oil imports. This is an excellent example of local action.
May 9, 2005
Set America Free has a plan
I have been posting for some time that we need a new national plan on the scale of taking a man to the moon to get America off dependence on foreign sources of energy. Many others are also picking up this refrain. Now I find one idea for a "blueprint" to do just this: blueprint.pdf. A little heavy on the conservation side and some specific technologies like Plugable Hybrids, but the general thrust is accurate I believe. It is fuel source diversification. Leverage existing infrastructure and diversify the fuel sources. That means Biodiesel and Ethanol through exisiting fueling infrastructures. That means figuring out clean coal. Let's get going!
Edrive Systems is commercializing the hackable Hybrid
These guys: EDrive are trying to commercialize the Plugable Hybrid system I have posted about before for the Prius. They are going to have to have a clean, easy to install package for Prius owners. I bet they won't get around the Prius warranty which will be the major barrier. They replace the batteries and reprogram the computer. I would install one, but don't know if it will be a big business. Cool application though.
They are doing for "demonstration purposes only" now at "substantial cost". To get them to market cost and scale will be a pretty big investment. Not one I would make as a VC because you have a monopoly (toyota) who can totally FUD your customers into not buying. I wish them luck though.
May 6, 2005
Considering LEDs to replace incandescent bulbs
I am considering putting LED based light bulbs in all my house to replace all the incandescent bulbs. The primer on how LED's work and their comparison to incandescent is here. Apparently these guys: Welcome to LEDbulbs - LED lamps and LED Bulbs are the leader in selling the bulbs. Look for a review soon.
May 3, 2005
Novozymes and NREL announce 30-fold reduction in ethanol
www.novozymes.com announced on April 14 that in the lab they have created ethanol from cellulose at 0.10-0.18 per gallon. Since the bogey is 0.80 per gallon to be competitive, this is a MAJOR advancement. In technology my bogey is a 10x improvement over the old process. This is 30x. Now it is in the lab and there is alot of other stuff to get this process into a commercial setting at scale, so the cost will probably go up. But there seems to be room for some of that overhead. I wonder when this will be in the field.
May 2, 2005
Iogen close to opening first Cellulose Ethanol plant
Iogen recently announced that it has opened a small plant and is looking for a place to build a $300M 50M gallon plant. What is the difference between Cellulose Ethanol and regular corn Ethanol? Cellulose ethanol is made from all the left over stuff of farming and timber. All the stalks left in the field, old woodships, whatever. Stuff that is today burned or left to rot. Corn ethanol actually takes alot of processing and, well, corn. Iogen now has 170 people, KP, Royal Dutch Shell and others as investors. Would have been good to be in that one early. But then again early was 1970 and I bet there have been a few re-caps along the way...
April 14, 2005
Here are the biofuel productivity numbers
One comment you often hear about biofuels is that it takes more energy to produce a unit of energy than fossil fuels do. Well not quite right. It does take more Total energy (because more processing is required) but less FOSSIL energy. Here are the facts in a graph: Energy Balance of Biofuels Graph.pdf. Basically when you compare the non-renewable energy consumption between say diesel and biodiesel, Biodiesel requires 4x less FOSSIL fuels to produce the equivelent energy. Since the other energy is totally renewable, the net environmental beneifts are HUGE.
It always helps to compare apples to apples.
Hacking the hybrid
What if you could hack your Prius as easilly as you could hack your Tivo. These guys: Yahoo! Groups : calcars-news have. They have fitted the Prius with better batteries, given it a plug to plug it in at night, and changed the programming to run more often on electric. This has pushed the mileage up to 180mpg in some cases. On top of that if you run on Ethanol instead of petroleum gas, you use almost ZERO oil products. Now that is cool! I am sure you void your warranty, but for 180mpg, who cares?
March 30, 2005
Want to run your car on free Fryer oil?
I have been amazed by the growth recently of "greasecars". Basically a diesel auto that has been modified to run on Waste Vegitable Oil straight out of the fryer. What you need is a separate tank to heat the grease (since it congeals) and some flushing equipment to switch back over to regular diesel for starting in cold. Now you could process this into Biodiesel like my favorite ecorebel BioLyle, but that is a messy and dangerous endeavor.
For those who don't mind pumping grease out of the back of a chinese restraunt, but don't want to turn their garages into a chemistry lab, you can get people to put kits on your car. Here in Seattle there are a couple of people who do it including The Green Car Company LLC (Kirkland) and Goodwin Motorsports (Capital Hill) or Grease4Fuel. You can buy a pre-manufactured kit from Greasel or the granddaddy of the business GreaseCar or many of the installers have their own custom manufactured kits or modifications (like Goodwin beleives he has a better mousetrap).
In the last couple of months I have met dozens of people who have not paid for fuel in years. They just pull up to McDonalds and fill'er up. This is truly the American spirit of adapt, overcome, and succeed. Not for everyone, but I am keeping my eye on this area as the technology becomes easier to install and the grease becomes easier to get (look for filtered grease pumps in Seattle soon). I would expect the price of filtered, processed grease to be about $.75 per gallon at retail. Low enough to be compelling for the convenience factor.
March 7, 2005
Climate Solutions pushes clean car legislation
The Olympia based non-profit Climate Solutions has started a campaign to get Washington to adopt the strict emission standards that California has. The Clean Cars for Washington campaign is print, on-line and TV. I have seen many ads on Fox, CNN and TNT in the local feed. Looks like they are basically trying to get people to fill out a web form and send it to their legislators asking them to pass "clean car" legislation. I don't know anyone who would be against that, but unfortunately the site is a little short on details. It is long on benefits, but short on costs. I was looking for a list cars that would qualify. Couldn't find it. I tried to figure out if most passenger diesels were outlawed (as they are now in California) and couldn't find anything on that.
Got to give them props for trying though.
March 3, 2005
LivingDirectory.net the open source social network
Lately I have seen a couple of community action sites using the Living Directory. It is a free non commercial, no advertising social netork created by two guys. The goal is to have a directory with basic hosted listserver and group admin functions that can be used by other non-profits to run their groups. People like PlaNetwork use it. Interesting idea. Worriesome for Friendster, Meet-up, Spoke et al. Who would have thought that hosted community services would also be under fire from open source much like Microsoft?
New York researcher turns wood into Ethanol and more
With a little bit of research this country could be completely energy self sufficient. I have said this many times. One more signpost along that road is a researcher in New York who has a process to turn wood into Ethanol with an acetic acid byproduct that is three times more valuable: SUNY College of Environmental Science and Forestry - Business Affairs Of course it is still in the university lab and no-one has built a commercial production facility on this idea yet, but the work is getting done. It would be cool to have a fund focused on commercialization of these many renewable energy inventions that are today only in the labs. The only funds I have seen in this area so far are much later stage after a facility is up and running.
February 25, 2005
Declaring energy independence
I have been talking about how declaring energy independence from the rest of the world would be the best thing to happen to this country economically and politically in a century for some time. Found this guy who has taken the idea a step further and taken a stab at defining what energy independence would mean in practical terms. A good read: Lightkeeper: Declaring (Energy) Independence
February 23, 2005
MIT sponsors Clean Energy Business Plan competition
The local MIT Enterprise Forum has typically presented main-stream IT related forums. It looks like the one back in Boston has more active Special Interest Groups. One is sponsoring a $125K business plan competition: Energy Special Interest Group
Here is how they define Clean Energy technologies:
* Renewable Energy: active solar, wind, fuel cell, bio-energy, and hydro-technologies;
* Energy Efficiency and Demand Response: electricity end use, buildings, and grid applications;
* Enabling Technologies: power electronics, storage, cables and wires, sensors and instrumentation, control systems, materials and manufacturing technology; and
* High-Performance Buildings and Green Systems: sustainable design and integrated clean energy applications.
I would add some other sectors, but these are ok broad stroke categories. I am going to attend and see what the kiddies are up to.
December 28, 2004
Performance electric car poll results
Here are the results of that poll:
How much would you pay for a luxury sports electric car you could charge in regular outlet, reached 100mph with 300mi range?
less than $15,000 15 %
$15,000-$30,000 23 %
$30,000-$45,000 38 %
$45,000-$60,000 15 %
$60,000 + 7 %
Total votes 13
looks like most people only want to spend what they spend on average for an SUV, 30-45K. I personally would spend over 60K. I am looking forward to performance electric sports cars that are coming out this year.
This month's poll is about use of BioDiesel. Specifically how much B100 a month do you use? I guess most people will say zero. But I have the Touareg and want to start a discussion around what the world would look like if 100% of today's diesel cars and trucks ran on B100 instead of petroleum based diesel? Follow this discussion at www.B100Fuel.com.
December 21, 2004
Now here is what Santa should put in my stocking
October 27, 2004
Weekly alternative fuel price index
From around the country. Here is last weeks. afi09-23-04.pdf. Looks like Biodiesel is trending up. But these prices should change radically with the subsidy passed by Bush last week. B20 should be about the same price as #2 Diesel.
More Energy Life Cycle Model
Props again to GreenCarcongress for A Lifecycle Emissions Model (LEM): Lifecycle Emissions from Transportation Fuels, Motor Vehicles, Transportation Modes, Electricity Use, Heating and Cooking Fuels, and MaterialsDeluchhi, Mark A. ITS-Davis December 2003. Table 58 has a pretty good summary of his emissions findings.
If you have time to read 444 pages, you will learn more than you ever wanted about lifecycle modeling of different fuel sources. This lifecycle modeling is actually the key to sustainability. How much energy does it take to deliver the WHOLE system? from product production to fuel production to delivery, to consumption, to effeciency, to end of life. Not all systems are created equal.
More alternative auto life cycle analysis
Thanks to Michael over at GreenCarCongress for these pointers to auto life cycle costs.
MIT has done quite a bit (John Heywood at MIT: Sloan Automotive Lab and Lab for Energy and the Environment. Three papers from there in particular:
1.“On the Road in 2020: A life-cycle analysis of new automobile technologies,” M.A. Weiss, J.B. Heywood, E.M. Drake, A. Schafer, and F. AuYeung, MIT Energy Lab. Report, MIT EL 00-003, October 2000. http://lfee.mit.edu/publications/PDF/el00-003.pdf.
2.“Comparative Assessment of Fuel Cell Cars,” M.A. Weiss, J.B. Heywood, A. Schafer, and V.K. Natarajan, MIT Lab. For Energy and Env. Report, MIT LFEE 2003-001 RP, http://lfee.mit.edu/publications/PDF/LFEE_2003-001_RP.pdf.
3.“Coordinated Policy Measures for Reducing the Fuel Consumption of the U.S. Light-Duty Vehicle Fleet,”
A.P. Bandivadekar, and J.B. Hewood, MIT LFEE 2004-001 RP, http://lfee.mit.edu/publications/PDF/LFEE_2004-001_RP.pdf.
There were some new paper on biodiesel that came out of the recent DEER conference (Diesel Engine Emissions Reduction) – it’s a DOE conference. I attended, but just haven’t had a chance to work through the volume yet.
The research done in support of California’s AB1496 (the Pavley CO2 emissions bill) also turned up some interesting results on well-wheel and lifecycle analysis for alternative fuels and combinations of different more standard technologies from a variety of research institutes, consultancies, etc.
President Bush sends some pork to alternative fuels
While many in DC are down on Bush as a texas oilman, they neglect many of the facts. I have been saying for quite some time that investment in alternative energy sources to reduce our dependence on foreign oil would be a huge economic and national security driver. Well the most recent "American Jobs Creation Acto of 2004" has many incentives to do just that. The skeptic would call it election year pork. The pragmatist (me) would say it is the right start.
This from the National Renewable Energy group today:
President Bush signed H.R. 4520, the "American Jobs Creation Act of
2004," into law on Friday. The new law creates and extends a number of
energy-related tax credits, including an expansion of the renewable
energy production tax credit. This credit formerly applied only to
wind energy and some biomass energy projects, but Section 710 of the
law now expands the credit to a wide range of biomass, geothermal, and
solar energy projects, as well as hydropower produced from small
irrigation projects. The tax credit applies to facilities placed in
service before the end of next year.
The bill's Title III also extends the tax credit for ethanol through
2010 and creates a new tax credit for biodiesel, effective through
2006. It also removes a disincentive for ethanol and biodiesel
production by eliminating any impact on the Highway Trust Fund caused
by the tax credits.
Section 701 of the law places the U.S. Environmental Protection Agency
(EPA) in charge of a demonstration program to provide up to
$2 billion in tax-exempt financing to green building and sustainable
design projects on so-called "brownfields"—abandoned industrial
sites. The EPA's aggregate goal for the program will be to reduce
electric consumption from traditional sources by 150 megawatts, reduce
daily U.S. sulfur dioxide emissions by 10 tons, expand the domestic
solar photovoltaic market by 75 percent (compared to the market growth
from 2001 to 2002), and generate at least 25 megawatts of power from
fuel cells. The projects must be partly supported by state or local
governments and must be nominated by state or local governments within
the next six months.
See the White House announcement on the bill signing, or go directly to the full text of the law. The new law was greeted with enthusiasm by the National Ethanol Vehicle Coalition; the Renewable Fuels Association, which issued press releases on October 10th and October 22; and the National
Biodiesel Board, which issued press releases on October 11th (PDF 35 KB) and October 22nd (PDF 35 KB). Download Acrobat Reader.
Results of alternative fuel poll
For you to adopt an alternative fuel vehicle, what is the most important factor?
Convenience of refueling 30 % (12 votes)
Cost of the fuel 10 % (4 votes)
Range of the vehicle 17 % (7 votes)
Features of vehicle (SUV, compact, luxury, etc.) 17 % (7 votes)
Cost of the vehicle 12 % (5 votes)
Emissions 7 % (3 votes)
Insurance costs 0 % (0 votes)
Tax incentives 2 % (1 votes)
Total votes 39
Looks like it is a convenience of refueling thing along with range and features. This lines up with one of my overarching investment thesis: Americans are convenience driven! To get a new thing adopted, it has to slip easilly into daily life. This leads me to hybrids and biodiesel....
September 22, 2004
Federal grants for alternative fuel vehicles
Find 'em here. AFDC 2004 Financial Incentives Basically you can get a $4,000 tax credit for your prius. And lots of other stuff if you promote fuels and vehicles in particular verticals like buses, etc. Hundreds of grants. Hey, make your tax money work for you!
What are Washington incentives for alternative fuels?
Look no further: AFDC 2004 Financial Incentives. There are many regulations which set minimum fuel effeciency stadards for state fleet purchasing and move those up each year. Also detailed are the low yearly fees that LNG and CNG vehicles pay instead of fuel taxes. Also detailed are a significant break in sales tax, property tax and B&O tax for those engaged in BioDiesel manufacturing. Now if they could only exempt BioDiesel from fuel taxes like they are CNG and LNG.
September 20, 2004
Field guide to hybrid car technologies
Green Car Congress: A Short Field Guide to Hybrids. Great intro to the varying degrees of hybrid technologies available. Now what I want is a side by side environmental impact comparisson between different flavors of hybrid and biodiesel.
September 17, 2004
Joining a new distributed computing project
Just joined the Stanford University protein Folding distributed computing grid. I used to do SETI@Home, but have been looking for a new cause to donate my CPU cycles to. And now I have five extra PCs at home running all the time. Thanks to James over at Alternative Energy Blog for pointing out that CPU cycles of a powered up PC that are not used are "wasted resources". No longer.
September 8, 2004
San Diego creates hub for alternative autos
Regional Transportation Center, San Diego, CA is a $15M public/private project to showcase alternative fuel vehicles. They have a showroom for autos (mostly from sponsor FORD), a service bay, and fueling stations for five different fuels. With a regular gas station costing between $2-$4M this project definitely falls into the "nice to have" category. Strictly for early adoptors. Would like to stop by next time I am down there. Anybody been?
August 16, 2004
What if you could start over?
Seth's Blog: Starting Over asks a provocative question? What if you could start over? What if you could set the standards for a car from the get go? The Chinese certainly have shown no fear of being authoritarian. Why should they burden their growth with dependence on outside energy? Why not make all the manufacturers pony up to a higher standard from the get go. We here in the "1st" world could benefit if they did that.
August 4, 2004
Engaging interview with a sustainability activist
"Activist" is a word that makes me cringe for some reason. It conotes limited thinking, single issue focus and typically the finges of things. But aren't entrepreneurs "activists" for their companies? How do unpopular ideas get popular? Through activism.
Grist magazine just published a very interesting interview
with Hunter Lovins, president of Natural Capitalism, Inc. Lots of good thoughts on the right questions to ask when thinking about energy sustainability. The most productive approach by far (after all these years) is to design better, more effecient energy consumption devices. It can be done.
It wasn't until 1976 and Amory Lovins' piece in Foreign Affairs -- "Energy Strategy: The Road Not Taken?" -- that I found an internally consistent approach to solving the energy challenge. The trouble was that Amory, a physicist, wrote so technically that almost no one would take the time to try to understand him. I only did because a man I highly respected said that this was the approach for which I had been searching. But I had to go through the article with a ruler and a dictionary, line by line, figuring out just what he meant. None of the other TreePeople would even try. So I translated Amory's end-use/least cost analysis into English and started teaching it to the third graders and senior citizens to whom we were teaching environmental education.
Stripped of the technical language, it made a lot of sense (and still does). His analysis asked: What is it that we need energy for? Illumination, comfort in buildings, mobility, hot showers, and cold beer. And what is the cheapest and best way to meet our desires for those services? Turns out when you ask it that way, no kind of new power plant makes any sense, because electricity, a very expensive and high-quality form of energy, is only needed to meet about 10 percent of what we really use energy for. Most of our needs just require low temperature heat or liquid fuels to run vehicles. But almost every official energy policy starts with what kind of power plant to build. Even many environmentalists ask, "Should we use PVs or wind rather than nuclear or coal?" Wrong. We should construct our buildings so that they stay comfortable using insulation and good passive solar design, our cars so that they will get 100 mpg, and our factories so that they have no carbon emissions. Doing this turns out to be the cheapest option, buys the most environmental protection, and is the only policy that preserves a democratic society. It's a lesson we still have to learn: Technology is the answer! But what was the question?
August 3, 2004
Kerry pandering for votes with alternative energy pitch
Not surprisingly, the Suadis are not alarmed by John Kerrry's pledge to end U.S. dependence on Saudi oil. His proposals are only election year politicing for votes. He doesn't really have a plan. The primary thrust is to try to move imports from the Mid-East to Russia or Africa. So you trade the political instability of one region for another. Saudi Arabia has 25% of the worlds reserves. America will have to deal with the mid-east for the foreseeable future.
In the past, I have suggested that just such an energy independence initiative is what the country needs now. But not shifting sources and wordsmithing "alternative technologies". We need an energy independence goal like we had a space race goal against the Russians. The goal should be complete self sufficiency from ANY foreign source. This would achieve two goals the counrty needs now. First, economic benefits around a new round of serious investment in new ideas. Two, the security benefits long-term to having options. Not that we will exercise all those options, only that we have them. Our energy consumption would be under our own control. This is vital for the long-term stability of America. We can't keep using our superior military force to protect our economic interest at all political costs. Now, I don't expect such a propoal for energy independence out of Bush, but at least I know he has a clear picture of what it takes to stabilize the system we now have. Kerry is dreaming of a utopia that is not attainable in this lifetime.
July 17, 2004
TheAirCar makes progress (according to their press release
got this in the e-mail inbox...
A car powered by air. Sounds too good to be true. They are signing production deals. Just in Europe though. I bet they don't get the US crash test stuff done. Very tricky. But I will be one of the first buyers when they do!
The Air Car enters the home straight
The recent presentation of the Air Car at the European Fuel Cell Forum in Switzerland and the sale of a number of licences in Spain and Italy allow a glimpse of an imminent entry to market for the eagerly awaited ecological vehicle.
MDI, the company which invented the Air Car, on the 30th June presented its CityCats vehicle at the European Fuel Cell Forum in Lucerne, Switzerland. This forum, dedicated to an other transport alternative (hydrogen), gave MDI the recognition of the automotive industry, presenting the invention as "Compressed Air: The Most Sustainable Energy Carrier for Commuting Vehicles". The vehicle drove around the roads in Lucerne, driven by Dr Rudolf Rechsteiner, member of Swiss Parliament, who demonstrated his keen interest in a technology that could cause a paradigm shift in automobiles.
The meeting was of primary importance if we take into account the range of vehicles on offer today. The transport sector has reached a crucial stage. The Bush administration has cancelled proposals to investigate regular engines and meanwhile the manufacturers of electric cars have thrown in the towel due to the high production costs and the difficulty in maintenance associated with low mileage. In terms of a hydrogen car proposal, reliable sources do not expect one to reach market before 10 or 15 years, leaving the public with no real alternative. In this context, the MDI technology is the only viable proposal in the short and medium term and that is why the Fuel Cell Forum organisers presented MDI as the best existing solution for transport.
But the MDI compressed air engine is not only applicable to the automotive sector. Its technology is opening a new path of choice in other areas, such as buses, electric co-generation, compressor groups and marine applications. On 1st July in Madrid, Spain, the signing took place for the sale of licences for co-generation and buses in Spain. The investing company has signed an agreement worth 24 million Euros which will focus on a first phase of production of co-generation groups. MDI is also in talks with a Spanish company to reach a similar deal for Portugal.
Spain and Italy are the first countries to sign the agreement for the manufacture of electricity production groups. These systems allow a big saving while offering a solution to a recurring problem: how to produce energy locally according to the production and necessities of consumption. The MDI groups can also be installed in racks, offering an expandable solution which can be applied to a group of houses as well as to an isolated home or without connection to the network. The MDI proximity groups are the solution for providing electricity in developing countries where electricity cables and pylons cannot be installed due to the high cost involved. All these proposals are in pre-commercialisation phase, bringing to an end a long investigation which has resulted in a clean, ecological solution applicable from transport to energy production. MDI is now offering manufacturing licences for each of these products for the different countries of the world.
For more information about:
Presentation of the MDI car in Switzerland:
Application of the engine for public transport:
Formulas and comparisons:
Technical report by the prestigious "École des Mines" in Paris:
Refilling systems for CATs vehicles and possible alternatives:
Requests for further information: :
March 18, 2004
Roundup of Hybrid SUVs
Autobytel Research just published a round up of the three announced and soon to ship hybrid SUVs. Being a 100% SUV family (not counting the motorcycles and Segways) I am waiting in eager excitement for these. I don't like the Lexus styling at all. The Ford is passable and the Toyota is a year later than all the rest. I will drive the Ford and let you know what I think. But I like size and may wait for the Tahoe.
March 12, 2004
The worlds fastest electric car
The guy who developed the Rocket Book is trying to commercialize high performance electric sports cars at tzero home. Gunna drive one Wend. Wait for the review!
March 5, 2004
Intel announces new power management for servers
Intel has finally realized that server power consumption is outpacing data center capacity and that ever faster CPUs increase TCO when they run hot all the time. New Server Power-Management Technologies Address Power and Cooling Challenges. Of course Intel is focusing on regulateion of processor power consumption (product called DBS policy). A second piece they talk about is ACPC which is basically a throttle on the power supply from pumping out too much power. The user can set a maximum draw from the power supply and if the computer starts working too hard, asking for too much power, an interupt is sent. Now I don't know what that means in practice. Does the server stop running? Does it just slow down the processes and disk, etc. to reduce demand on the power supply? Does it tell the OS to kill processes? This could get tricky. The last piece is EPTM which is basically an data center power management console to run servers with ACPC and DBS. Now I bet Intel can do the DBS pretty well. The ACPC is scary. The data center software they will not get right for sure.
None of these technologies address any other devices in the data center including routers, APC supplies, monitors, etc. Neither do they sound very smart about the applications and actual usage paterns of the equipment. Then there is the whole issue of install base. I wonder what the replacement cycle for intel based data center servers is?
March 4, 2004
ESCOs drive energy conservation spending
I am starting to look at ways to sell software into the conservation market. One group of people growing at 25% a year selling all sorts of solutions into those trying to conserve energy are the ESCOs. Basically the system integrators of the business. Good article on background here. I wonder what those companies are valued at?
February 4, 2004
Here is a gadget you can make in a weekend...
PCTHiker.com: Pepsi-G Stove Assembly Instructions. If you are an outdoor guy like me, you probably spent over $100 bucks on your camping stove. This one is free with an afternoon of work...
December 29, 2003
The Wheel, a new idea in electric cars
Most of the "inventions" that I have been seeing in the green car area basically keep the main functions of the car intact. Just subsystems are replaced. Like an electric or hybrid engine for a gas engine.
From Denmark comes a completely new approach: e-Traction Products Page. Take the electric motor and put it INSIDE the wheel. No transmition. No gears. No central motor (although the prototype has a diesel generator to power the motors). Very interesting idea. Make a self propelled wheel.
December 19, 2003
The First fuel cell powered Zero emission bus on the road
Transport for London - Press Release. London takes delivery of first fuel cell powered bus. Them and 9 other European cities are in a two year project to convert their fleets. The Europeans beat us again. We are in danger of loosing our competitive edge in many industries if we stick to our oil is power policies.
December 10, 2003
A green VC?
Yes Scotty, there is such a thing. Changing World Technologies
December 2, 2003
Government site on fuel economy
Type in Porsche Turbo in Google and you get this site: Fuel Economy. Go figure.
November 29, 2003
Convert your car to a Vegitarian!
You can turn any diesel car into a Grease Car. This is something I have been looking for. An aftermarket kit that is environmentally friendly. Not there is still the problem of where to get a steady supply of the stuff from you fat fryer. And the smell is bad. But there are solutions to that as well. There is a guy in seattle who collects and distributes the vegitable oil.
Haven't found a solution for the smell though. And this is just for diesel cars. The real win would be a bolt-on for a gas guzzler SUV. Still looking for that one..
November 14, 2003
The problem with portable computing is batteries
The issue is now being covered by Newsweek. The Energy Crisis on Your Lap Maybe we will get some consumer pressure to bring innovations from the lab out to the market. I know these problems have been solved and the problem is a business model one. There is a good overview of the technical issues here.
Tesla - Free Energy - Nikola Tesla - Alternative Energy - Wireless Electricity
A 30,000 ft flyby article, good overview. I have seen a couple of wireless electricty deals lately. Most were short range and basically came across as expensive power cords. The environmental impacts are the real big issue. Talk about EMF! The other thing is that you usually need to re-engineer the device to accept the wireless energy. And provide "energy ports" in desks and other places near devices. Talk about an embedded strategy problem!
But the Tesla coil is different. It can light existing bulbs without heat. And transmit energy over long distances. I wonder if anyone has taken the ideas with current technology and materials.
Wow, the battery is 2000 years old instead of 200
Most people think the battery was developed in 1800, but in fact it there is one that dates from about 245 BCE: History of Iran: Parthian Battery: Ancient Iranians, The Inventors of Battery
The basic design hasn't changed. It needs to.
October 30, 2003
Here are the guys making the fastest electric car. AC Propulsion Home I hope they have a real business outside exotic cars. I would love one for $40K or so.
The World's fastest electric car
Now here is a car I could buy! Forbes.com: The World's Fastest Electric Car But at $220,000 I may wait for the consumer model. It has speed and range, something missing in most current electric cars. Read on to find how it achieves these innovations...
October 29, 2003
Dr. Dan in Seattle delivers Biodiesel
Was reading the seattle times this weekend and ran across these guys. Dr. Dans Altenative Fuel Werks Someone who actually is doing something about delivering alternative energy today. They manufacture biodiesel which can be used in any diesel engine. Those who would rather buy a clean source than the further deplete the oil reserves can sign up. I wonder if that business is scalable?