Energy. They Don't Call It Power for Nothing.

Ethanol Efficiency - A great post by Advanced Biofuels USA

2011-04-09T12:18:00.000-07:00

A great blog post (see the original post HERE) by Advanced Biofuels USA by Robert Kozak (NOTE: This is a nonprofit organization I am unfamiliar with other than this post). The article discusses a graph produced by the NRDC showing the CO2 intensification of various energy sources..

The big things I really wanted to pull out of this post. I haven't seen this said better:

This trendline also got me thinking about how long it took the petroleum industry to reach its current efficiency that allows it to produce a gallon of gasoline for about 26 lbs CO₂. As it turns out, the answer is at least sixty years -1910-1970.

Production and quality improvements have been slow in the petroleum industry. While the first oil well was drilled in Pennsylvania in 1859, demand for gasoline did not really exist until 1900 when cars with internal combustion engines began to be produced. It really took off after 1908 when the Ford Model T began production. However, neither performance (octane rating) nor conversion efficiency were quick to follow.

For instance, the catalytic cracking of crude oil into gasoline, which doubled existing yields of gasoline, was not developed until the 1930s. Octane ratings, a measure of gasoline’s ability to withstand pressure to produce more power (current regular gasoline has a rating of 87 and ethanol 105+), were about 40 until Allied aircraft needed high octane fuels to fight German and Japanese planes in WWII. This octane development work was largely financed by the US government. The current hydrocracking technology which again increased gasoline yields, did not come on-line until the 1960s, while the current rate of oil to gasoline conversion was reached after the 1973-4 oil shock.

Why did Oil Prices Go Back Up?

2011-04-02T09:26:00.000-07:00

Above is a graph showing crude market prices over the last few years. More on the spike from this most recent February below.

I've been meaning to get this post up for over a month. Oil prices rose back to 2008 levels suddenly in February. The price increases coincided with civil protests in the Middle East. First starting in Egypt the protests expanded to Libya, Iran, Saudi Arabia and Syria. This unrest ultimately leading to the stepping down of Egypt's long time dictator and an open revolution inside Libya which continues to this day.

Of course the unrest is the defacto explanation for oil prices as the news covers the rising pump prices. In my own small oil business I haven't had one call to my office by customers asking "why is diesel a dollar more than a few months ago" which is odd. Usually get a consistent stream of calls as oil prices hit certain dollar marks. As we past $3 and moved onto $4 a gallon for finished products I didn't hear a peep from my customers. It seems as if the American consensus is that petroleum is just higher than $3 a gallon and $4 is acceptable.

Here is what I don't get though in this rational script of why prices are high. For two weeks Egypt's protests grabbed headlines and the markets didn't move but a little bit per barrel. It wasn't until President's Day, a day the US Markets were closed, that a true price spike occurred. This spike was isolated to just commodity futures trading (not Supply and Demand forces).

There was no watershed event in the Middle East (other than the lack of Egypt's upheaval spreading beyond its Euro-aware neighbor Libya). The grand scheme of world oil production Libya shutting off its spigot would not normally cause a move like this as a permanent realignment of pricing. But on a day the US Markets happened to be closed a ran occurred in smaller trading markets with an expected result caused the following day in the US. I can't help but actually see this as a speculative run attempting to push the price of oil up.

This strikes me as literally a bold and obvious move to manipulate markets like something out of the Age of America's Robber Baron past. Player's with market power exercised it in a coordinated way not as an expression of market efficiency but taking advantage to leverage their own market power to pull profits off the top. Our current oil prices are not solely set by a currently adequate and for the most part unchanged Supply and Demand but because of trading volumes in a futures market.

I also want to share with you my perspective on President's Day. I remember it because I was at my desk and the Editor of OPIS (the Oil Price Information Service) sent out an email that immediately grabbed my attention. See below:

Below is the email I received.  I wanted to post it for a single reason.  To document the day prices went back up without a real market explanation.  See OPISnet.com's Editor's email below:

---------------------------- Original Message ----------------------------

Subject: Oil Futures Soar in Electronic Trading; Marketers See Hefty
Tuesday Price Increases
From:    "Oil Price Information Service" >
Date:    Mon, February 21, 2011 11:10 am
To:      "Mark Fitz" >
--------------------------------------------------------------------------

This breaking news story is brought to you by Oil Price
Information Service...

   The peace and calm for marketers who are today observing
Presidents' Day has been interrupted by a paroxysm in global
prices for crude and refined products, which almost certainly
will add 5cts/gal or more to wholesale prices tomorrow.
   The New York open outcry markets are closed, but some hefty
volumes have changed hands in electronic trading and sent
overseas crude prices as high as they've been since September
2008,[NOTE: bold emphasis is mine] and pushed gasoline and diesel prices up 5- 7cts/gal in the
process.
   Brent crude, which has been the driving force behind NYMEX
RBOB and heating oil futures price gains in 2011, traded for over
$105/bbl this morning, spurred by violence that appeared to
escalate into chaos in Libya. Libya produces some 1.7 million b/d
of crude. There are also concerns that violence in the Persian
Gulf may be ratcheted higher as unrest in the region shows no
completion date.
   April Brent crude was trading at $104.73/bbl, up $2.21/bbl at
presstime.
Even higher numbers were seen in electronic WTI action, where the
expiring March contract moved up $4/bbl to $90.19/bbl and the
April contract (which will soon represent the prompt month)
rallied some $4.38/bbl to $94.08/bbl. This latter rally has the
interest of technical analysts, who believe it may signal a much
larger pop.
   March RBOB futures were up 5.87cts/gal at $2.61/gal and April
(the low RVP month) moved up 5.87cts /al to $2.749/gal.
   March heating oil was up 6.46cts/gal at $2.7775/gal and April
barrels were 6.52cts/gal higher at $2.7912/gal.
   Most U.S. oil companies are closed today, so OPIS has not yet
seen a host of intraday moves. Terminals are quite busy, however,
as jobbers race to get ahead of price increases that might add
$400-$500 per load when spot markets reopen for business
tomorrow.

President's Day 2011 was the day the oil market returned to 2008 prices.
People far smarter and better qualified than me have theories of why.
Their theories just don't make sense in my gut.

Now the US Energy Information Administration has this to say about crude prices and Libya:

Crude Oil and Liquid Fuels Overview.  EIA expects continued tightening of world oil markets

over the next two years, particularly in light of the recent events in North Africa and the Middle East, the world's largest oil producing region. The current situation in Libya increases oil market uncertainty because, according to various reports, much of the country's 1.8-million bbl/d total liquids production has been shut in and it is unclear how long this situation will continue. The market remains concerned that the unrest in the region could continue to spread.

Libya and the Middle East unrest definitely has something to do with prices. But they don't have anything to do with a jump like we've seen. A sustain jump indicative not of risk in the future but of a realignment of Supply and Demand needs. Especially a jump that occurs primarily around a single big day of trading when the US market is closed and no really big information has changed the market's perspective. Lets look at prices during that short time frame.

Notice the price spike in this shorter time frame. That was President's day. Or in this chart the day missing between Friday before and the Tuesday after President's day (as our markets were closed). Supply and Demand did not change. Only the volume of people in the market for futures.

My only real thought that derives from this is a need for diversification and true substitutes for petroleum derived liquid fuels.

NOTE: For those who disagree and believe that markets are rationally pricing the risk of a Libyan oil being sucked out of the market here is a list of production numbers showing where Libya is in the grand scheme of things (this being non-academic and provided by a 3 min google search). The new production that has come on line since 2007 I would believe should have offset a good chunk of this. I don't see supply interruptions in my market either leading me to believe there is still plenty of crude available for refining and available tank space for storing refined product (unlike 2006-2008 in my market where there were consistent outages by my suppliers). And again, just my passing thoughts without even close to enough research to really justify a strong argument. This is just my gut thinking.

Congrats to Oregon's Puralytics!

2010-11-18T10:21:00.000-08:00

Beaverton, OR based start up water scrubbing innovator Puralytics is the Winner of the 2010 Clean Tech Open!!! Or as offhanded mentioned in a Portland Business Journal article the Academy Awards of Cleantech.

Glad to see a local company win the Clean Tech Open. Exciting. As a washout in the qualifiers a few years ago its nice to see a local start up take it home.

UofI Biodiesel Education Blog - Gotta Love Jon Van Gerpen

2010-11-11T15:17:00.000-08:00

Univ. of Idaho has a great new biodiesel blog. Gotta love it.

Check it out HERE!

Kholsa Ventures: Food vs. Fuel White Paper

2010-11-07T09:34:00.000-08:00

This is from an old post (Dec 1st, 2008) that popped up in my iGoogle news from the Energy Blog I thought it was worth posting.

A Food vs. Fuel White Paper commissioned by Khosla Ventures the big money championing Range Fuels and the future of ethanol as an investment. Though the biofuels boom has cooled substantially with the recession that started a few months before this paper was published its a good subject matter to keep in mind.

With this white paper in particular there is one other great reason to read it. It lays out a very good description of the Petroleum industries benefits (i.e. subsidy) provided by the US Federal Government's pro oil development policies. If you are an undergrad student doing a research project where you want to lay this out there a great recipe for doing so exists in this white paper.

Its been a few years since I glanced at Khosla's web site. After browsing it awhile there is a lot of interesting subject matter to read. In particular I liked an interview link shown of an OPB interview with Vinod Khosla (the V.C. whose namesake the venture group is named for). A great quote I've pulled out of context about the importance of investing in new technology:

"This has got to be what Nassim [Taleb] calls the black swan phenomena. We have to radically change our assumptions. We are very much like turkeys and as Nassim says in his book, Black Swan, "for a thousand days, a turkey's worldview model is it gets fat every day these humans come out and feed it. Somehow [...] before thanksgiving, it's model changes." We have to follow that model. We have to radically change, and that can happen for the negative or the positive.

We have to shift from extrapolating past assumptions, ignore what economists and econometrics tells us about how much oil we need and when we'll run out and what consumptions will be. Because they are based on the false assumptions. Once those assumption change and technology will drive that change, the world will be different."

So reading between the lines. Convert to Ethanol or get your head chopped off!

Just kidding, I couldn't help but point out the logic. I agree with Khosla quite a bit. Not as boldly as his investment state but still I agree with much of his premise.

Just another story about a homeless man and his Lamborghini.

2010-06-15T06:30:00.000-07:00

So you ever have a friend who has a bad year? Their women walks out leaving them with a house and life they don't want. Well this guy did the only thing reasonable. He sold it all, bought a Lamborghini and traveled the United States for years. If only he solved crimes while doing this he'd have a TV series spun off about it.

Wired Magazine covers it on their website. You've got to read it.

Fisker Auto's $88,000 Plug-In Hybrid and my own random thoughts.

2010-06-14T05:53:00.000-07:00

NOTE: The following post goes all over the place without a specific logic to it other than my coffee induced curiosity and the ability of Google to serve up info.

I noticed in the SIJ website this morning an update about the massive fund raising success of Fisker Auto in its pathway to market for a plug-in electric hybrid vehicle. The price tag hit me though at $88,000. Then I thought back to a few books I read about the invention of the auto industry and the early cost of utility vehicles such as the Curved Dash Olds and Model T.

So I ran it through an inflation calculator (don't ask why I just did). In 1908 the year the Model T came out that would have been $3,584. Not comparably cheap even by early adopter status.

The Curved Dash Olds first sold for $650 in 1901. According to Tom's Inflation Calculator a 1913 Olds selling for $650 would adjust to a $18,895 price tag. Being the low end no frills electric vehicles with no options or safety go for way below this the industry ain't doing to bad.

The Model T first sold for $825 in 1908 and ultimately after decades of engineering excellence by the Ford Motor Company sold at it's lowest as $260 by 1924. To adjust that get's fun for one reason. In 1908 the 2010 value of a Model T was $20,253 which is what a reasonably equipped sedan goes for today. By 1924 you could buy a more reliable and improved Model T for $3,257!

Anyone else see a trend similar to computing power and gasoline power train? That drop in true cost of a vehicle really blew me away. Now lets hope that EV's take a similar pathway in innovation on a far accelerated timeline.

Side note.

The 1901 Curved Dash Olds was the first mass produced cheaper automobile. The pioneering horseless carriage. Its original success beyond hobbyists was its ability to speed up the day for a travelling professional who would not have to worry about a horse. For doctors and lawyers traveling within 30 miles of their home this hugely improved their productivity more than paying for itself as an investment.

I don't have proof of it handy. But while reading one of the better histories of the auto industry they related the cost of a vehicle to the median income in the US at the time. That would place a curved dash at the time it was introduced to being the equivalent of $70,000 today.

It wasn't till 1908 that Henry Ford introduced the Model T and began to focus on ever improved and lower cost vehicles (and of course we saw how cheap he got).

The history of the early auto industry was of visionary engineers and entrepreneur wanting to mass produce cheap vehicles and the bankers, investors, and managers around the industry who demand high end high margin pleasure vehicles (because why would anyone want a vehicle for utility purposes?). In fact the amazing early history of Chevrolet and the founder of GM Billy Durant is one of lower mass markets versus higher end markets. Billy Durant literally swindled his company back from a group of bankers by setting up Chevrolet and trading its stock on the open market for GM stock till he had 51% of the shares back.

Special note of personal perspective. The Oldsmobile ushered in the modern auto industry of the world at the dawn of the 20th century. It also exited business as an auto brand at the dawn of the 21st century. There is a bookend story to be had here if I ever put it together.

Oregon's BETC Reform

2010-06-08T05:18:00.000-07:00

In energy circles Oregon has been well known in the last ten years for it's generous Business Energy Tax Credit (BETC) which offers up to 50% off the capital cost of a project back as an income tax deduction. Better yet if you are a low cash flow start up you can "Pass-Through" this BETC for 35% of face value cash up front. So if you build a $1,000,000 project in theory Oregon will give you a $500,000 income tax break over five years and you can sell this tax break to an investor for $350,000 cash.

Its no doubt one of the greatest deals for project development out there. Throw into that mix a huge clean energy consumer base and utility connection to wheel power to the California market and you've got a strong comparative advantage in Oregon. I know I've done several project that would not have happened without the BETC which have directly created jobs at my family's business. I've also used the BETC as a down payment with a bank as part of financing. Its a great economic development tool but the lack of boundaries on the program has blown up its use. Solar panel manufacturers, wind farm developers, and a few large projects have exploded the dollar figure this tax credit brings.

So in Oregon the Department of Energy (ODOE) has been under fire for the Business Energy Tax Credit taking a large cash draw in the economic downturn. The fact that the alternative energy tax break is primarily being taken by the Wal-Mart, large banks, and other huge corporations hasn't polished its image any either. Corporate welfare is never a great selling point. This causing Oregon's Legislature to push a "reform" to bring down the total dollar figure of the BETC.

First a law capping total dollars came down. Then rules were written to figure out how to stay within the budget. So the rules are set and now is the time to pay attention as any potential new project I may come across will be playing in this new league. Through the recession I haven't had much in the way of project opportunity. Just trying to keep momentum moving forward for what we built pre-2008. Taking a look there are things I agree with and those I don't.

First I don't see any reference to property tax impact of a capital project (and I didn't in the debate during the reform). The local positive impact of these projects isn't considered at all. If the state is losing on the income tax side but funneling more in a much more permanent base of property tax revenues I would call that great policy. Unfortunately the only focus isn't on long term revenues but instead on a single ticket price

I've always thought the controversy of corporations taking BETC's to avoid income tax is over stated. In fact its safe to say if it wasn't for the BETC many of these companies wouldn't have realized the same amount of income tax (then avoided by a BETC) by creative and legal accounting gimmicks to minimize profits in Oregon. I am very confident that the BETC funnels what otherwise would have been money leaving Oregon into capital investments that raise local property taxes far in excess of their real cost to Oregon's general fund.

Now back to the actual reform. One good thing is they moved the one year BETC opportunity up to a $20,000 one year project (meaning I can take a tax credit in one year instead of taking it over five years). Short payback of tax credits is very good for small businesses seeing great years and investing in improving their operation. In the small business community you never know what the next year holds so five year paybacks are a tough sell for a BETC. Better yet, one year is very positive for the type of projects I do with refueling infrastructure which can be kept under $20,000 if we work at it. It's also very good for retrofit projects as well so local smaller scale contractors will benefit from this.

As of right now there is a cap of $300 million in BETC money established through 2011's state budget. Of this $300 million $218 million potential projects has already been pre-certified. So in theory its already spent. But of course it probably won't be close to spent. It begs the question, how does this work that projects take years and are unpredictable and therefore when the BETC vests to being taken might effect other budget years?

There is a Q&A page but it hasn't posted any questions and answers. I definitely have small talk to make next time I run into an ODOE staffer. Just that much more reason to get to local conferences I guess.

To help they have created a "tiered" approach. ODOE shows an under $500,000 project costs, $500,000 to $6,000,000 project cost, and of course an upward of $6,000,000 project. This will be interesting. It does not mention how they will break out the remaining sum of cash between these projects. I also am curious what happens if you apply pre-project, don't get a pre-certification, then start building and finish in a specific time frame. If other's in that tier didn't finish can you take their budget allotment?

Oh well. As with all changes questions and ideas pop up.

Zip-Car for Bicycles

2010-06-07T05:25:00.000-07:00

Here is a cool concept that even the 'nu-uh' scrooge in me loves.

I saw it at Fastcompany.com and think its a great pay it's own way service.

B-Cycle is a large scale bicycle sharing program that just took off in Colorado. This would work really good in the Metro area around Portland. Especially if they had the check out stations at trail heads. For over ten years I've been meaning to buy a better bicycle and never get around to investing the real money it takes. I would jump on this and I know I'm not alone.

In Search of the Factory Equipped Hyper Miler

2010-06-05T10:15:00.000-07:00

Wired Magazine online has a great article about where fuel efficiency will come from. The Federal government is seeking a 34.1 mpg fleetwide CAFE standard for vehicles sold in the US market. Wired reports that the National Academy of Science asked 12 engineers, scientists and industry certified smart people to examine commercially available technologies and their impact on fuel economy.

This report is titled "Assessment of Technologies for Improving Light Duty Vehicle Fuel Economy" and is for sale via the link shown. The website will allow you to skim the document though. Of course that's not assuming Wikipedia or some other site won't have it posted for free sometime soon (I can't wait to see).

What did they come up with? Fuel efficiency has a high capital cost.

But of course doesn't all new technology?

What else did they conclude? That VW TDI's kick the crap out of hybrids (okay I exaggerate their findings). They comment that Hybrids cost around $9000 more per vehicle for a 50% fuel savings and Diesel cost around half that for a savings for 35% so therefore more miles and a longer engine life for less money.

Something I can't see mentioned is the energy impact of these technologies before their life on the road. I would like to start seeing the energy cost of construction of these various technologies. No luck there yet though. Guess only the new fuels are held to this standard while the technologies that harness or precede new fuels aren't judged under this category.

Other note. The Wikipedia post on CAFE standards is worth checking out.

The best simple description of Oil Sands Development I've seen.

2010-02-25T09:11:00.000-08:00

Today I got a call from Energy Today Magazine about our business. In checking into their online addition I came across a few good articles. One in particular goes in depth to the process of capturing and developing oil sands in Alberta, Canada.

An excerpt from Cooperation Needed by Brent Sangster:

The mining and extraction process made a dramatic technological leap in the 1980s when it converted from dragline and bucket wheels to hydraulic and electric shovels that load the raw material (e.g., sand, clay, bitumen) on to massive trucks that today have a capacity of 400 tons.

These trucks transport the material to a crusher, where it is slurried with water before being transported via pipeline to an extraction plant. New technology is being tested here to move the crushing and slurrying operations right to the mine face, eliminating trucks or at least significantly reducing hauling distances.At the extraction plant, the bitumen is isolated from the water, sand, and clay (known as tailings), which are pumped into large containment ponds for settling and eventual reuse. Some unrecovered bitumen and naptha finds its way into these ponds as well.

Tailings ponds are designed to reclaim both the water and the area itself as a natural habitat. But the silts in the mixture can take many years to settle, during which time nearby water sources must be safeguarded from contamination and the ponds must be monitored to ensure wildlife is not exposed.

Technological issues here focus on ways to increase the speed of silt settling, such as using chemical thickeners or centrifuges to separate the silt from the water. Other needed advancements include technologies to remove the residual bitumen, recover valuable minerals such as zircon, and polish the water for re-use.

Just something I thought might be worth finding again.

Thorium the Green Nuke Fuel

2010-01-02T10:01:00.000-08:00

This months Wired has an interesting story on Thorium as a "green" replacement for uranium as a nuclear fuel.

Given the future of the world will be lowCO2 with no emmissions if possible Nuclear power is going to have to be a good portion of our energy portfolio. Anything that helps with this debate is good.

I'm curious to see if shortly politicians start using the word "thorium" to sound smart similarly as they would use "clean coal" a decade ago.

So a Friend Asked: When will we have sustainable biofuels?

2009-11-18T08:22:00.000-08:00

Sustainable biofuels depends on your definition of sustainable.

If you define sustainable as net-energy positive (more energy in than out) than we are there with even basic corn ethanol. The majority of corn ethanol plants produce more liquid ethanol btu's of energy than they cost all the way back to the farm (meaning every drop of energy from the farmers tractor on). When ethanol is considered a net energy loser is when they don't consider the other products made along side corn (brewers mash, corn oil, and other products sold after ethanol is produced). Also sometimes the cost of transporting ethanol to market by truck will make it a little bit of an energy loser.

For the most part corn ethanol is seeing a 20 to 40% increase in btu's of energy created. This is never talked about though as in the late 70's it was an energy loser and the same old expert from the 70's (a guy named Pimitel) still pimps the old out of date methodology that has been disproven. The national news always interviews this dude as the counter-opinion of the biofuels industry.

Beyond corn ethanol on net energy return you've got a whole host of other sustainable definitions. Is the corn a genetically modified organism? Is it a permaculture or monoculture farming style? How much water does the farming deplete fromt the natural aquifer below the farm? What about fertilizer and pesticide wash off of the field? These are the sticky wickets that cause a debate.

And then beyond this technical jargon filled debate is the Climate Change debate. Namely the CO2 reduction opportunity of a biofuel. If the biofuel can't substantially reduce CO2 emmission in the lifecycle of the fuel some don't consider it "sustainable" though it would be renewable and cleaner than petroleum.

Beyond corn ethanol though there are a slough of other biofuel products. Biodiesel in particular is extremely sustainable under any metric or debate. The only issue is that environmentalists hate soy bean farms (but somehow hippys love soy). But regardless if its soy, canola, or waste fryer grease biodiesel is 70% less CO2 (for its whole lifecycle) and has no real concerning emmissions issues. This metric being the goal post set by California recently in their "Low Carbon Fuels Standard" set to combat green house gases in their state.

I would go into cellulosic ethanol or some of the other advanced biofuels like "gas to liquid diesel" but it might be a little to much for you. It will make you sorry you asked.

Unless of course you want to hear more. Then my wife will thank you for distracting me enough to stop boring the crud out of her with this stuff.

Mark

(NOTE: This was an answer to a Facebook question asked in my profile)

2009-11-13T16:17:00.000-08:00

This is a good paper. I wish I had time to read the whole thing.

Calfornia Low Carbon Fuels Standard Technical Analysis.

California Low Carbon Fuels

2009-11-11T15:50:00.000-08:00

So I'm doing simple research on RINs and a potential financial business model. I am looking the world over for a CO2 off-set value for biodiesel and can't find a thing.

Look up the California Low Carbon Fuels Standard though I found some really interesting charts. Though worthless to my project today I felt they were worth posting for posterity.

Below is a chart showing weight and btus. A handy one stop chart.

What is Fischer-Tropsch?

2009-08-29T10:02:00.000-07:00

I had time to browse around for white papers on Google. I came across one with a really succinct description of Fischer-Tropsch. I thought it might be worth capturing for future reference.

Thanks to a group focusing on "Improved Fischer-Tropsch Economics Enabled
by Microchannel Technology"

Fischer-Tropsch Process and Products

The FT process was first developed by Franz Fischer and Hanz Tropsch in Germany in the 1920s and 1930s. The chemistry is based on making longer chain hydrocarbons from a mixture of carbon monoxide (CO) and hydrogen (H2), referred to as “synthesis gas”, at an elevated pressure and temperature and in the presence of a catalyst.

The excess heat generated from the reaction has typically been removed by inserting boiler tubes that carry water. In theory, any source of carbon can be used to generate the synthesis gas. The majority of the products from FT synthesis are paraffinic waxes based on the following chemical equation.

nCO + (2n+1)H2 → CnH2n+2 + H2O (1)

Typical byproducts are liquefied petroleum gas (LPG) and naphtha. After the FT process, heavier hydrocarbons can be hydrocracked to produce distillate products, notably diesel and jet fuels.[

FT derived transportation fuels are typically referred to as synthetic fuels. During the 20th
century, these fuels were derived from coal in situations where petroleum was not readily available, such as Germany in WWII and South Africa during Apartheid.

The white paper of course goes on to describe why its relevant now. Regardless I love how simply this captured the subject. It is also worth note that the paper's focus on micro-channels ain't half bad neither. Oregon State University has some reasonable research going on around micro-channels and its supposed to have a huge potential. Though the promises of a micro-channel biodiesel technology never really materialized as promised five years ago (being it was five years out five years ago).

150 Years of Progress.... Now Time for the Next Paradigm

2009-08-28T07:38:00.000-07:00

Yesterday marked the 150 birthday of the commercial petroleum industry. With Edwin Drake's discovery of oil in Pennsylvania the future of western civilization was moved forward at a speed unpredictable and mind bending. Ironically (a little trivia history) the day Drake struck oil was the day he received word from his backers to pull out and stop drilling.

Wired Magazine and Fastcompany both have tribute mentions on their website.

Usually presented as a force for evil or sinister change the benefits of petroleum have been spectacular. The immediate ability of humanity to harvest the btu's and calories of another geological dynasty has been good to those of us in the U.S.. Bending hydrogen and carbon molecules to our own needs has given us wealth and lifestyles beyond the imagination of any human alive in the 19th century. At the time of the American revolution in fact the wealth and lifestyle of today's American middle class would impress the great monarchs of Europe. From food and entertainment options the wealth cheap power provides is mind boggling when you consider it.

That brings us to what next? I would like to state simply (in honor of the 150th anniversery of petroleum) a hypothesis. That the prominence of petroleum at the center of our civilization is because of two items. One the cost of extraction is so cheap that the product is nearly free in comparison to most other products. Two, the amount of research and development reinvested by the petroleum industry have turned this nearly free btu rich product into the center piece it is to our civilization.

In short, as petroleum costs rise there is no reason other products will not take petroleum's place. In fact the harvesting of biomass and recapture of garbage can provide 100% of our energy in a closed carbon neutral loop. It only takes two things. A little market share for these new synthetic crude technologies as well as 150 years of experiments to bring them along to where petroleum is.

Look them up. Fast pyrolisis, Fischer-Tropsch, thermal depolymerization, and similar variant technologies. All simulating the Earth's geological process that created crude oil by heat, pressure and a oxygen poor environment. Reforming biological materials commonly seen around us magically into a source product for everything we take for granted in the modern world.

Business Model Conept and Thoughts

2009-08-17T07:21:00.000-07:00

Recently with the new Renewable Fuel Standard being promulgated by the EPA and Obama administration (commonly referred to as the "RFS2") a change has taken place. Specifically the creation of carve outs for certain biofuel technologies. Next generation biofuels such as cellulosic ethanol, gas to liquids, and other type technologies are being given set aside market share.

The RFS2 proposes to that the existing Renewable Industry Numbers ("RINs") system and set aside requirements for petroleum refiners and importers to buy a specific amount of cellulosic ethanol and waste to ethanol in their biofuel requirements. With this there is new value attached to cellulosic ethanol. This is coupled with a renewed funding effort by the US DOE, USDA and others to get cellulosic ethanol plants off the ground.

Close to home Trillium Fiber Fuels just pulled a $750,000 grant to build a cellulosic ethanol plant (this after a sizable grant to experiment with various feedstocks about a year ago). But as I look at it I'm seeing some serious bring to market issues with smaller cellulosic plants. Namely that it doesn't make sense to build a host of small commercial scale ethanol plants in regions where there are already idle corn ethanol plants.

The issue I see is the cost of capital, the need to return an investment to this capital, and the fact that if the cellulosic technology is proven it will likely be licensed and integrated right back into the already existing corn ethanol plant. These corn ethanol plants also already have two really important things for a cellulosic ethanol plant. Namely expertise making ethanol to ASTM specification and the ability to place this product in the stream of commerce (no small feat for a sub-5 million gallon plant with no experience).

So here is my thought (and a regulatory question as well). Being on the west coast we need to import our corn and will continue to do so for the foreseeable future. Why not focus on making cellulosic carbohydrate instead of ethanol, Then run the carbohydrate through the already existing corn based ethanol process. Qualify this product as a next generation fuel by carbohydrate volume placed in the process with the corn.

It makes logical sense. This being the method preferred for counting electron when generating green power from solar or wind projects. The real issue is does the EPA trust ethanol producers enough to do so given that there might be a full $1 a gallon additional value in a cellulosic gallon of ethanol.

This raises two questions to be feasible. One is the cost of freight and creation of the cellulosic sugar something that I believe can be managed. Second, will the RFS2 allow a measurement of this product placed in a batch with corn ethanol. Essentially we would create the same debate that exists with ConocoPhillips and their Renewable Diesel process where they add fats into the crude oil pre-distillation at the refinery.

Just some thoughts.

Quote of the day

2009-06-29T10:03:00.000-07:00

"You know a problem has not been solved when there are ten different ways to deal with it."
Chris of
Trillium Fiber Fuels
(speaking on the subject of pretreating feedstocks in cellulosic ethanol production)

Clean Coal Is Back on the Drawing Board

2009-06-14T08:22:00.000-07:00

I suspected coal fired power would be a dead-end over the next four years. According to Wired.com not so much. In fact the Bush Administration's start towards "clean coal" via Carbon Sequestration is being continued with a future-gen CO2 capture project.

Just to get my enviro-street-cred 'I told you so' in as early as possible. How much you want to bet there is a major MTBE type problem with Carbon Sequestration that the brilliant engineers, chemists, and policy wonks failed to see? I just see deep well injection of anything and expect either sci-fi style earth quakes or Green Peace fundraising aquifers being effected.

I don't have any scientific basis for this. Just experience and a gut feeling. Critics please remember that I'm usually on the other side of this tech debate. Regardless, something about CO2 Sequestration just doesn't fit right.

Scientific America has a good article which does a great job of explaining the subject simply and in depth. What separates this deep injection method is the capture and mineralization (note: I don't know if that's even a real word) of the CO2 with surrounding geology.

A snippet from the article that gets right to the point:

The storage seems to be long term as well; the sequestered gas doesn’t just sit in the rock waiting for a chance to escape. Over decades it dissolves into the brine that shares the pore space or, over longer time spans, forms carbonate minerals with the surrounding rock, Hovorka notes. In fact, when she tried to pump CO₂ out of her test site using natural gas extraction techniques, the attempts failed completely.

It's is an interesting science. But I see the more promising technologies being an approach to use the CO2 productively as a resource. I don't see dumping CO2 underground ever surviving as a long term strategy.

The activists and policy people I've met would fight this approach as hard and long as any other industry approach to simplify a reduction in pollution. Capture or dilution rarely are acceptable to true environmentalists. The only solution they accept (and the only one usually settled upon) is ultimately less pollution period.

This is a short term approach that no-doubt will work for petroleum and natural gas producers. Beyond those with capital experience in drilling deep holes though I don't see this as anything close to an acceptable solution for CO2 reduction by 2050 (the target year I hear policy wonks pointing to).

Trolling bout Biodiesel

2009-06-07T11:38:00.000-07:00

I saw a new press event for Propel Biofuels on the Biobased News site.

It seems like its been years since I've heard about Propel. I remember a few years ago they were poised to move forward boldly. Infused with V.C. cash and processing something more than that (a company chalked full of people filled with ability). They also had an awesome grasp of where to take the biofuel market to and therefore a compelling pitch to go with their business.

But after spending several hundred's of thousands of dollars building the best biodiesel infrastructure around Seattle their expectations didn't materialize. Of course nobody's expectations in the field did either. Now they are back pulling earned media and I like what I see.

Why do I like it? One self indulgent reason. Its the same argument and effort that I am making in Portland. I think they are correct except they are failing to see the real value in their business and intellectual property (which I will keep to myself). Its good to see your own logic and marketing packaging elsewhere.

Sunday thoughts about Automakers BK

2009-05-31T10:26:00.000-07:00

As GM crawls towards what others describe as unavoidable bankruptcy I am drawn to the historic figures of US auto industry founders. How would Henry Ford or Billy Durant have handled this crisis.

The more I speculate the more sure I become of the answer. Their actions would be like that of the tech Mavens of today. They boldly would stand up and demand more of every member of their team, their supply chain, and ultimately move the entire industry forward surfing the wake of crisis. They would have stepped forward welcoming competition, harsh medicine of the downturn, and would have cast their lot with the American consumers needs. Their solution would be simple: Progress!

Progress in my definition is simple. More for less. Less cost, less impact, and in turn the creation of more value.

What is the need of the American auto consumer. It is a simple three prong test: Stylish function, bottom of the market cost, and reliable utility.

That is the secret formula used first by the Oldsmobile as it built market share at the dawn of the automobile. Again it was the secret strategy of Henry Ford in his quest to displace the horse with his ever less expensive Model-T. As well it was the come to market strategy of all other car makers gobbling up GM's lunch since Billy Durant launched his own come to market coup with the Chevrolet. Again, ironically the comeback of Chrysler was marked by this same strategy in the 90's and is why Kia is still a safe bet for dealers who picked up the brand as they pursue it today.

Unbelievably the pundits blame it on fuel economy and the lack of demand for their cars. Though it isn't demand that's dried up in the world. Its credit, income, and of course crude oil's availability. Who doesn't want a H2? Only the social sensibilities and excess pull back this shinny toy of the wasteful urbanite.

I can't help but notice that Toyota, Honda, and Nissan manufacture huge SUV's and full size toy-hauling pick-ups. The difference is their market share make up not their Environmental credentials. Again we come back to affordable, stylish, and reliable.

Look at the markets. When you buy American and inexpensive your purchase reminds you of your income. Your options smack of cost cutting. The upgrade also is substantially different as well. Japanese designers on the other hand provide a consistency with value.

The Japanese hold their consistent come-to-market units true to their roots. They offer a middle ground to their consumers.

EV Car Event in Portland

2009-05-31T10:00:00.000-07:00

If you are a friend or customer let me know if you want to attend. I've bought a table for this event.

Mark

Please mark your calendar.

The Future is Electric

The Electric Vehicles Revolution.

The Potential and Possibility of the Emerging Electric Vehicle Technology.

YPOP Breakfast of Champions

7:30 AM

June 16th, 2009

University of Oregon in Portland

70 NW Couch Portland, OR 97209

Look at your cell phone. If we could scale the amount of power and efficiency possessed by your phone’s battery into a Prius it would triple the fuel economy of this existing car technology immediately. That is the potential of Electric Vehicles and why they are the talk of policy wonks and politicians everywhere.

Profound moves and big personalities are at work to establish Oregon as an international leader in the emerging industry of Electric Vehicles. Though Oregon has been hit hard by the recession, it is still an exciting time to do business in Oregon and this industry is one of the brighter spots in the economic outlook. Find out why.

This event will showcase the potential and possibility Electric Vehicles hold in the near future. From new technology companies emerging in Oregon, to those innovators who plan to manufacture the parts and pieces the industry will need, and of course Oregon State’s effort to build a network of rapid vehicle charging stations throughout our state in the next two years.

Our speaker Chris Bakken is a leader in the field of electric vehicle recharging stations and battery technology development. As the President and Chief Strategy Officer for SynkroMotive he will share with us the profound potential of electric vehicle technologies from his perspective within the industry.

Space is limited so please RSVP through YPOP. If you want to guarantee a seat, table sponsorships are available for $100 and come with seven reservations at your table. A continental breakfast will be provided thanks to our generous sponsors.

Thursday Morning Thoughts

2009-05-07T08:01:00.000-07:00

I have worked hundreds of trade shows, events, and other public outreach efforts. I've also spoken at dozens of conference and before trade associations as well. All pushing forward the largest obstacle to biofuels. A lack of awareness that an alternative to petroleum existed.

The common first question from some one actually driving a truck for a living was always the same. "Is it cheaper?"

To which I always answered "No, it's worth to much to sell cheaper than diesel."

The low price falacy.

Price. This being the common question and qualifier of the opportunity for any fuel. Whether it was always, everyday, consistently cheaper than petroleum. Other than on a small scale, this will never happen though. Because as we add biofuels into the on-road gas and diesel market a wonderous thing happens. It applies a further downward pressure on petroleum prices (MORE ON THIS LATER).

In fact I've had hundreds of conversations around this subject. The consistent critics who claim there is no market for anything if it is more expensive. That premise of course conflicts with everything around us. Most of all energy.

Every time you pull into your neighborhood gas station there is almost always someplace cheaper within a reasonable distance. Every time you pull into a gas station you are presented with regular, midgrade, and premium gasoline. If cheaper is a requirement to exist in the market how does premium gasoline exist? This argument always throws the "experts" and academics for a loop.

I realized the above argument off the cuff once when having lunch with a college professor who was supposedly an expert on algea and therefore biodiesel. Right from the begining he started pontificating about the fact that there was no future for biodiesel or ethanol unless it was substantially cheaper than petroleum. That without algea production we never could be cheaper than petroleum. And given that algea technology was "five years out" our market development efforts were a waste of time until algea came on line.

You should have seen the look on his face (and the smirks on the rest of the table) when I pointed out the fuel market already respected premium products.

But this price argument is made often and everywhere. Its an odd argument you see most forcefully in technology circles. That the next great paradigm shift is only "five years out" and all efforts today are a waste of time. But of course most of these technologies have been five years out since the Carter Administration.

Probably the biggest place the energy curmundgeons get away with false price examples is utility scale electrical power. In the beautiful land of the Pacific Northwest hydro electric power delivers the cheapest high quality, low carbon, power to the entire west coast. In Portland a retail consumer is paying under $.10 a kw with all taxes.

This price tag is often cited as why diversifying to "clean-tech" options is doomed to fail. Given the fact that the depreciated cost of solar and wind power cost as much as $.30 a kw. But this is false math failing to see the reality of this market.

Hydro power is a battery. We can spill water through a turbine at any time and realize that power at will. Hydropower in essence is the long establish, paid for, holy-grail of energy. Readily available, when we want it, no additional impact, and low CO2. Every drop of this cheap power is worth a thousand times the price tag.

The true price of power floats on a market. In the summer when Los Angeles and San Diego are sucking power for air conditioning this hydro electric power is worth much more on the open market than $.10 a kw. In fact its worth more than $.30 a kw. Therefore the water saved by wind and solar power is a cheap buy as it allows low carbon hydro electric on demand for no additional cost to the system. No sudden opportunity cost.

The same argument holds for areas reliant on natural gas or coal fired power plants. Every additional kilowatt flowing through the system, if operated efficiently, is that much less capacity for the power plant. That much bargaining and gaming opportunity for them to manage their cost of fuel. To save it for when the market truely recognizes its highest and best use.

Also worth mention again is the compound flaw in the low price falacy. The fact that biofuels are more expensive than the dirtier mainstays of our economy does not mean they don't make sense on a price basis.

By diversifying beyond just coal and petroleum we do something very critical. We push a downward pressure on these CO2 intensive fuels. We in turn lower their price when they are their most expensive. The few stretches of time a year that natural gas or coal fired electricity is stretched to its limits these renewables maintain a cheap addition to the power mix.

There is a word for this behavior. A commonly accepted strategy in all things but the energy debate. Diversification. The balancing of a portfolio in order to reduce volitility and therefore maintain stable, predictable and therefore a better result.

OPIS Newsflash on Land Use Impacts of Biofuels

2009-05-05T16:39:00.000-07:00

Well its a better argument than the one's we faced with Food vs. Fuel. Its logical and seems to be more results oriented. Hopefully this is a fair debate that moves us beyond the bullet-statement and bumper sticker arguments around ethanol.

From OPISnet.com

BIOFUEL GROUPS CONTINUE TO OPPOSE INDIRECT LAND USE INCLUSION IN RFS

Industry sources continued this afternoon to sift through the voluminous 1,004-page notice of proposed rulemaking for the expanded renewable fuels standard (RFS) that U.S. EPA issued this morning, but it appears as though while biofuel advocates appreciate the establishment of the Biofuels Interagency Working Group, they still oppose EPA's inclusion of indirect land use (ILUC) in the agency's establishment of lifecycle greenhouse gas emissions.

As passed under the 2007 energy bill, the 36-billion gal/yr RFS is broken into four segments: a capped corn-based ethanol requirement of 15 billion gallons by 2015; 21 billion gallons of the overall mandate contains "advanced biofuels" by 2022, with 16 billion gallons of that amount, under the same timeframe, from cellulosic biofuel. For the fourth carve-out, up to 1 billion gallons by 2012 is required to be from biomass-based diesel.

Meanwhile, conventional biofuels would be required to emit 20% fewer lifecycle greenhouse gas emissions (GHG) compared to gasoline, while "advanced biofuels" would be required to emit 50% fewer lifecycle greenhouse gas emissions and cellulosic biofuel would be required to emit 60% fewer emissions.

In this morning's notice of proposed rulemaking, EPA included emissions from ILUC in its lifecycle requirements, much to the chagrin of the biofuels industry. Biofuel groups, agricultural academics and some lawmakers had asked EPA to delay the ILUC requirements until there was a generally accepted method for determining the regulation.

"If you look at the direct impact of ethanol, from the production of the grain to transportation to the facility to the process of making the ethanol to transporting that to market, there are significant benefits to ethanol over petroleum," about 61% lower than petroleum fuels on average, said Renewable Fuels Association President Bob Dinneen, speaking on a conference call with reporters earlier today. However, "there is so much uncertainty" when trying to factor indirect effects, he said.

Additionally, the proposed ILUC requirements are not being uniformly applied, since there is no similar provision for petroleum production, Dinneen noted. "You'll see no international indirect effect of petroleum applied. EPA should've looked at this when they were creating the baseline. They are willing to count the number of angels on the head of pin for biofuels, [and] they ought to give more than just a cursory look at petroleum production," he said.

But Dinneen said he was pleased EPA would specifically be soliciting scientific feedback and peer review on the ILUC proposal.

Similar comment came from other biofuel groups, including Growth Energy, POET, the American Coalition for Ethanol (ACE), Biotechnology Industry Association and Brazilian sugarcane trade association UNICA.

"As evidenced by the recent debate over the low carbon fuel standard in California, biofuels are greatly penalized by these preliminary calculations,"
said UNICA Chief Representative in North America Joel Velasco. "We know sugarcane ethanol has the lowest carbon emissions of any liquid biofuel produced today. California recognized as much in its low carbon fuel standard.

We are certain that when the EPA considers the best available data and research, these indirect land use effects from sugarcane cultivation in Brazil will be marginal at best," he added.

Meanwhile, the National Biodiesel Board said that a final EPA rule on indirect land use changes "that is based on questionable science and is structured in a manner that restricts the role of sustainable vegetable oils in the program will make it nearly impossible to meet the Advanced Biofuels goals established by statute," according to NBB Vice President of Federal Affairs Manning Feraci. "Hopefully, common sense will prevail in this process and the EPA will issue a workable final rule that is based on sound science and allows the U.S. biodiesel industry to make a positive contribution to the RFS2 program," he added.

Brian Jennings, executive vice president of ACE, said he was pleased that USDA Secretary Tom Vilsack will be co-chairing the Biofuels Interagency Working Group along with the heads of DOE and EPA. "I think this means ethanol remains at the table for the president's energy policies moving forward, despite the political desire of some to box ethanol out. I think the working group will ensure that fossil fuels are finally examined along with biofuels in these LCA [land use change] assessments," he added.

The Natural Resources Defense Council (NRDC), meanwhile, is pleased with the inclusion of the indirect land use provision. "We must develop biofuels the smart way, and we are encouraged that EPA Administrator Jackson has offered a science-based proposal to get this done," said NRDC's Nathanael Greene. "The opportunity to review EPA's proposal will help ensure that developing biofuels won't mean using our most fragile forests for fuel and that biofuels provide real benefits. We plan to submit comments on what EPA has gotten right and what must be improved to make sure the outcome serves our environmental and energy needs," he added.

While both the American Petroleum Institute and the National Petrochemical & Refiners Association were still reviewing the proposal, they are concerned with the availability of biofuels that will be needed under the RFS. "While NPRA looks forward to commenting more specifically on the proposed guidelines, the questions of commercial viability, product liability and the lack of adequate scientific review with regard to mandated increased quantities of ethanol remain unresolved," said NPRA President Charles Drevna. The association said it trusts "that EPA will seriously and transparently consider the concerns raised by fuel, public health, environmental, and engine manufacturing interests as it proceeds toward finalizing guidelines for RFS implementation."

Similarly, API spokesman Karen Matusic said it is "surprised and disappointed" that EPA, in relying on industry information, believes there are sufficient plans underway to build plants capable of producing 100 million gal of cellulosic ethanol in 2010 and are therefore not proposing to waive the requirement for next year. "The waiver criteria is not 'plans to build,' but is 'projected volumes of cellulosic biofuels production," she noted. "Information readily available to the government clearly shows that very little cellulosic biofuels will be produced in 2010," she added.

Meanwhile, anticipating that ILUC would, in fact, be included in EPA's proposed rule, U.S. Sen. John Thune (R-S.D.) introduced legislation last week that would direct EPA to only focus on the direct lifecycle greenhouse gas emissions in its regulation. Speaking on the conference call this morning, Dinneen said these and other congressional efforts are separate from EPA's peer review efforts and aren't likely to be withdrawn.

Once EPA's proposal is published in the Federal Register, the agency will begin to accept public comments for 60 days. Meanwhile, EPA plans to hold a workshop on June 10-11 at the Dupont Hotel in Washington, D.C., to present details of the lifecycle GHG analysis included in the proposal.

For more information on the proposal, visit:

http://www.epa.gov/otaq/renewablefuels/index.htm#regulations.
--Robert Gough, OPISnet
--Rachel Gantz, OPISnet

Monday Morning Thoughts

2009-05-04T07:37:00.000-07:00

Power; what is it?

Whether its political, physical, or electrical. Power is the ability to drive some result. It is a stored ability to take nature into the logical hands of humanity.

It is also the ability to bring the inanimate to life. To turn hot into cold, cold into hot, and move water up hill. Power is magic. It is the march of civilization forward. Power is energy.

Push your car down the freeway at 75 mph for 15 miles and tell me its not worth $2.50 gallon. The wealth of our world, your standard of living, the hope for a brighter future are all tied to petroleum. And therefore all power be it financial, political, or industrial is founded on the btu's of energy contained in a barrel of crude. The power of the future will be whatever source the next btu we burn is harvested from.

The power represented by petroleum though is by default. Its for lack of a competing option. This lack of a discernible 'silver-bullet' substitute gives rise to a real conundrum of those looking ahead.

Enter the logic of Peak Oil. The well quantifiable reality that there may not be any more oil to tap. That we have peaked (or will soon peak) the world's oil reserves and though demand will continue to grow the resource to extract will become further and further from our ability to harvest it.

This shouldn't be scary. It shouldn't be something to worry. We have developed, built, and invented our way out of scarcity before. Why is it now that it seems like there is no route to more?

Part of my motivation to write this is in response to the Peak Oil arguments of doom. The fact that the future is a dynamic opportunity for human improvement. The reality that in the past the only time that the most talented among us couldn't move beyond an obstacle was when institutions conspired to maintain the obstacle. Usually not on purpose, but none the less well meaning assumptions influenced rules, laws, and direction away from innovation..

For those of you who are familiar with Peak Oil I place before you an unfamiliar argument. That its not a big deal as it relates to our standard of living. That with cheap oil gone our standard of living will not be effected and though petroleum costs will rise I am confident that the American standard of living will not be substantially eroded in the short term. The rapid need for communal gardens, composting toilets, and the 'End of Suburbia' will not drop suddenly on the world's doorstep.

Instead I offer a competing view. That we will sacrifice quality of life and needlessly develop petroleum resources that in the future will be worth far more than the btu's they represent today. That western agriculture, industry and lifestyles will hit these higher prices like a speed bump. Unless we embrace a more dynamic and wider reason for diversifying beyond petroleum instead of a bleak future it will just be less bright than it needs to be.

If Peak Oil is a reality it will not be the end of western civilization. The full weight and creativity of the western Capitalist system will move rapidly to maintain the value and market position of its invested capital. Not to mention the well established standards for fuel, energy, and infrastructure regulated by government with petroleum products in mind.

Sunday morning thoughts

2009-05-03T10:35:00.000-07:00

Why is petroleum in everything? What caused this?

Crude oil and petro-chemical refining having become the ancient-buffalo of our modern existence. The critical sustainer of our people. Its often mentioned but rarely considered. How has it grown to dominate as the most important touchstone of every bit of Earth's technology?

A barrel of crude petroleum has 42 gallons. In this barrel more than 42 gallons of useful products is fabricated as they crack, reform and construct the most useful components of 21st century life. The petro-chemicals that make us modern. Like magic, more is made with less every year.

Why is there such a drive to push every petroleum molecule further in its use to our civilization? Or better yet - How! How is it that from acrylic fabrics, to the plastics everywhere, and the power that drives the creation of everything around you is derived from a barrel of crude?

Little is considered about how. How this creative expansion of the hydrocarbon successfully moved us thousands of years into the future in a matter of decades. That in one generation many families that actually relied on horses progress forward, defining a show of wealth by horse power under the hood.

Why did it rise to prominence as a source of heat, transport and power? How did it become the touchstone of what separates the iron age with that of modern history. Petroleum is the critical difference between a coven of scientist debating the moon and an actually cadre of scientists flying forward to touch the moon's surface. All propelled upward by the brilliance the hydrocarbon allows us to harness.

The answer of course is easy. There was money to invest. That with each additional barrel came a complex issue of what to do with it. As money was made an obvious opportunity existed to make more with every unused molecule that came through a petroleum refinery.

First there was kerosene, the whale-oil replacement. Then there was gasoline, six grades of diesel, and then the chemicals beyond that. As the most brilliant and well funded researchers in the history of the private sector went to work so rose the prominence of oil.

But in easy answers there is a complexity. How to recreate it. How do we move beyond petroleum?

That is the question of our age. Just as the Dark Ages saw a quest for the Holy Grail where empires and nations gambled generational fortunes. We now face a new Holy Grail, a quest to replace the oil we burned yesterday before tomorow arrives.

Most look at oil's rise as a motor fuel. Its was cheap, readily available, and in such large quantities no one could ever fathom. The density of its energy content was superior to any solid or gas fuel of it's time. And then there is the reality that a liquid is easy to engineer systems to handle with ease.

There is also how clean it was at the dawn of modernity. Compared to wood or coal it significantly reduced the effort to handle and maintain.

As an example we can look at one simple example. That of heating oil.

Look at the evolution of heating systems. In the early part of the 20th century it was wood and coal that heated the boilers, furnaces and stoves in the US. A system that required regular stoking to maintain inefficient and unequal heat. Regular cleaning to keep the system from wearing itself out as the coke and ash unevenly wore on them.

Enter oil heat. A liquid fuel, delivered into a tank, moved to the furnace by a pump, capable of being fed in a controlled manner enabling the addition of a thermostat. Better yet, on a cold winter morning you didn't have to start the furnace's fire by hand. You just turned the system on. Talk about modern improvement.

Now look at the business model that drove oil heats rapid adoption in the US. It wasn't just the superiority of the technology but one other ingredient. Superior technology rarely alone moves an industry forward. It is another factor thrown into the market place that does so. The need for partners with a wider stake in a technology's success. Distribution.

Those who sold coal, wood and sawdust to residential heating customers had to deliver the products. The delivery of a solid like coal or wood took a man with a strong back. Hard work all day every day. It was these small vendors of heat that revolutionized the market.

If they could convert their customers furnaces from a solid fuel to oil heat they would just pump a product into their tank. This is where technology progresses. As the sawdust and coal delivery companies swapped out the burner on the existing furnace upgrading them to oil.

Shortly after developing oil heat markets these same companies expanded offering other oil products as well. From gas stations to motor oil supply. They were partners with oil refiners in serving, building, and expanding the use of their products. A long expanded chain of small businesses that grew with America and established the standards that now define the petroleum business today.

And this is where the difference exists. The difference between petroleum's dominance as a required element of all products and other potential substitutes. Petroleum is the easy substitute of what came before. It also provided growth to these partners in supply.

Petroleum's history is one of research and development driven by cash flow. It also has developed deep penetrated niches around its products. I question the logic of a paradigm shifting technology. Petroleum didn't build its dominance by shifting paradigms. They did so by building a small niche that made sense. Rapidly building market share within that niche. Then leveraging that success to further research and develop its next value added product.

Petroleum has not been an industry of energy, heat or transportation. It has been one of inventors and marketers who provide solutions to other industries they serve. If you take this perspective and look around you see plenty of next-generation technologies already being used.

Understand that the future is all around - its the politicians, academics, and drive-by-policy that now stand in the way.

Oregon Startup makes Biobased News

2009-04-23T06:35:00.000-07:00

Diesel Brewing hits the biz wire.

I've never heard of this start up before but I'm intrigued. In particular butanol has a real promise to be used in biodiesel production as well as a gasoline blend stock. As it relates to biodiesel the butanol can be used as the alcohol in the transesterfication process.

Primarily methanol is the alcohol used. When butanol is used supposedly the gel point of the biodiesel drops significantly below 0 degrees.

Their formal website is http://www.dieselbrewing.com/

I neither endorse or am familiar with anyone associated with Diesel Brewing. I just saw the news and thought it interesting.

VW Golf - World Car of the Year

2009-04-13T06:12:00.000-07:00

The 2010 Golf is named "World Car of the Year" by a panel of journalist and auto industry folks.

The real good news in the story I saw at Wired.com though. Its coming to the US in diesel. Now the only issue will be whether or not it can handle a blend of biodiesel higher than B20. The latest clean diesel VW's have an oil dilution issue with higher blends of biodiesel. It occurs where the particulate trap on the vehicles must maintain a temperature to burn out particulate. With B99 biodiesel it doesn't fully burn all of the fuel in the particulate trap depositing this residual fuel into the oil pan of the vehicle. This dilution should not cause issues with the actual wear on the engine if the fuel is ASTM spec (this according to a presentation I saw from a VW engineer discussing their engines). The issue becomes engine lights go off requiring an oil change between 2,000 and 3,000 miles (as the oil pan fills up over capacity).

I saw it first in a recent issue of Biodiesel Smarter magazine (a insiders type zine dedicated to sustainable biodiesel news). By far the best biodiesel trade magazine you will ever find. Dedicated to B100 and B99 market development.

I'm curious to see how the industry deals with this. My bet (and this is a bad thing) biodiesel enthusiasts will just disconnect their particulate trap. This creating a conflict not just with OEM's and biodiesel users but also the EPA and local regulators.

OPEC wants cheap oil.... Hmmmm?

2009-04-12T08:39:00.000-07:00

Saw the analysis at MSNBC online from a month ago. Not exactly timely but something jumped out at me that will alter my perception of what the future might hold.

OPEC tried on Sunday to nudge oil prices up by urging its members to stop overproducing, but the cartel decided not to cut current output levels which could have driven prices sharply higher. Explaining the decision, OPEC Secretary-General Abdalla el-Badri spoke of his organization's concern over "ugly" global economic times that overrode the desire to achieve a quick fix by setting a lower overall output for the 12-nation producer's club.

First off, I'm thoroughly entertained that a roughly $50 a barrel and $2+ gasoline is considered "Cheap" by today's standards. Two years ago it was not.

I know. Everyone got used to a $200 barrel of crude being a realistic price. Regardless, I remember making biodiesel and ethanol pitches back when diesel was expensive at $0.75/a gallon and being told that no one would ever buy a biofuel unless it was cheaper. And oil would never trade wholesale above $1 a gallon.

I remember one time on-road diesel with taxes hit $1.28 and customers called to complain wanting to know "HOW" it was possible that prices could swing so high (it was caused by a sudden shutting down of the Olympic Pipeline into Portland by regulators because of safety issues).

My how we've changed our definitions and expectations. Me included (I get really nostalgic at times for a high price of oil being $15 a barrel back when I started at StarOilco).

Oh how life was easier in the oil business when I was empowered with an Economics degree and so much certainty. But enough of the simple past - the future has much more potential and a greater opportunity with those with open minds and strong backs.

Also add to this that OPEC likely has not forgotten that this is not "cheap" but a dream-boat of oil pricing and acceptability. If the harshest international recession of the last 80 years leaves the bottom of the market at $50 barrel of crude they will be very happy with this new economic picture for oil.

This is the real point of my post. Calibrate your instruments. $50 is the new floor for the foreseeable future. If the price of a barrel of oil starts trading below this number there is a change in the economic numbers that set prices.

If I was a practicing economist I would try to set up an experiment to determine volumes of ethanol, biodiesel, renewable diesel, syn diesel, and other fuel volumes as they effect over all pricing of petroleum. It would be fun to try and create an easy factor of volumes of substitutes (even if they trade at a surplus cost) and their effect on petroleum prices.

Given the US's energy position in the world not only as a consumer but market that sets prices you would likely be able to just use EPA and DOE numbers to run such an experiment. I would treat the measurements much like the Federal Reserve tracks the money supply. With an E1 for only petroleum refined products sold, E2 including immediate blendable substitutes including mandated blends, and an E3 and E4 for moving to wider industrial substitutes such as hog fuel, and experimental fuels manufactured outside of the main streams of commerce.

There has been very little talk about this (other than by the ethanol industry). To me this is the future of the debate. If only I could simultaneously work and be an academic. Ahh, the dream. Being able to actual focus on the bigger picture without the requirement of betting correctly with your own money.

The Future Looks Electric

2009-03-28T12:40:00.000-07:00

Electric Car that is.

If you ever doubted the effect of political resolve in the direction of the US energy just look at the very recent and profound changes I'm seeing with the current Obama Administration and it's current "Stimulus" monies floating around.

In the span of a month electric cars and infrastructure went from a P.R. play thing for electrical utilities to an audacious effort by Oregon's Governor. Last week I started hearing rumblings of a big effort out of Oregon Department of Energy. It seems to be moving big in this direction with the announcement of a 500 recharging station goal in the next two years. More to the point is that in Oregon the cost looks like it will be under $2,000 to field your own recharging station with the grants, tax credits and other offerings in Oregon's planning.

Wired Magazine covered Shai Agassi's vision for an electric car infrastructure. It's talked about, glowingly received, brainstormed, and then just kind of out there. Add a few billion dollars of Federal political resolve and BOOOOM! The electric car is a reality.

Now lets just see if Tesla, Chevy, and Nissan can deliver their electric cars.

I am really intrigued and interested. I have a few friends who have been betting big on electric power-trains, battery controls, and importing foreign I.P. around this sphere. Before last week I never really thought about the market potential for electric infrastructure. Specifically recharging station.

That has now changed!

My gears have really been spinning about how this market development will need to take place and I'm fascinated. In particular how do you charge for the refill of the vehicle (which current technology will likely take 2 hours). You have a capital cost to recoup, the variable electric bill to charge for, the space (which takes hours per customer), and of course how do you scale a regional, national, or international system so an electric car owning fleet can recharge simply in NYC, LA, or PDX regardless?

This moves the business model away from just electric recharging stations (on a real scale) to be a business model that fits with a traditional regional petroleum jobber. Those wadding away from one-off customers to a wide deployment are now wadding into my waters.

Its really got me thinking about the future of the markets I serve and its an exciting subject. It really reminds me of dealing with early supply issues of Biodiesel and Ethanol. Where those without any fleet supply experience were trying to build businesses without any context or understanding of their market's needs.

Its going to be fun over this summer.

EPA and RIN's Clearing House

2009-03-02T11:11:00.000-08:00

OPISnet reports a turn of events around RINs (so did a recent RINstar webinar).

It looks like the EPA will be creating (or at least proposing) their own RIN clearing house. We don't know what this clearing house will look like but of course I'm pretty pessimistic. Guaranteed it will be brought to the industry by the same folks who invented the DMV. Hopefully I'm being a little over dramatic but that's just my gut instinct.

My initial thoughts on this was that you can tell the Obama Administration would be abandoning the market based approaches of the last eight years. Good for CPA's bad for the industry is my prediction.

Natural Gas vs. Diesel

2009-03-01T12:36:00.000-08:00

It's happended for the first time in a while. Diesel is competitive with natural gas.

Wholesale diesel is under $1.20 a gallon which places it below retail natural gas at over $1 a therm (or $10 per million Btu). If you buy gas look at your utility bill. Its significantly cheaper to go oil for the first time in four or five year.

I don't pay attention to Nymex Natural gas costs but I understand those are way down. That's good sign for commercial users buying their own gas and paying the utility for delivery. Regardless for a heating oil distributor like myself this might be a ray of sunshine in a recession as the smaller dual fuel boilers and heating oil customers see value in staying oil.

Heating Oil at $1.20 a gallon is cheaper than natural gas.

$1.20/ 131,000 btus = .000009160305344 per btu

.000009160305344 x 100,000 btu's per therm of Natural Gas = $ .916 per therm equivalent

Future Fuel TV

2009-03-01T10:09:00.000-08:00

About a year ago a TV crew from SyndiKast came to Portland to cover the retail biodiesel market in our city. Their project was called Future Fuel TV and the finished product was really good.

They also created a video which I think is a real good time-specific look at what Portland's biodiesel market was like a few years ago. Right before Portland's B5 mandate and the optomistic growth of voluntary adopters.

SyndiKast covers the gamut of biofuels and alternative energy. They produced the segments to be good stock footage as well as a good primer on the subject.

You can see SyndiKast website on biodiesel (I don't believe they have the finished video up currently).

Some more of my thoughts on Food vs. Fuel

2009-02-19T09:25:00.000-08:00

Please consider a few thoughts I regularly mention when presenting on biofuels and the food-versus-food debate is brought up by someone who simultaneously thinks that biofuels are a net-energy loser but somehow agriculture is more energy positive without it.

Propose the question: "Where does ethanol come from?"

Corn carbohydrate.

Or to be exact something likely to be processed into corn-syrup (a process that takes energy as well) and then sold as a cheap filler to real food. This processed food being most aptly described recently in the book In Defense of Food as being a "food-like-substance".

The only thing sustained by corn-carbohydrate in the US is diabetes. Corn protein on the other hand is highly sought by any agricultural process feeding animals. The corn mash is the real value of corn and it is preserved in the process passed along as a value added good to feed lots.

Ethanol allows a growing corn market with a safer off-take partner in our vehicles appetites versus that of the low-price-leader junk food manufacturer. It also provides more high protein for the market with a wider future market mix for this agricultural input. In short, I don't weep for Lil Debbie's price pressures at my local 7-Eleven.

The next step, sustainability, is to improve our process. Reduce the inputs of petroleum fertilizer, water, and ultimately CO2 emissions while increasing our productivity. To reduce the inputs while maintaining or growing crop yields is the definition of wealth creation. This is the crux of business sustainability and the 'Lever of Riches' presented to us by the new clean tech movement afoot. Making more with less and improving the overall quality of life for those at every step of the value chain.

In the past the focus has always been on more. More calories, more weight, more yields. Now we must focus on quality and ethanol gives us a floor to work with. A floor for the transition from MORE to BETTER.

I realize that there are many who see no value in American mainstream Agriculture. They only see mono-crops, GMO's, and a spendthrift approach to consuming inputs in the ever expanding welfare state of Corporate farming. I on the other hand tend to look at modern American agriculture similarly as to how I consider the Egyptian pyramids. A giant monument of what human ingenuity can achieve. Overlooking the issues of human bondage and destruction these monuments to Pharaoh ego represent. Between the pessimist and optimist positions there is a huge middle ground of progress that can be achieved.

Food versus Fuel is the definitive issue of this middle ground. Where today is not a position of optimum results but it is definitely worth building upon. Progress can be had and I believe that ethanol moves us further towards a total better result than a farm and energy policy that doesn't include it.

Purdue's Library of Sustainable Energy

2009-02-18T19:25:00.000-08:00

Purdue University Extension has put together and launched a website on "Renewable Energy" which showcases a great collection of information.

I really liked was the collection of simple and easy to read information. Purdue seems to even give Wikipedia a run for its money on some subjects. I really like the platform of PDF's and whoever put this together did an awesome job.

If you are doing research on the subject it provides a great resource in one place. I would rank this collection of information up there with the Oregon Environmental Council and Northwest Biofuels Association similar efforts. One difference though. Purdue covers new ground.

I don't agree 100% with what I've read so far. Regardless, Purdue's website is worth the bookmark!

Cascade Grains Files for Chapter 11 Protection

2009-02-17T10:26:00.000-08:00

Its been a rough few months for the ethanol industry. First with falling commodity pricing washing away the protective assumptions of a hedged position. Then a recession reduced fuel consumption further reducing not only the price of gasoline but the mandate blend usages expected in Oregon.

To compound this Cascade Grain also shipped some product with (from what I've been told second hand) ASTM spec fuel that exceeding a sulfate content that threw the ethanol out of specification use by a major refinery selling E10 gasoline to retail users. This same (less than reliable rumor) source told me that the cause was the well water used in the manufacture of the product which had sulfur in it to begin with .

(NOTE: I have no idea if the above is true this is all second hand information that sounded plausible enough to post. If incorrect I will gladly pull this down and apologize).

This being reported in far less detail as part of the Chapter 11 story in the following news papers.
See it in the Portland Business Journal, Seattle Post Intelligence, an AP mention in the Oregonian (where I first saw the story this morning) and the local community to the plant the Longview Daily News

The best reporting on the subject is the local Longview Daily News. I recomend reading that first.

Algea from city waste. A common idea actually going forward.

2009-02-17T06:09:00.000-08:00

In biofuels there are few unique ideas. What really constitutes a breakthrough (much like artistic projects) isn't the concept but finding a patron to move a project from the drawing board to demonstration.

Reuters UK reports a Dutch experiment going forward. Dutch biotechnology firm Ingrepro is the project developer moving waste streams into biomass.

"The waste of biomethane (biogas) plants has very rich nutrients left over. At the moment they just pump it to the river or throw it away -- but we say next to these biomethane plants you need to build algal ponds to grow biomass."

What I like about this is the co-locate with an existing methane recovery program. The fact that you already have an existing successful energy project sweetens the deal. In a future where CO2 off-set projects are going to be looking for easy to utilize methane to capture I see this as a nifty model to move algae projects forward as well.

So if the capital costs of a algae project are covered by an existing methane project with experienced technical staff capable of managing an algal operation that only leaves the cash value of monetizing the algae biomass. Ingrepro claims their market will be jet fuel.

Tesla Motors is on Track

2009-02-16T06:45:00.000-08:00

It looks like it might really happen for Tesla Motors.

Wired Magazine's blog shows a teaser photo (shown above) and quotes the CEO Elon Musk as claiming that they are on track to be delivering vehicles shortly as well as providing electric power-trains for other auto manufacturers. This delivery of real, live, operating electric powered cars in turn making them profitable before the end of the year.

Looks like its either time for doubters to double down their negativity bets or start getting as excited as the rest of us.

The Babe Ruth of Soy Beans and a Story of Competitve Corn Growing

2009-01-18T12:20:00.000-08:00

I've been meaning to put this Wired Magazine article up for over a month.

Here is a great story talking about real industrialized commercial agriculture. Its rare that you get a lay person's article about mono-culture agriculture and what they are wrestling with. The perspective touched on here is one worth reading.

Especially looking at the every expanding productivity of US soil, seeds, chemicals, manpower and on the ground intellect that is our mainstream agriculture.

One excerpt that really gets to the heart of the new development of GMO crops that caught my eye is below.

Cullers never went to college, but he rises at 3:30 each morning to study plant genetics online. Right now, he's urging Pioneer to genetically weave a bit of stiffening fiber into soybean stalks. Cullers plants 300,000 soybeans per acre, double the national average. In these super-dense fields, he explains, soy plants grow taller, fighting for sunlight. "They fall down a lot," he says, "and you lose photosynthesis. The trifoliates don't pump nutrients to the beans. And you get disease, too. It's crowded and humid out there, down low."

Something about it reminds me more about the development of a race car with experience in the Pit rather than the further development of an agricultural crop. This is obviously engineering with a specificity reserved up till now for mechanical systems not organisms.

NOTE: To those who are adamant and hostile to GMO. I understand, I've seen and read both sides of this debate in depth for years. Being on the sidelines and outside of the issue I am an agricultural agnostic. I do buy certified organic and local food as a rule as well. Please don't flame me just because I gave ink to what I view as a relevant article.

Oregon a Geothermal Power Wild West

2009-01-08T06:12:00.000-08:00

Yeah I know. The title is a little bigger than the real article linked below. Either way I like using "Wild West" any time I can.

I am not as familiar with Geothermal power as I would like. Regardless its kind of outside the main buzz and gossip circles for biofuels, wind and solar power here in Oregon. I've never met a single person developing or involved in any way with a geothermal project. Though again and again I here from other sources (such as the Oregonian the most blunt of industry reporters) that Oregon is poised to be a player in geothermal projects.

Over the weekend I cam across an interesting Oregonian article from back in April. It just kind of popped up while I was looking from an article I had just read in the print edition. Thought I would share it. The best portion is a simple description of what geothermal power really is:

Modern geothermal power plants are more efficient than past versions. They draw hot water from the ground, using it to heat another fluid -- often isopentane -- that turns to vapor at a lower temperature than water. The isopentane vapor drives a turbine, which spins a generator to produce power. Afterward, the isopentane cools and condenses back into liquid form so it can go through the heating cycle again. The water, meanwhile, is reinjected into the ground to be reheated again.

Unfortunately the article does not talk about the specifics of what makes geothermal profitable. What the scale required would be. And of course other types of harnessed uses. My old trusty Wikipedia on the other hand has a little bit more and a few promising links. But no real discussion of cost of production and the capital cost of building a plant.

Well it looks like this advertising concept won't have the staying power we expected this year.

2009-01-07T09:00:00.000-08:00

Oregon Transmission Lines

2009-01-06T09:49:00.000-08:00

I came across this really good statewide image of Oregon's wind resources and transmission system (thanks to the 25x25 Coallition). The transmission system being a critical item to refer back to from time to time. With all this talk of potential actually having a road to market is even more critical than if the wind blows, the tide rolls, or the sun shines.

Whole Energy in the News

2009-01-05T06:48:00.000-08:00

My Google Alerts shot back an interesting article. Reading it I see one thing at play. Atul and my friends at Whole Energy have walked head first into a political hornets nest.

"They always try to put it on consent," said Mark Stechbart, outspoken biodiesel plant critic. "They hijacked a 12-year-old environmental impact report to gloss over the issues. I don't think Whole Energy has the finances to do this. The city is buying into a real bad fiscal situation. If they believe this is a legitimate thing to do, they should have known about this months ago and had a full public hearing. It's another midnight, last-minute (Mayor Jim) Vreeland deal."

It looks like there are powerful players in this project rooting for their failure in an effort to take political swipes an the Mayor responsible for getting their project into place. I know talking with Atul and Kevin from Whole Energy this project is a huge opportunity and a ripe project. They describe the facility and the community as the best opportunity they've seen. I wish them luck. The west coast will need more product and I know the bay area is very interested in waste stream biodiesel.

Check out the complete article here.

My Opinion of New Gas Taxes for the Sake of New Taxes

2009-01-04T10:31:00.000-08:00

Wired Magazine (as well as many others) are advocating for a motor fuel tax increase. Or in Wired's words:

We've already shown we can live with gas at $4 a gallon (less than half what some European countries saw during the price spikes last summer) without inviting the apocalypse. That pretty much shoots down the argument that people won't stand for higher gas prices. And, as Time magazine notes, an increase in the gas tax could be offset by a cut in the payroll tax, which has a far greater impact on our pocketbooks, anyway.

This argument (because we can afford it) is a horrible way to build a consensus around energy. Often referred to as an Apollo Project like grand marshaling of effort. That is what the US and world need now. A grand wide-ranging effort.

This argument though is unconvincing to me. In fact its the height of ivory tower belligerence in my opinion. As someone who has taken the bad debts of bankrupt businesses recently unable to cover the cash flow needs of high prices I differ about how "we can live with gas at $4" compared to those disengaged with the actual customers of this product. Its hard to justify a tax simply to improve the policy goals of our government in conflict with the actual cost of operating effect of small business and the low rungs of our economy.

Seeing the impact of $4 a gallon heating oil to my elderly customers it is painful. It hurts emotionally and stuns me reconciling my own belief in the free-market with a desperate want of an affordable option for these customers impacted. When you need to talk to trucking companies and other industrial diesel users with decades of good credit history now struggling to pay for the fuel cost of operating requires a tough choice on my end is also equally as hard.

High energy prices is dangerous and hard. It is not something we can live with. Especially if its just to tax and then spend. We need an actual policy. One that doesn't solely raise prices but allocates the incentive for a diverse, domestic, and sustainable portfolio of energy.

Our energy shouldn't be that high prices are okay. Our policy should be as inexpensive as possible with an ever improving requirement for reducing impact. I have no doubt that we can have extreme-low-impact energy at a cost far below $4 a gallon. All it takes is more competition and improved technology.

To move our energy infrastructure forward is not the job of a gas tax. A Btu tax maybe. A CO2 tax probably. Those would allow the market to support long range innovation and more importantly a wider/smarter grid to allow for more players. These would work if the money was directly placed in off-setting the Federal tax deductions for utility and refiners investing in new capital and infrastructure. Regardless of what tax though it needs to be evenly distributed on those sources of energy that come from outside North America and bolster an incentive for new locally produced energy.

A gas tax to rebuild infrastructure for gasoline users. That I agree with if it is connected (users of roads paying for improved roads is good policy). The real catch is that legislators (be they Federal or State) don't connect a $1 or revenue with a $1 of infrastructure. Even when mandated usually the added revenue gets sucked up by the Administration of departments long before it sees the laying of asphalt or raising of bridges.

Don't fall for those knee-jerk taxation lovers looking for an angle for any more revenue to dole out. Ready, shoot, aim with the US tax code will not move us forward. Likely only backward. Without a clear results oriented policy taxes rarely accomplish anything but more special interest involvement restricting further progress.

Oil Execs on the Future of Energy Costs

2008-12-11T08:18:00.000-08:00

Reported at the Environmental Leader

See the graphic below. The study was based on in-depth phone interviews with more than 50 oil and gas professionals, most holding C-Suite positions at petroleum companies with annual revenues of $100 million or more.

Of note to me. The low number of petroleum executives that believe petroleum is a sustainable energy source. I would really like to know what the motivation for this answer would be. The environmental sense of "sustainable" in reference to CO2 and impact on the environment or the actual long term production (meaning that they can sustainable keep pumping oil out of the ground keeping up with the actual demand for the product).

Usually when oil and gas people talk about sustainability they talk about actual production. Sustainable production is keeping up with demand. So they usually refer to petroleum as a sustainable fuel. Contrast this with environmentalists who refer to "sustainable" as meaning little or no impact on the environment.

I also see this as an interesting contrast with the feelings about US energy independence. If Oil is not sustainable what would be there belief for energy independence? I would assume biofuels development or maybe just something else (those in energy tend to look at technology as an open ended box of hope).

Are these execs saying 'it'll all work out some how' or do they have a consensus inside the industry about an expected future for US energy.

The Future of Algea - Off-Take Production

2008-12-02T10:48:00.000-08:00

The future of algae is finding someone willing to pay you to play with it.

I've talked to dozens of start-up entrepreneurs with dreams of phytoplankton business. All these business models with the hopes of developing a new crude oil for the next century. The "crude dreams" of oil production from an endless uber-productive super-algae that would feed the humanity protein as well as feed our insatiable vehicles carbohydrates distilled into ethanol and fats reacted into biodiesel.

The big issue though. How do you pay for the capital cost of a algae bio-reactor? The device that will take water, light, CO2 and make the bugs into an industrial input. Will angels and VC pay for the magical devices that will make algal goo. This goo in turn being cut, distilled, processed, reacted and made into the endless variety of products that we currently source from petroleum.

Deep pockets in this market though are tough to come by. What is now looking apparent is the need for someone already paying to deal with algea. A current cost stream begging for a better solution.

One such industry is commercial fish farms. To that end I came across a recent article that caught my eye. Though this is not a unique idea its still one to watch. What makes it innovative is the fact that the technology might actually work. In the word of biofuels technical talk is cheap and demonstration is worth millions in Federal funding.

From an article from Greenbang.com:

Under PetroSun’s BioFuels Aquaculture Lease Programme, participating farm operators would receive a rent incentive and monthly royalties in return for access to their pond algae. In future, farmers could also gain additional benefits from a carbon credit program, the company said.

PetroSun (a leader in algae technology in the US) has announced what I would call an interesting and very viable business model. To co-locate with fish farms that have an algae maintenance concern. Instead of these farms paying the internal cost to deal with algal growth they will get a return for partnering with PetroSun to create value from the biological reality association with commercial aquaculture.

2008-11-22T18:19:00.000-08:00

"We need not to be let alone. We need to be really bothered once in a while. How long is it since you were really bothered? About something important, about something real?"

-Ray Bradbury

The Pickens Plan on 60 Minutes

2008-10-27T10:50:00.001-07:00

"We are at war with no guns with energy."
- T. Boones Pickens

Share/Embed

I saw the 60 Minute piece online. It is interesting and bold. The big new idea I'm hearing is a Federal push to build an energy infrastructure much like the major Freeway projects of the 50's. A modern new backbone for wind and solar power to plug these resources into.

By pushing for wind power and new grid infrastructure to plug into this would free up the necessary natural gas for on-road vehicles and freight mobility. I'm hopeful and like the conversation this is spurring.

Dark Humor in the Ethanol Industry

2008-09-30T10:11:00.000-07:00

Give this analyst an award for most colorful description of VeraSun Energy's financial condition:

"Last week, ethanol producer VeraSun Energy (VSE) announced it put itself up for sale after blowing its brains out in the corn market."

The article came from SeekingAlpha.com

OEM Made Glycerine Based Coolant Announced

2008-09-24T17:54:00.000-07:00

Back in about 2002 I was told by someone the real industrial hope for glycerine was as a coolant.

That with a little creative chemistry glycerine can be formed into Ethelyn Glycol the main ingredient in antifreeze-coolant used in many cars. Upon hearing this I asked a friend of mine who is a turbologist (a lubrication engineer who deals in automotive motor oils and chemicals) what he thought. He told me back in the 30's and earlier glycerine was used as a coolant additive so it was plausible.

And so I wait to see this big savior for nonfood grade industrial off-take to arise. Finally I see a report of a product.

Cummins Filtration (the filter division of Cummins Engine) has rolled out a glycerine based coolant. Cool stuff to say the least (yes pun intended). I saw the original story at the Biobased News.

A Man, His Business Model, and a Paradigm Shifting Approach to the Electric Car.

2008-09-23T11:02:00.000-07:00

From Wired Magazine. An interesting and thought provoking idea coming our way from Israel (a nation no doubt distinctly aware of where their economy's petro purchase dollars flow).

Driven: Shai Agassi's Audacious Plan to Put Electric Cars on the Road

Here is the story in a nutshell. The issue with electric cars in the short term is a full large-scale deployment of support. Not just complete with recharging stations but also battery swap out facilities if you need a fully charged battery on short notice for a longer range trip. Also critical is support of fully delveloped and existing auto manufacturers to support electric vehicles. (See diagram below)

So in essence its the story of the Hydrogen Car but with technology immediately available today, full OEM support to roll out electric cars, and a product horizon of the near future.

Its doable and no less audacious than any other major idea drawing investment, support, and political advertising photo-ops right now. Its a little more complex than T. Boone Pickens' concept of converting vehicles to natural gas (an easy process) and much simpler than a Hydrogen Economy concept talked by the do-nothing till next decade crowd in opposition to most other proposals.

As viable as the smart-grid ideas pitched as the future, hydrogen refueling concepts pushing for funding, and of course the next-Gen biofuels emerging right now. I like what I'm hearing and I think that its something that would likely draw funding and support. In particular if Government and Utility groups stepped up to support this concept like they've done other experimental technologies in the past.

Also worth note, an Agassi quote from the article:

"I thought that the greatest problem of our time was oil. Oil on one hand is polluting the land, and on the other hand it's financing terror."

I trust those who are motivated by a perspective that moves them outside the normal box of concept. I don't trust those who are thinking big concepts to make a billion dollars. Though its a nice goal it breaks the focus away from true success of the technology and the recipricol partnerships necessary for a billion dollar business to thrive.

I am a capitalist personally so I don't trust those motivated that government is the sole solution either. But I do find an amazing pool of ideas and concpets trickling up from the End of Suburbia entrapanuer set. I don't believe in peak oil but I do find common ground with the perspective that imagines a world without oil and attempts to develop solutions that in their own right could compete with petroleum.

Shai Agassi is a leader of a logical framework I hope to see more from. An architect for the future that right or wrong will probably wring real additional wealth and value from technologies already with us and never applied in new directions. This is the definition of progress. Ideas pushing envelopes.

NOTE: I use this blog primarily to organize my reading, thoughts, and reactions over time. Complete with the tags and other background links. This is a little less than timely but I wanted to ensure I had it up for sake of finding it again.

Oh How they Forget

2008-09-22T06:44:00.000-07:00

Sawdust a.k.a. "Biomass" was a common heating and boiler fuel in the Pacific NW. Very common. You can see the remnants of these hoppers and belt systems attached like skeletal remains on older buildings. They exist all over the older parts of Oregon. Which makes the following story reasonably funny.

From this week's Wallowa Chieftan Article:

"On Friday, Sept. 19, the first-ever biomass boiler system to be installed in an Oregon School District will be the subject of a much-anticipated gathering at Enterprise High School. The ribbon-cutting, dedication and tour of the facility will take place from 1 to 3 p.m., and the public is invited to attend."

Its funny when high-tech is really the fuel of yester-year with the additional controls of a computer aided combustion and recirculated exhaust gas improving the efficiency and emissions of the fuel. But of course the argument would be - it's new to them.

The sign read: "This is Not a Concept Car"

2008-09-21T10:41:00.000-07:00

The return of the VW Turbo Diesel.

Hybrid mpg efficiency with Century Old technology. Thank you Rudolf Diesel and thank you VW for the long awaited return.

I was driving past a VW dealership in Salem, Oregon and what did I see? A vinyl covered new VW Jetta TDI which said along its panels "45 mpg This is Not a Concept Car."

I've been waiting and now it looks like its finally about to arrive. Now lets just hope that Honda, Toyota, Subaru, GM and Ford all follow through with their own suggestions of small sedan clean diesels. I could only imagine what a Subaru AWD wagon would do for Biodiesel if it rolled out with a high efficiency clean diesel engine.

Now the only question is..... Will it be for under $25,000?

Google and Distributive Wave Power

2008-09-16T08:40:00.000-07:00

This is interesting. Google has not taken its success for granted and has invested its historically unique opportunity to move many great ideas forward. This one leads the pack in my opinion. The paring of one technology with a whole business model. I could really see this providing some strong reliable technology to many lesser developed nations. An interesting concept to say the least.

I saw it first at a favorite E-Newsletter of mine the Environmental Leader

"The floating data centers would be located 3 to 7 miles from shore, in 50 to 70 meters of water. If perfected, this approach could be used to build 40 megawatt data centers that don’t require real estate or property taxes."

The E-Leader cites Data Center Knowledge as their source with a more in depth discussion of Google's plans to make containerized data centers.

Almost A Month

2008-09-16T08:38:00.000-07:00

It's been almost a full 30 days since my last post.

This summer has been good to me and bad to this blog. I've been busy with a friend of mine running for the legislature all I've focused on the last bit here is getting a good man in office.

That and I was lucky enough to go as a volunteer for this year's Cycle Oregon which was an amazingly enjoyable vacation. I heard it described by one of the cyclists as "Five Star Camping" which I must agree. A greater vacation I doubt can ever bee had.

Mark Fitz

Gizmodo Solar Posts Worth Reading

2008-07-31T20:33:00.000-07:00

I bounced over to Gizmodo and saw some interesting mentions.

The above is an apparatus that stores solar power into a fuel cell system. It would allow a more efficient storage sink for power than your standard inefficient battery. This idea is not a new one but being it looks like a marketable product moving to production. That being actually being worth mention as a new twist (an elegant idea making it to market).

Tranluscent solar panel windows. The above isn't the most cost effective technology today but the concept has been talked about for as long as I've been aware of solar panels. So prior to my ability to type this ideas been floated around as the future of solar. Cool to see in reality. I'm sure their are installs off the grid where this makes perfect sense though.

Fuel Milleage Throw Down

2008-07-28T13:58:00.000-07:00

VW Jetta TDI vs. Smart Car vs. Toyota Prius vs. Ford Focus

http://www.youtube.com/watch?v=46nMnCt75qI

This was a cool piece to watch. Being a big VW TDI snob I was excited to watch the Jetta beat the Prius in all real driving conditions (grandma getting milk once a week is not real driving in my opinion). I also was dissatisfied with the maintenance concern of the vehicle cost. The Ford Focus would likely beat all vehicles concerned in the first 100,000 miles. The Jetta if you extend the period beyond 200,000 miles.

Regardless. It was worth watching.

Biodiesel and Warranty

2008-07-25T14:29:00.000-07:00

After quite a bit of work Nikola Davidson and the Northwest Biofuels Association pulled off policy for biodiesel with the new car dealers here in Oregon. Good job on Nikola's part. Any progress is good.

Please find attached a joint letter from the Oregon Auto Dealers and the Northwest Biofuels Association regarding biodiesel warranty protocol for auto dealers. This letter was created in close collaboration with Oregon biodiesel distributors and the hope is to replicate this in other states (tailoring it to reflect the needs of those members).

The next step will be distributing this letter to all the Oregon auto dealers. The letter is also available to download from NWBA's website: http://www.nwbiofuels.org/biofuel-resources-biodiesel-engine-warranties

This has taken longer than expected but I think having the auto dealer association's buy-off is worth the wait. Thanks for your input and support - Nikola

Nikola H. L. Davidson
DirectorNorthwest Biofuels Association
206.389.8660
www.nwbiofuels.org

Ethanol Industry Responds to OPEC

2008-07-21T06:24:00.000-07:00

OPEC's members and official spokespersons have been claiming publicly for a few month now that ethanol was partially to blame for high crude oil prices. The ethanol industry has responded to these claims from the oil producing nations by taking out an advertisement explaining their perspective (ad shown above).

That perspective being simple. Ethanol increases and extends petroleum supplies and that existence in the market place puts a downward pressure on petroleum prices. Additionally (my words not theirs) its my impression that the Ethanol Producers are also implying that ethanol will soon be a real competitor for petroleum worldwide offering choice.

I saw the initial story at the Biobased News and followed it over to the RFA's Press Release.

The groups –- the Canadian Renewable Fuels Association (CRFA), the European Bioethanol Fuel Associations, the Brazilian Sugarcane and Ethanol Industry Association (UNICA) and the US Renewable Fuels Association – were answering the charges by OPEC that ethanol was in part responsible for the soaring price of crude oil, a price that will fetch OPEC nations more than $1.2 trillion dollars this year alone.

Also worth noting is the advertisement's citing of the Merrill Lynch study which claims that ethanol's effect on prices is downward. As without ethanol the world's petroleum producers would need to produce one million additional barrels of crude a day. The price effect of ethanol in the marketplace is believed to reduce overall crude prices as much as 15% according to the Merrill Lynch report.

PMAA's Thoughts on Ethanol by Pipeline: Think About it First

2008-07-16T09:04:00.000-07:00

PMAA reports an advisory on ethanol by pipeline.

When thinking about biofuels and market subsidies its always fair for the biofuels industry to point out that there are large barriers to entry which raise the cost of operating a biofuel distribution business. One of the largest of these being access to the most efficient transportation mechanisms used by the biofuels industry. Namely pipelines and barges.

As fuel prices rise and the fungible considerations of ethanol and biodiesel as blendstocks for refined petroleum products the need for barges and pipelines to allow the movement of ethanol and biodiesel blends becomes much more significant. Though South American nations have been moving ethanol by pipeline for decades the US market is hesitant (probably because of issues South American markets saw decades ago). This conversation though is positive for ethanol in particular.

See the PMAA's news piece below:

DOT ISSUES ADVISORY ON TRANSPORTING ETHANOL AND BIO-FUELS BY PIPELINE
The U.S. DOT’s Pipeline and Hazardous Materials Safety Administration (PHMSA) has issued an advisory to pipeline operators on the potential dangers of transporting ethanol and biofuels by pipeline.

PHMSA advised pipeline operators that the transportation of batches of ethanol or other biofuels, including petroleum blended product in existing pipelines, may lead to internal corrosion, stress corrosion cracking, and a reduction in the performance of seals, gaskets and internal coatings. PHMSA advised pipeline operators to conduct risk analysis, monitoring, and controls as needed to move ethanol and biofuels safely through pipelines.

PHMSA is also requesting that pipeline operators conduct spill response planning for ethanol and bio-fuels products. The advisory said that PHMSA is willing to work with pipeline operators that plan to transport ethanol and bio-fuels in existing or new regulated hazardous liquid pipelines in order to better assess the risks these fuels pose to critical infrastructure.

PHMSA is asking pipeline operators for 60 days notice of intent to begin regular commercial transport of biofuels in pipelines. PHMSA asked pipeline operators to provide information on how pipelines will be prepared for ethanol and biofuel service, the anticipated blend concentration and batch frequency, additional emergency response planning and spill response plan revisions required, and plans for ongoing monitoring of pipes.

PHMSA said it will use the notice period to conduct a technical review of the operators' plans and provide feedback if necessary.

GM Supports the Expansion of E85 Pumps

2008-07-15T06:08:00.000-07:00

GM has recently become a champion for ethanol in the US. Not just a positive PR when its useful type supporter of biofuels but a full on advocate. Most recently I just saw a news report from Bloomberg where GM and the National Governor's Association will work together to get an expansion of available E85 pumps throughout 15 US states.

This is more than just talk from GM its actual market development. They aren't just developing E85 flex fuel vehicles they are also making lower cost and domestically made ethanol a real option for consumers attracted to their vehicles.

2008-07-09T13:27:00.000-07:00

Bureaucracy defends the status quo long past

the time when the quo has lost its status.

- Laurence J. Peter

Jatropha Comes to the US

2008-07-08T09:25:00.000-07:00

This is the first US agricultural story about Jatropha I've ever seen where farmers where actually growing it commercially. I will be interested to follow this as farming in the US can get very political.

At this years Sustainable Biodiesel Summit in Florida the very prominent biodiesel expert Dr. Shaine Tyson had some very strong words to say about Jatropha being a poisonous and dangerous crop. That any biofuel crop which didn't provide more food along with energy was a bad policy decision.

From Orlando TV News WESH

LA BELLE, Fla. -- For drivers in Hendry County, expensive gas prices may no longer be a problem.

Residents of the small county in southwest Florida have turned to a farm to grow their own oil to survive the difficult economic times.

"We wanted to find a solution to a problem in the U.S.," said Mark Dalton, owner of Dream Fuel, LLC. "With the rising demand of fuel worldwide, we wanted to create our own fuel."
Farms in La Belle have been busy growing Jatropha trees. Jatropha is widely considered the newest and greatest source of biofuel. The tiny trees produce small, green fruit which contains the vital oil-bearing seeds.

"It's grown in Brazil, China, India, Guatemala, Africa," Dalton said. "In many places all over the country, we're behind in producing Jatropha oil."

Many see potential in Jatropha's ability to stave off the high demand for oil, but it would take an exorbitant amount of plants to make a dent in the worldwide economy.
"It basically takes 20 pounds of seed to make one gallon of Jatropha oil," Dalton said. "So, you would have to grow quite a bit of it."

Farmers especially have been hurt by high gas prices.

"We have tractors that sometimes go through 120 gallons of fuel a day," said La Belle farmer Byran Beer.

On the verge of a recession, farmers need any help they can get. Now, Jatropha can be grown, processed and used in the tractors.

"Hopefully, with technology and enough people's inputs, this thing will really turn into something," Beer said.

To produce the alternative fuel, Jatropha plants require a tropical climate to flourish, such as the one found in southwest Florida. Farmers in Hendry County have planted nearly 1 million Jatropha trees, Dalton said.

"We're seeing good results," he added, "but there's still a lot of unknowns."

FTC Ruling on Biodiesel and other Renewable Diesel Fuels

2008-06-30T21:57:00.000-07:00

I came across a document that I thought was interesting. Rather than save to my desktop I figured this blog would be a better place to save the file.

The Federal Trade Commission promulgated a rule around the labeling and standard for biodiesel and "biomassed based diesels" (a description I have never formally heard referred to before).

Biomass-based Diesel Defined From the Rule Making:
Biomass-based diesel means a diesel fuel substitute produced from nonpetroleum renewable
resources that meets the registration requirements for fuels and fuel additives established by the Environmental Protection Agency under 42 U.S.C. 7545, and includes fuel derived from animal wastes, including poultry fats and poultry wastes, and other waste materials, or from municipal solid waste and sludges and oils derived from wastewater and the treatment of wastewater, except that the term does not include biodiesel as defined in this Part.

This is significant for two reasons. One, I never knew that the FTC had any part in the labeling or distribution of fuels. Second, this is the rule I recently saw mentioned by a PMAA newsletter about new biodiesel labeling requirements.

See the rule making here.

New ASTM Spec for Biodiesel

2008-06-25T08:28:00.000-07:00

I heard about this first last week when my friend Nicola Davidson of the NW Biofuels Association called to tell me she voted on the subject and it passed.

A new better standard for biodiesel ASTM has come through. Now hopefully the Original Equipment Manufacturers (commonly refered to as OEM's in the indsutry) will finally embrace biodiesel.

The first official news story on the subject I've see came from Fleet Owner Magazine's e-news letter. See snippet below:

After five years of research and balloting, ASTM International D02 Main Committee has approved three sets of biodiesel specifications that alternative fuel advocates hope will generate increased automaker and consumer enthusiasm for biodiesel.

The approved specifications are: changes to the existing B100 biodiesel blend stock specification, finished specifications to include up to 5% biodiesel (B5) in the conventional petrodiesel specification, and a new specification for blends of between 6% biodiesel (B6) to 20% biodiesel (B20) for on- and off- road diesel.

Biogas - The Biggest Biofuel You've Never Heard About

2008-06-25T07:27:00.000-07:00

I came across yet another story about gasification of garbage for electricity. It seems like these stories are multiplying in direct proportion with the falling US dollar and rising commodity prices.

It's funny. These days as diesel is predicted to move to over $6 and $200 a barrel crude is considered in many circles to be a safe bet not a speculation there is some real change in the market place. Here is the perfect storm that green-policy wonks have dreamed of and techno-futurist investors have bet on and the market is bouncing a little off the mark predicted.

What is fascinating is that in this world of higher prices we aren't seeing the biofuel media darlings (both loved and hated dependent on the story) ethanol and biodiesel. These two fuel plugging along with state leve RFS's, a Federal RFS, and a few voluntary adopters in the marketplace. But their roles seem defined by the mandatory blend policies.

The real technology move I'm seeing more and more of is biogas and syngas. At conferences, in press releases, and in passing conversation the new-new-thing seems to be bending compost heaps and exhaust gases to the wills of breakthrough technologies.

Taking several forms of technology I see this being the real paradigm shifting technology coming along. As agricultural operations of all sizes, utilities, and carbon off-set projects set their sights on these projects the technological applications, efficiency and proven return on these projects should put these in the mainstream of industry.

Of course mainstream in commercial applications puts this technology just outside the sexy-factor needed to get mentioned in political stump speeches. Either way, its exciting to see technologies like this come on strong.

For more on the subject check out Wikipedia's listings which are a good initial primer on the subject of what pops up under the energy slang word "Bio Gas":

Gasification
Syn Gas
Anaerobic Digestion

McCain Proposes Federal "X-Prize" for Electric Battery Powertrain Vehicles

2008-06-23T15:54:00.001-07:00

John McCain goes all Portland, Oregon on the campaign trail. (See BizJournal for more info or JohnMcCain.com for the actual press release).

This seriously sounds like a left-coast proposal right along with the X-Prize for cars. The real question is why $300 million, why not other prizes, and what business does the Federal government have in offering a prize?

John McCain Will Propose A $300 Million Prize To Improve Battery Technology For Full Commercial Development Of Plug-In Hybrid And Full Electric Automobiles.
A $300 million prize should be awarded for the development of a battery package that has the size, capacity, cost and power to leapfrog the commercially available plug-in hybrids or electric cars. That battery should deliver a power source at 30 percent of the current costs. At $300 million, the prize is one dollar for every man, woman and child in this country -- and a small price to pay for breaking our dependence on oil.

I guess as long as it doesn't benefit a sitting special interest group John McCain can throw out pork with a straight face like the rest of them.

Having participated in a few government Request for Proposal (RFP) processes in the past I really don't see this making real sense in practice. Though on the stump it obviously has some real positive ring to it.

What I do like about it is the trust that if given incentive the free market will provide the solutions. Of course, when the Feds offer the prize instead of the free market it sorta destroys the logic of this effect though.

Congo uses Palm for Economic Development

2008-06-23T11:12:00.000-07:00

The Republic of Congo plans to set aside part of its arable land for biofuel production. Congo has 8.2 million hectares of arable land, with less than 15 % of this land being cultivated. Three companies have asked for about 1.75 million hectares to plant palm trees for biodiesel.

Reported from the World Energy Global News Summary

Notice the 8.2 million hectares of farm land with under 15% in production. The interest in biofuels likely attracting foreign agricultural management, technology, and know-how to Congo. This is the first story of its type I've seen around Palm Oil. Usually its not called "arable land" but rain forest in a story.

We also see this in corn production in the US. With the additional market floor for ethanol it has given rise to more corn planted, harvested, exported, produced into food, and of course more ethanol. This side of the story is rarely discussed in stories about biofuels. Fortunately they don't call idle farm land in US set-aside "prarie" or "range land" when discussing using it to produce energy.

Usually the story pointing to any biofuel feedstock production assumes not a larger over all yield from a nation's resources but a zero-sum game as one of something means less of something else. Its to bad we don't see the truth about how the future of sustainable technology must focus not on cutting the pie in smaller pieces but instead a bigger pie with fewer inputs relative to the growing pieces.

That has been the past of the technology and should definitely be our focus for the future. There is also a large direct relationship between the wealth of a nation and its preservation of nature and environmental quality. No doubt a more productive Congo would be an overall greener Congo (though this is a very argumentive assertion on my part as many very green friends of mine have had this debate for years).

Solar Power Compared to Standard Utility Cost

2008-06-19T10:00:00.000-07:00

The Environmental Leader provides this easy to read chart on solar cost and expected utility rates.

The source for this information is a Utility Solar Assessment Study released recently by Clean Edge. (NOTE: I have not read the study yet)

Major Automaker Listens to its Customers Wants. Toyota Rolls Out the Plug-In Hybrid

2008-06-12T06:21:00.000-07:00

Hippies with six-figure incomes rejoice..... Your Christmas list has been written for you.

Shocking as it may be. Toyota is rolling out a plug-in hybrid. The retro-fits have long been popping around the Internet (Google having paid for retro-fits to show its viability). Well now its officially on its way.

Whats even better. Toyota is talking about the future with this vehicle. That future being a need to radically reduce the cost and ability of current lithium-ion batteries (see quote below).

"Reaching those goals will require bringing down the cost of lithium-ion batteries, which currently cost $1,000 per kilowatt hour, according to Tom Turrentine of the Plug-in Hybrid Electric Vehicle Research Center at UC-Davis."

Battery technology now entering the big-leagues when it comes to power-train Research and Development. This meaning that its official - the automobile's internal combustion engine is going through a totally new evolution.

See the full article at Wired.com

Gulf Oil CEO Speaks to Gasoline Retailers about Peak Oil

2008-06-11T08:04:00.000-07:00

When a leader in the gasoline wholesale and retail business starts talking Peak oil it is a different world. See the article below.

A quote you don't see every day:

"While the company will not take on "green" fuels to save the planet, it will do so to gear up for a world beyond petroleum"

Mark the record books. $4 a gallon was the magic number for gasoline prices. The world began to talk completely different the moment gas hit that price.

From the Convenience Store News:
Gulf Oil CEO Reflects on Evolving Brand

During his keynote speech to Future Forum attendees, Gulf Oil President and CEO Joe Petrowski outlined his predictions for the energy industry, and why they have led the company to emphasize service and become more than just a petroleum distributor to its more than 2,500 retail partners.

"We have to, as an industry, prepare for a world without petroleum," he said, noting that the world is seeing a long-term structural shift in the energy market, which is resulting in the record prices for crude oil. On top of that, the world is running out of inexpensive oil.

"We do not have the technology today or access to cheap oil," he explained.Petrowski predicted high oil prices to continue, with a long-term floor of $60 to $70 a barrel, due to ethanol's growth from a boutique fuel. As a result, Gulf will be "fuel agnostic," meaning it will be both an ethanol and biodiesel player, along with regular petroleum-based fuels."We are creating an industry with options," said Petrowski.

"In the long term, ethanol will be a very viable choice."While the company will not take on "green" fuels to save the planet, it will do so to gear up for a world beyond petroleum, he said. "I'm not negating the need for green. There needs to be an economic drive to make changes. Convenience stores are not altruistic," he said, noting retailers' investment in alternative fuels will be hindered because of fluctuating margins and high credit card fees.

Petrowski also told attendees the distribution company is ensuring a secure future by trying to create healthy retailers.To do this, Gulf Oil is putting an emphasis on service, and providing its retail partners a "Gulf Sunrise" c-store concept, which aims to provide high margins inside the store, moving retailers away from surviving on fuel margins alone, he said.

Gulf will also provide retailers with pricing assistance, c-store and co-branding programs, construction/financing services, and loyalty programs and card services.

"Energy is not an end all, be all, but a means to have a better life," he concluded. —MB

Happy Birthday Nicolaus Otto

2008-06-10T05:55:00.000-07:00

Nicolaus Otto, inventor of the internal combustion engine.

Born June 10, 1832

T. Boone Pickens. Wind Power, Drinking Water, and the Future of Oil

2008-06-03T06:47:00.000-07:00

If you don't know who T. Boone Pickens is you should. He is to the independent players in the petroleum industry what Robert Kennedy is to young liberals. The idealized figure, dubbed the "Oracle of Oil."

Much like Wall Street looks to Warren Buffet oil industry insiders all gossip about what T. Boone Pickens says, does, and what the future might hold. Fastcompany this month has a great interview with him. Definitely worth the read.

Fastcompany asks: "Texas tycoon T. Boone Pickens has been dubbed the "Oracle of Oil." So why is he building the world's largest wind farm?"

A Response to an Email

2008-06-02T09:24:00.000-07:00

I sent out an email to a listserve with the link StopOilSpeculators.com which is an effort by gasoline retailers to shift the blame for gas prices to the derivative markets. To which I got a response which I answer below. I figured this was worth sharing.

-----------------------------------------------------------------------------

Kirk,

I did not invent financial derivatives or complex financial markets. Neither did the US. In fact I believe it was European traders starting with the exiled Scottsman John Law in France that first created financial markets.

High prices hurt. But they are good for progress. It is crushing many in the gasoline station business. Local companies that own one or two gas stations can't afford to own the gasoline in the ground (they can't afford to fill their tanks anymore than the suburbanites driving SUVs).

The fact that petroleum companies are pitting themselves against Wall-Street and big oil says alot about how this debate is going. Old time friends are throwing others under the bus. The debate is about to change in a big way and this is the first significant sign that the policy debate is now changed for good.

It looks like $130 a barrel oil and $4 gasoline was the magic number everyone speculated about. The world is changing.

I have a bachelors in petroleum economics, know alot about the subject. I understand enough to know that I don't understand how these systems work and personally believe anyone else associated with these large markets does either. Anymore than a poker player knows how to beat any other poker player

They are a living complex system similar to an ecosystem. They existed at the dawn of time and as humanity has scaled up so have these markets. They exist at all levels of society but only recently (last thirty years) have developed into the hypothetical exchanges that they really are at the commodity level.

Also - France, England, Japan, and many other nations have systems exactly the same as the US. Just smaller in scale with the size of the markets doing business in those economies. The existance of commodity exchanges is not the fault of the US, George W. Bush, petroleum hedgers, cattle drivers, or any other phenomenon. The fault of petroleum costs is the fault of everyone who buys it, trades it, or relies on it.

The fault of rising commodity prices is instablity in the US money markets due to mortgage backed securities having issues right now. Institutional investors (not speculators) moved to commodities which are easily convertable into dollars. The markets for agricultural goods (though large) are small in comparison to money markets and that is why many economists blame non-recieving buyers of commodities for the spike in commodities across the world.

The petroleum jobbers and retail gasoline retailers are spinning this to avoid blame for the high pump price.

Mark Fitz
www.DieselGeek.Blogspot.com

Peak Oil Quote of the Day

2008-06-01T13:21:00.000-07:00

The nice part about being a pessimist is that you are constantly being either proven right or pleasantly surprised.
- George F. Will

The above describes a friend of mine to a tee.Randy, a friend of mine from college, is a peak oil proponent. He lives, breathes, eats, and makes his income completely from the logic derived belief in Peak Oil and the End of Suburbia perspective.

As a sidenote: Randy's blog Lawns to Gardens

Quote for the Day (A good description of US Energy Policy)

2008-05-30T17:09:00.000-07:00

There's an old saying about those who forget history.
I don't remember it, but it's good.
- Stephen Colbert

MIT's Energy Initiative (MITEI)

2008-05-27T12:21:00.000-07:00

Described simply:

Doubling energy use, tripling electricity demand, political instability surrounding oil sources in the Middle East, and detrimental effects of greenhouse gas emissions on the environment: For MIT, these are the next problems to solve.

I saw a presentation last week on their efforts and its really exciting. Its worth looking at. Hopefully I'll have time to do a better post on it.

Mark

Biodiesel's Inception: A Very Brief Histroy

2008-05-27T06:40:00.000-07:00

I cut and pasted this directly from: the Biodiesel Expansion blog. This blog having a good deal of basic information about biodiesel and the process. I found it pretty enjoyable to read and learned a little bit while there.

From a post titled: Basic History of Biodiesel Fuel

Biodiesel fuel has been around since 1853. However, it was not fully used commercially until the early millennium. It is credited to E. Duffy and J. Patrick and it was recorded that the very first diesel-propelled machine ran on August 10 of 1893. Thus, the same day was aptly named International Biodiesel Day.

There is this German man named Rudolf Diesel who made an engine that was propelled by peanut oil. This was his experiment on biofuel for machine usage. Although peanut oil is not qualified as a biodiesel fuel because it did not undergo the actual process of making biodiesel fuel, it was viewed as the future of the power of natural feed stock to be used as an alternative to fuel based on petroleum. However, Rudolf was successful in running an engine using this type of biofuel.

Another person who should take the credit for biodiesel is G. Chavanne. It was in 1937 when he received a patent for a process called transesterification. This is the process used for converting feed stock to biodiesel. The blends of biodiesel fuels are marked on the percentage of blends. A 20% blend is called B20. A 30% blend is called B30. The B stands for blend.

Basically, biodiesel is made from animal and plant fats that are then mixed with methyl or ethanol. Glycerol is also used. Called fatty acid methyl or FAME, biodiesel has gains popularity of its practically year in and year out. The number of countries that have heavily invested in this have grown since the 1970s.

Renault announces Electric Vehicle destined for US Market

2008-05-13T06:58:00.000-07:00

Saw it over at Wired.com. Renault, like many other auto manufacturers is rolling out an EV. According to the article destined for US markets within a few years. Renault jockeying for a global leadership position on the EV side of the auto manufacturing universe.

This is interesting to say the least. That auto manufacturers are developing innovative technologies as fuel prices rise. More so the fact that when you read about many of these technologies their is one over riding motivation. More market share in large consumer markets such as China or the US.

Speculating on Oil Prices

2008-05-12T06:11:00.000-07:00

There is an interesting story about the pricing expectations of a barrel of oil up on the Biobased news. Its a news wire piece on a recent KPMG poll of petroleum executives. The poll will be discussed at an upcoming KPMG Global Energy Institute conference.

Long story short. Over half of oil execs believe a barrel of oil will close below $100. See below:

In this year's KPMG survey, which polled 372 financial executives from oil and gas companies in April 2008, 55 percent of the respondents think that the price-per-barrel of crude oil will drop below $100 by the end of the year. Twenty-one percent think that the price will close between $101 and $110; 15 percent think between $111 and $120; and nine percent believe it will close at above $120. And, while 44 percent felt that prices would peak by the end of the year, a further 39 percent thought that they would not peak until after 2010.

Fair enough. Past as pretext for any speculation you would assume that the historical high would flatten out and trend lower. I would understand why that would be the majority consensus. What I don't follow is why 39% (not exactly a small contingent) thought oil wasn't going to peak until after 2010. I think this is evidence that there is some other factor effecting price currently and that this dynamic has yet to run its course.

Other interesting findings of the poll. The underlying cause for the increasing prices.

Indeed, a significant majority, or 63 percent, of oil and gas executives believe that growing demand due to accelerated demand in emerging markets is the major contributor to the high price of oil. The second highest contributor, according to 15 percent of the respondents, was the lack of access to new oil resources, and rising exploration and development costs. Ten percent attributed current pricing to growing demand in developed markets.

That supply was not readily available even with highs never before expected or seen. These same execs also mentioned a much bigger role for natural gas, see wind being a growth sector, and biofuels being a credible mass producible energy source within ten years.

My Thoughts on Sustainability

2008-05-06T17:19:00.000-07:00

Today on the Biofuels4Oregon listserve their has been a vigorous debate brewing about what constitutes sustainable biofuels. A good email on the subject came from Brent Searle from the Oregon Department of Agriculture which actually inspired me to contribute to the exchage. Below is Brent's thoughts and then my response.

BioFuels Network

Sent: Tuesday, May 06, 2008 1:54 PM
Subject: [biofuels4oregon] Sustainability>

Here is my list of Sustainability Objectives for any fuel, keeping in
mind the question of "Can We Have it All?" There is no perfect fuel; they all have trade-offs.

Does the fuel (biofuel or any other) contribute in a positive way to:

1. The development of systems to deliver feedstock at “economically sustainable” prices to all players in the value chain over time?
2. Developing the infrastructure and capacity to consistently deliver quality fuel products in a market over time?
3. Economic development of rural communities, job creation, and local ownership models -- in the US?
4. Helping meet local, national, and world food needs?
5. Keeping ag lands in ag use?
6. Reducing carbon output, increasing sequestration, etc.?
7. Improving returns on energy and other inputs?
8. Stabilizing fuel costs?
9. National security: minimize military role/cost?
10. Energy security: diversified & resilient fuel supply?
11. Generating and enhancing environmental benefits (air, water, soil quality, wildlife, etc.).

There is no silver bullet. It will take lots of different strategies, fuels and biofuels, efficiencies and conservation, transportation shipping mode changes (more barge/rail, less truck), etc., etc.

Brent Searle
OR Dept. of Agriculture

My Additional thoughts and response to Brent's email:

I would also add to that the concept of "Does the technology/fuel/energy in question have longer term development opportunity?" I.e. - does it offer an upside potential of a long stream of value added products from initial investments.

Biofuels have a huge future for other value added products out of the same biofuel manufacturing facility. As for petroleum, the future of petroleum will likely be hydrocracking (i.e. converting) cheaper non petroleum products to the same spec as petroleum.

Developing new agricultural products or feedstocks for both ethanol and biodiesel have a huge potential for this. The leaders in these newer industries will be outside traditional energy and therefore will provide a good deal of value outside of our traditional marketplace. This is exciting stuff and rarely covered if ever.

The real story behind petroleum isn't the versatility of the input (the crude oil). Its the focus the petroleum industry has put into developing value added products from the crude. The real story of biofuels is similar - not developing the mainstream product (ethanol or biodiesel) but instead other value added products with unique niche markets.

Being that to dump any part of petroleum is noticeable and polluting. Its been the case since the very beginning of the petroleum refining industry there has been good deal of money invested to develop something from every last drip of crude oil. The major oil companies grew up niching certain products from their refining process. Everyone knows the stories of refineries in the rust-belt dumping lighter end products in rivers, flaring off natural gas, and others. We hear these stories because people in these communities were upset even in 1925 long before the Clean Air and Water acts. The early success found a way to get paid for their "waste" as a product instead of a pollution.

There is no reason why Agriculture won't follow that same development pattern as petroleum refining technology. Up until recently the main focus of US agriculture has been food grade products. The upside of biofuels is the research money is on a much wider focus of product development.If we have a floor for production to move to that can handle a diverse number of crops. This is a whole new paradigm for the US. Sustainability to me is more products from more acres with less water, fertilizer, and energy input. Sustainability to me is this trend for the next 100 years.

Anything that moves towards this trend of newer, better, cleaner technology is progress. Those green washing the same old practices are not.

Today unsustainable agriculture is a ten cylinder 57 Chevy. Something you can be sentimental about but not a breakthrough in technology for the time it was produced. Compare this 57 Chevy to the gamble represented by the 2002 Prius scale up. The Toyota Prius was cutting edge experimental technology outside the box of any market expectation. Over the next decades hybrids will become as standard as anti-lock brakes and electric windows and therefore so will our fuel economy expectations.

That's sustainable progress and therefore Sustainability.

Mark Fitz

www.dieselgeek.blogspot.com/

Good News for Oregon's Trillium Fiber Fuels

2008-05-02T08:50:00.000-07:00

From: Chris Beatty
To: biofuels4oregon@lists.onenw.org
Sent: Thursday, May 01, 2008 6:10 PM
Subject: [biofuels4oregon] Trillium FiberFuels receives DOE grant

May 1, 2008

Trillium FiberFuels receives $100,000 grant for cellulosic ethanol research

Trillium FiberFuels of Corvallis, Oregon has been selected by the US Dept. of Energy to receive a Small Business Innovative Research (SBIR) Grant to develop a key process for cellulosic ethanol. The Trillium technology will substantially improve ethanol yield from feedstocks such as straw and forest residues. Trillium president Chris Beatty commented: “We are very pleased with this support and validation of our approach. We are excited about taking this technology to the next level.”

Gasoline Prices the World Over: March 1st, 2008

2008-04-29T06:47:00.000-07:00

I came across this at Diabetes Daily of all places. They do not cite their sources but I figured it probably was accurate. Please do not assume these numbers are academically accurate. They are Google sourced.

Prices are quoted in US dollars per gallon for regular unleaded.

Oslo , Norway $6.82

Hong Kong $6.25

Brussels, Belgium $6.16

London, UK $5.96

Rome, Italy $5.80

Tokyo, Japan $5.25

Sao Paulo, Brazil $4.42

New Delhi, India $3.71

Sidney , Australia $3.42

Johannesburg, South Africa $3.39

Mexico City $2.22

Buenos Aires , Argentina $2.09

Riyadh , Saudi Arabia $0.91

Kuwait $0.78Caracas

Venezuela$0.12

Compare with my last post on the subject here. Notice the last time I reported on these pricing differences Venezuela was $0.11 a gallon. No doubt the price hasn't changed just the US dollar in comparison.

How do you know the US Ethanol Tariff might be going away?

2008-04-28T09:33:00.000-07:00

When major refiners starts investing in Ethanol South America.

I saw it over at the Biobased News where they cited a BP Press Release.

BP announced today that it intends to take a 50 per cent stake in Tropical BioEnergia SA, a joint venture established by Brazilian companies Santelisa Vale and Maeda Group, which is constructing a 435 million liter (115 million gallons) a year ethanol refinery in Edéia, Goias State, Brazil.

Quite the bet on BP's part. Or maybe that's the only way to play in Brazil. To build strategic partnerships with local biofuel producers. The Press Release points to sugar cane and sugar cane waste as the feedstocks. It also mentions the plants markets to be both domestic Brazil and export abroad.

NOTE: I have no basis for this speculation beyond my initial gut reaction when first reading the news. BP, Shell, Chevron, and Exxon Mobil have all been making good-sized biofuel bets as of late. Something about his one just seemed to run of the mill to be just another "bet on the future" PR move by major oil refiners.

BP's Petroleum Exploration and Production Presentation

2008-04-27T09:43:00.000-07:00

NOTE: I neither agree with nor forward any Peak Oil argument's I have seen and yes I've read several books on the subject and have had hundreds of heated conversations with experts on the topic of Peak Oil.

From a BP Press Release footnote explaining the basis of statements made about sugar cane ethanol I followed over to a set of interesting information at BP's global site.

At the site there was a host of interesting stuff to look at. Unfortunately time in life is limited so I just skimmed through and struck on what I hoped would be a really interesting presentation. You know, the type of presentation I can skim slides from to make myself look really smart in my own presentations.

I was looking for Powerpoint slides about hydrocracking, catalytic reforming, and heavy tar sands, oil shale, and producing sweet crude from abandoned wells with new bleeding edge technology. But that isn't what I found.

I found instead a very weak presentation about how BP is running out of oil and that it's spending more and more to access harder to get to crude.

The Future of Exploration and Production
by Tony Hayward the CEO of Exploration and Production at BP

What really caught my eye in this presentation wasn't the profound information. This being normal for technical slides about a complex subject such as oil exploration. What caught my eye here was the basic lack of explanation beyond simple statements. All I could think about was how a good friend of mine, Randy White (who lives, eats, and breaths peak oil) would think after seeing this presentation.

He would see this presentation as conclusive proof that the world has run out of oil and major oil companies have no strategy for how the world will meet its energy needs.

Now below shows their reserves and the development. It shows the general large strikes BP made in the Middle East, the Alaskan North Slope fields BP has to its credit, and also that recently the main development has been by acquisitions of the late 1990's.

Then comes the next technical slide from the presentation. A "Lifecycle of a Basin" or the reality that given current oil prices an oil well becomes to expensive to extract oil from after roughly 25 years.

Look above and do some fifth grade math. Oil supplies held by BP are declining beyond their acquisition of new fields developed by other other oil companies.

Now at this point I would encourage BP to talk about proprietary technology. That the future of their exploration and production would be based on BP being better at extraction than any other player. The fact maybe that even though the easy oil isn't quite so easy any more at above $60 or $100 a barrel it was a new world for their BP.

Nope.

This is what BP's CEO of exploration puts up next. These simple statements which are almost a joke. If Saturday Night Live did a skit about oil exploration no doubt these would be the bullet statements they would put up to garner a laugh.

Find new oil deposits. Be the first there. And focus on finding the biggest find possible.

Wow, quite profound statements.
It reminds me of slides we all saw from Dot.Com operations a decade ago.

Okay. This slide is pretty cool simply because it's got cool pictures.

But from the perspective of a Huber's Peak worshiping Hilbroner reading 'Peak Oiler' like my friend Randy this slide only convinces one thing.

Their statement would be simple "See no oil left to find."

BP presentation on exploration and production does little to convince even those who know alot about Peak Oil but haven't bought into it as a reality that there is a supply of cheap crude oil in the world left untapped.

If I was a journalist who saw three less than credible presentations on Peak Oil and then saw this presentation from one of the largest energy players in the world I would no doubt side with Peak Oil having something to it.

For all of BP's investment in outside the box energy development. It's focus on gaining more crude from the same old holes in the Earth, there was nothing to point to this beyond the fact that exploration for big finds is compeletly off-shore deeper than ever.

How Much Oil? 1 Cubic Mile of Petroleum a Year

2008-04-26T11:06:00.000-07:00

The world uses a little over 1 cubic mile of petroleum a year.

I love the visual of how big of an ocean we consume. The source is Ripudaman Malhotra from SRI Internation.

The article I spotted the fact at was over at CNet News.

Other interesting facts:

It would take 4.2 Billion rooftop's covered with a 2.1 megawatt panels each to equal the energy consumed by world oil.

It would take 2,500 900 megawatt nuclear plants to replace the energy consumed currently by the world in liquid petroleum.

It would take 3 million wind turbines to replace a cubic mile of oil as well.

The article also came complete with an interesting chart below.

Zap Called on the Carpet by Wired Magazine

2008-04-16T08:21:00.001-07:00

Wired calls Zap a "Hype Machine" with a scathing article pointing to over a decade of broken promises, deceptive business practices, and a consistent shady use of its companies equity to pay debts.

Simple breakdown about Zap as described by the article:

They promised vehicles they couldn't get.

They assumed and claimed relationships with Chrysler they never had.

They took money in exchange for dealership territories and left their dealership network to fail without a true supply of alternative fuel vehicles.

Those vehicles they did deliver were electric and could not perform adequately to actually sell, were shodily put together, and were poorly supported by warranty.

Oh yeah - Warranty work was left unpaid and hanging as well.

All while continually paying people in ever greater issues of company stock.

So in short - the bad things you hear about electric vehicles - probably Zap.

I saw this the weekend the magazine came out. Wanted to do a post on it but found that Wired hadn't put it online yet. Came across the magazine this morning and remembered how significant this is. So much for Zap (though rumors, problems, and complaints had already been heard and well known in electric vehicle circles for a while now).

I called a friend of mine who was involved in the launching of EcoMotion (an EPA Smartway certified and electric vehicle dealership here in Portland, Oregon). His immediate comment was not one of surprise.

Range Fuels: Biogass to Ethanol

2008-04-07T06:57:00.000-07:00

I came across an article I thought worth sharing. Two points of interest. The initial article was found at BusinessGreen.com and is worth reading.

One - Range Fuels, a biofuel startup, got a significant amount of direct investment. This to support its efforts in turning woody biomass into liquid fuel which are about to be commercially scaled in their first plant in Georgia under construction now. This round of funding came on the heels of another $76 million awarded by the US DOE to also support their technology.

Two - The process explained of how they will make their cellulosic ethanol. The article called it a "thermo-chemical" technique of turning wood into liquid fuel.

From my guessing this is a fancy way of saying they burn the wood, pull off the exhaust gas (now technically referred to as "biogas) and introduce the biogas to an environment that includes a catalyst. The catalyst in turn would create certain or pull out molecule chains that would then be further refined into liquid fuel (i.e. cleaned up).

Interesting stuff. I hope to have time to put up more on this technology process. I've read a little about it and seen presentations at conferences. Either way I need to learn more about it. Something in my gut says this is going to be the next big focus. Primarily because the combined heat and power potential probably fits extremely well with existing corn based ethanol and therefore could be readily adopted as a plant expansion for existing ethanol producers.

My thoughts are that we will be hearing increasingly more about Range Fuels going forward if for no other reason than they have the money to push for earned media coverage and must justify the cash they've recently pulled down.

NOTE: This blog first mentioned Range Fuels after they recieved a large investment from Vinod Kholsla. See the previous DieselGeek Post on the subject.

From the PMAA News

2008-04-04T10:29:00.000-07:00

The PMAA is the Petroleum Marketers Association of America E-Newsletter.

The reason I posted this up was the last paragraph which states that there are three factors affecting high energy prices:

US Monetary Policy

Geopolitical Events

Speculation

All adding as much as 30 to 40 percent to the cost of crude oil.

Think about that. That would mean that oil should be below $70 a barrel given the economics of the pre-Bush Presidency. See the actual release below.

HOUSE SUMMONS OIL EXECUTIVES TO TESTIFY BEFORE CONGRESS

On Tuesday, the House Select Energy Independence and Global Warming Committee held a hearing to address oil companies’ profits, current gasoline prices and alternative energy. Testifying before the committee were: Mr. J. Stephen Simon, Senior Vice President of Exxon Mobil Corp; Mr. John Hofmeister, President of Shell Oil Company; Mr. Robert A. Malone, Chairman and President of BP America, Inc.; Mr. Peter Robertson, Vice Chairman of Chevron and Mr. John Lowe, Executive Vice President of ConocoPhillips.

As in the past, the hearing served as political theatre to criticize major oil companies. Members asked oil companies to invest ten percent of their profits in renewable energy and biofuels. Currently, House leaders are trying to repeal $18.1 billion in oil production tax incentives to create tax breaks for alternative energy companies.

PMAA applauds Representative John Larson (D-CT) for focusing attention on the futures markets. Representative Larson argued that, “speculators are driving energy costs,” and asked oil executives if they agreed that excessive speculation has artificially raised energy prices. Mr. Simon, Senior Vice-President, Exxon Mobil Corporation explained that there are three factors affecting high energy prices: U.S. monetary policy, geopolitical events, and speculation which may add as much as much as 30 to 40 percent to the cost of crude oil.

Windpower by State

2008-04-03T09:45:00.001-07:00

Oregon Leads the US. Third place and we just past our RPS. I tracked it down on the Environmental Leader.

25x25 Responds to Time Magazine Article

2008-04-02T10:25:00.000-07:00

FROM AN EMAIL ADDRESSED: "To all 25'x25 Partners, April 2, 2008

Responding to widespread inaccuracies in this week's Time magazine cover story, the 25x'25 National Steering Committee is responding with a letter to the editors of Time expressing disappointment with the questionable characterization of biofuels and their role in the issue of greenhouse gas emissions in "The Clean Energy Scam," by Michael Grunwald. The letter was authored by steering committee member and former Congressman Thomas W. Ewing, who is also the Immediate Past Chairman of the USDA and DOE Biomass Research and Development Technical Advisory Committee. The entire letter follows:

As a former Member of Congress and a leader in a diverse alliance of agricultural, environmental and conservation organizations working together to advance clean energy solutions, I am greatly disturbed with Time magazine's April 7th feature story on biofuels. In this article, Michael Grunwald criticizes biofuels yet offers no alternative to using petroleum to meet our energy needs - much of which comes from the Middle East.

Members of our alliance share the author's anxiety for the continued health of the Amazon rain forest and other "carbon sinks" that nature has provided around the globe. As champions of many forms of land-based renewable energy (biomass, wind energy, solar power, geothermal energy and hydropower, in addition to biofuels), we agree that environmentally sensitive lands should not be exploited in pursuit of renewable fuels.

Unfortunately, the story's message of concern is undermined by misinformation about biofuels and an over-simplified analysis of complex systems. The implication that biofuel production is responsible for the destruction of the Amazon rain forest ignores the reality that ever increasing worldwide demand for food and fiber is the primary cause of land use change in this and other regions. Simply eliminating biofuels will not stop land use changes from occurring, and in countries like Haiti that have already lost their forests, biofuels could help reestablish forests and offer more affordable and sustainable energy options. Similarly, information in the story about a recent study, which claims land-use changes brought about by increased biofuel production are producing more greenhouse gas emissions (Searchinger et al.), only tells half the story. What is missing is that Searchinger's methodologies have been widely questioned by respected biofuel life-cycle analysis researchers such as Michael Wang, with the Center for Transportation Research at the Argonne National Laboratory, who counter that Searchinger et al. used outdated, if not incorrect, data to reach their conclusions.

The story's reference to a UN food expert's dramatic condemnation of biofuel production fails to mention that the UN Food and Agriculture Organization almost immediately distanced itself from the remarks. The head of the UN Food Program recently noted that higher energy costs, erratic weather and low stocks are big factors contributing to the high cost of food around the globe.

Of particular concern is the ready dismissal of emerging technologies that will allow us to produce next generation biofuels from non-food feedstocks sustainably grown on underutilized and marginal lands not suited for food production. Conservation tillage and other agriculture and forestry residue management practices used to produce biomass energy feedstocks can also provide a constant buildup of soil organic carbon. Researchers at Ohio State have concluded that the total potential of carbon sequestration in U.S. soils, counting croplands, grazing lands and woodlands, is nearly 600 million metric tons of carbon, or the equivalent of more than 2,200 million metric tons of carbon dioxide emissions - about 33 percent of total U.S. emissions.

We encourage the editors of Time to contribute to a much-needed discussion of the role renewable resources will play in improving national security and the environment while moving us closer to energy independence. We simply ask that they demand a basic level of accuracy and balance from the stories that they run.

The Full Press Packet and no doubt more will be coming at the 25x25 main website shortly.

Oregon Petroleum Stats

2008-04-01T22:00:00.000-07:00

2005 Resident Population 3,641,056

Number with Driver's Licenses in 2005: 2,692,948

Miles of Road in Oregon: 64,544 miles

Oregon Petroleum Use: 2,111,000,000
(Gasoline private highway usage 1,481,000,000)

Petroleum Per Mile of Road: 32,706 gallons

Average Cost of Petroleum: Assume $3.00

Petroleum Use Per Capita: 580 gallons
Petroleum Use per Licensed Driver: 784 gallons

2006 Oregon State GDP: 144,278,000,000
Oregon Per Capita GDP: $39,626
2005 Per Capita Personal Income: $32,103

Oregon Taxes: $6,522,665,000
Tax Burden Per Capita: $1,791.45

Per Capita Petroleum Cost: $1740.00
Per Capita Driver's Petroleum Cost: $2352.00

Oregon State Motto: Alis volat Propriis (She flies with her own wings)

An aptly phrased motto from an energy policy wonk's perspective.

Ron Pernick: "The Future Ain't What it Used to Be"

2008-03-31T07:39:00.000-07:00

Check out "The Future Ain't What it Used to Be" a great article by Ron Pernick. I found it at Renewable Energy World which itself is a good information site for energy geeks and commercially motivated types alike.

Little factoids from his article worth sharing:

According to the 2008 annual Clean Energy Trends report the "clean-energy markets" grew by 40 percent from $55 billion in 2006 to $77.3 billion in 2007.

Ron predicts these same technologies will reach $254.5 billion by 2017.

The EU has added 47,000 megawatts of new wind energy since 2000.

The EU has also added 9,600 MW of coal and 1,200 MW of Nuke.

The US has more than 50 new coal plants on hold because of CO2 worries and the anticipation of a federal carbon emissions cap under the next presidential administration.

The upfront cost comparison of Nuke versus Other:

1-gigawatt brand new Nuclear plant is between $2 billion and $6 billion.

1 - gigawatt of geothermal or wind is less than $2 billion.

1 - gigawatt of solar is between $5 billion and $10 billion.

And best of all - Ron quotes Oil Luminary T.Boone Pickens who has announced he will build the world's largest wind farm at 4,000 MW.

"I have the same feelings about wind as I had about the best oil field I ever found."
- T. Boone Pickens

NOTE: Ron Pernick is author of the Clean Tech Revolution, which I consider the best book available on the emerging new market for outside the box energy concepts. He also maintains a website and currently teaches at Portland State University. Go Stumptown!

Solar Excitement

2008-03-28T09:22:00.000-07:00

Solar power done easy. Called "Solar-Thermal Electric" technology. I've heard more talk about this than about any other solar concept ever. People are really excited about a large utility scale solar project.

A mirror, some heat exchangers, and a whole lotta electricity. I have a few people mention this over the last few weeks. Simple, efficient, and totally scalable. Exciting stuff to glimpse - the future looks great when it so close you can taste it.

University of Maryland and Cellulosic Ethanol

2008-03-26T22:37:00.000-07:00

The Energy Blog has a great post up about a cellulosic ethanol breakthrough.

The University of Maryland claims to have hit the perpetually five year out solution to braking cellulose into a working food for yeast. In short they claim they've sourced a bacteria plucked out of Chesapeke Bay have tooled it to break cellulose into sugar.

Lets see how far this goes. If its real it will be everywhere soon enough.

Automobile X-Prize Update

2008-03-24T06:28:00.000-07:00

Wired online has a great update of the Auto X-Prize.

It went from 12 to 66 entrants.

Entrants origins number 9 countries.

There are two classes of vehicles :

Mainstream Class - with 4 wheel/4 passenger/and standard options expected in a modern vehicle.

Alternative Class - with an open allowance which includes the sexy Tesla roadster (shown right).

The vehicles will prove their mettle in a series of long distance races (nothing makes product development fun like a competition).

Its long but worth the read. Take a look at the future of design. You just know the large auto manufacturers are looking over their shoulders. Not so much because of the threat but just to see what outsiders can do.

An Awesome Diesel Technical Document

2008-03-19T09:21:00.000-07:00

The Chevron Diesel Fuel Technical Review

I've got a great PDF if anyone has a question about diesel technology or refining. I came across this great book at the Chevron Diesel website. They also have a great Diesel FAQ page as well.

It is an amazing document that covers the whole gamut on diesel fuel.

This PDF is essentially a free text book which is about as easy as you can make this material. I found it a really good piece of work and even learned a little bit while reading it.

From refining, to ASTM specification, biodiesel (from the perspective of a petroleum company that is), diesel additives, performance of the fuel, and diesel technology. If you are in academia it would be a good place to pull information if you need to talk about diesel technology.

I've also put together a presentation pulling pretty heavily from this as well as some other sources. As diesel prices have climbed there has been a steady stream of customer inquiries on why diesel is more expensive than gasoline. If anyone wants a presentation that goes with the book I can forward that to you as well.

It's always great to find really good sources of information in free PDF form.

Renewable Energy Group Pulls Back from IPO

2008-03-18T15:52:00.000-07:00

Wow, looks like the biodiesel sector isn't going to do so hot in the eyes of Wall Street. Renewable Energy Group (normally referred to as REG in the industry) is a little skittish about the black and white future of biodiesel producers in an Annual Report. That's the second IPO implosion in the last few months (first Imperium backed away and swapped management and now this).

My source was OPIS which offers a news email service which I'm on right now. I've pasted the news piece below.

From OPIS BIOFUELS UPDATE:

Iowa biodiesel marketer and producer Renewable Energy Group (REG) withdrew its plan to file an initial public offering (IPO), it told the U.S. Securities and Exchange Commission (SEC) this morning.

Eight months after announcing plans to raise up to $150 million in common stock, REG said it withdrew the filing "on the grounds that current market conditions do not support a public offering ... at this time."

No further information was provided in the SEC filing. Credit Suisse, Goldman, Sachs & Co, Banc of America Securities and Thomas Weisel Partners had been listed as underwriters on the IPO. A handful of biofuel companies have announced plans to halt or stop production, until high feedstock costs are reduced.

Over the weekend, the 30-million gal/yr SoyMor biodiesel plant in Albert Lea, Minn., was the latest company to halt production. "Due to current biodiesel economics, the board of governors of SoyMor Biodiesel, LLC are suspending the production of biodiesel at this time," according to a notice posted on the company's website. "SoyMor's board of governors has reviewed all possible alternatives regarding the plant's operations and have concluded that the suspension of production is the most prudent decision to ensure long-term viability of SoyMor," the notice added.

SoyMor is one of four biodiesel plants that REG operates, but which is owned by third parties. REG bills itself as a full-service biodiesel company, including biodiesel production, management, marketing, sales and plant construction management. The REG network currently includes seven operating biodiesel plants, accounting for more than 222 million gal of annual biodiesel production, with three additional plants under construction. However, in its IPO filing, REG said it planned to use some of the net proceeds to finance half of the expected construction costs for the three new biodiesel plants. With the IPO withdrawn, it's unclear whether REG will scale back its plans for the three new facilities.

Well. When the big dogs start backing up a little its a good sign that tough times are immediately ahead. Time to batten down the hatches and get ready for the rough weather.

Happy Birthday Rudolph Diesel

2008-03-18T05:57:00.000-07:00

Rudolph Diesel, inventor of the internal compression engine.

Born March 18th, 1858