10 Favs; 10 Years: "What Keeps You Up at Night?"

Back in November 2009, Lou Rappaport of Blank Rome asked me a disturbing question at the MAC Alliance Conference in Philadelphia.

Here's the post I wrote in response to his question:


On the face of it, Lou's question was a simple one:

"What keeps you up at night?"

We were interrupted before I could answer, but Lou's question lingered with me.

In fact, it kept me up the past couple of nights.

By way of an answer now, here are seven things that keep me up at night:

1.) We will fail to embrace change and tackle the new green economy.

2.) We are so deeply entrenched in partisan politics that we will blow this opportunity to lead in a sector (alternative energy) that we invented.

3.) The Dems have made climate and energy a "left" issue and the right has ceded it to them. Where is the GOP leadership stepping up to fill the void on these issues?*

4.) Enviros and NIMBYs will kill the energy economy transformation by blocking efforts on clean coal, nuclear, natural gas exploration, and the new electric grid just as they did with wind farms and offshore drilling.

5.) We don't have time to dither, yet we are a nation of inveterate ditherers.

6.) While we dither and dawdle, China is ready to seize the day.

7.) I don't know Mandarin.

____________________________________________
*(Note: This is deeply disappointing for the party of Teddy Roosevelt and Richard Nixon, which once led on issues now considered clean and green – and that now seems blind to this incredible opportunity for wealth generation.)

My Three Take-Aways from BNEF Summit 2013

Last week was the BNEF Summit (Bloomberg New Energy Finance), the annual gathering of the clean energy faithful curated by Michael Liebreich.

BNEF puts on a good show. Their analysts have a deep understanding of their particular focus area and they know how to present data, and the other panelists and presenters are always top-shelf.

Having been a part of the Summit two years in a row now, I see the value in getting such a group together for an annual sit-down to have a look under the cleantech/new energy hood.

Survey says, "It's the policy, stupid."

As one attendee, @electricityyoda, Tweeted during the event, "Yoda once said 'Always pass on what you have learned.'" Taking his advice, here are my three take-aways:

1.) Gas is now part of the "clean energy" mix.

Whether you like it or not, natural gas, specifically in the US, but increasingly elsewhere, is now part of the conversation.

Frack-water aside, gas has had a huge impact.  For some, gas is a bridge to cleaner technologies; for others it's a pier, and for still others, gas appears to be a destination.

It remains to be seen whether the impact on renewables will be net-negative or net-positive. If gas "hooks up" with solar, as NRG's David Crane suggested, it could dominate the future electricity supply in the US.

(On the subject of fracking, I think there are still plenty of opportunities and needs for technologies to address the fracking chemicals, clean up the water, and to capture the CO2 emissions generated from the process.)

2.) Policy (or lack thereof) still breeds uncertainty.

Seventy-nine percent of BNEF Summit participants answering an onsite poll said policy and regulation were the largest uncertainties for energy investment. (See photo.) And this doesn't show any signs of changing any time soon. Especially in the US, where very few expect major energy legislation.

Small wins will have to do for now, such as the legislation introduced by Senators Lisa Murkowski (R-Alaska) and Chris Coons (D-Delaware), that would extend the master limited partnership program to clean energy companies.

The program, which Murkowski indicated has bipartisan support in both the Senate and the House, allows companies to raise funds like acorporation and pay taxes as a partnership. Currently, the program provides favorable tax status only for oil and gas projects and other fossil fuel companies.

3.) Costs continue to come down, making renewables more affordable...but is the grid ready for it?

As BNEF reported, "the cost of installing a gigawatt of renewable energy capacity is now about 10 percent lower during the period through 2030 than it projected in 2011," but is the grid ready for it? We have an aging infrastructure and our delivery system is out of whack.

As NRG's Crane quipped, "the 21st Century economy should not be based on wooden [utility] poles."

For more on the BNEF Summit, and to see some of the speeches from the event, check out the Summit videos here.  


(Disclosure: my employer, Ernst & Young LLP is a sponsor of the BNEF Summit, through our Global Cleantech Center. Opinions mine.)

Green Skeptic Friday LinkFest - 04/15/11

Image via CrunchBaseTax Day edition of the Green Skeptic LinkFest...

The Zipcar IPO Is A Smash Hit -- Up 60% On First Day, reports Business Insider. Social critic Richard Florida says that shows how the American dream is evolving away from an ownership society With Zipcar's IPO, Stock Market Endorses Rentership Society.

Q1 Venture money in cleantech hit $2.6B, but are the numbers all they are cracked up to be? Neil Dikeman isn't buying it: Brightsource, Fisker and Solyndra – Soul Crushingly Bad Numbers Make up 17% of Near Record 1Q11 Venture Investment

Is natural gas fracking worse than coal? A new Cornell study concludes that it may be, while theWorldwatch Institute reserves judgment, and still sees benefits of natural gas.

Grameen Bank update: The Ouster of Muhammad Yunus: Can Politics Destroy Grameen Bank? 

And Greentech Media reports on a new study claiming that 1 percent of US electricity is used to grow marijuana indoor: Marijuana, Top US Crop, Has a $5B Power Bill.

Have a great weekend everybody.

80 Percent Clean Energy by 2035? I'm Skeptical, Mr. President

Source: AE2011, US EIA

I missed President Obama's State of the Union address last night because I was meeting with the good people at Investor's Circle.

On my way home, however, my Twitterstream was all abuzz  about the President's shout-out to a clean energy future.

Did he really commit to "80 percent of America's electricity will come from clean energy sources" by 2035?

Apparently, he did. It's right there in the transcript (along with a liberal sprinkling of the word "applause").

While many applaud the sentiment, some of us remain skeptical about the feasibility of such a target.

Don't get me wrong, I agree with two of the statements the President made on clean energy. The first is, "clean energy breakthroughs will only translate into clean energy jobs if businesses know there will be a market for what they're selling."

True enough. And it is also true that industry needs a clear signal on the price of carbon or the regulatory constraints they will face. Still to be determined how we get that, and no mention of it last night.

I also agree with the President that we need it all: wind, solar, clean coal, natural gas...and nuclear.

But 80 percent renewables clean energy by 2035? Well, I'm skeptical.

Even our own US Energy Information Administration's Annual Energy Outlook for 2011 (AE2011), released late last year, projects that renewables will climb to only 14 percent by 2035. This does not take into account natural gas, which they project will climb to 25 percent, or nuclear, at 17 percent.

If you take an inclusive view of clean energy, that adds up to 56 percent by 2035. With coal at 43 percent in the AE2011 (and the last one percent coming from "oil and other liquids") making up the difference, I'm assuming a large chunk of that is going to have to become -- rather quickly -- clean coal.

And by the way, China, with its aggressive investments in clean technologies, has set a goal of 15 percent of its energy from renewables by 2020 and 30 percent by 2050.

So forgive me if I remain skeptical about the 80 percent target. I'd prefer to see a realistic plan, with real targets, real investment (public and private), and a real demonstration that the political will exists to make it happen.

Green Skeptic Friday LinkFest - 01/21/11

Image by TalkMediaNews 
Chinese President Hu Jintao visited the US this week and cleantech cooperation was on the agenda, along with a flurry of collaboration announcements.

Terry Cooke attended the welcome ceremony and writes about it on his US-China Energy blog: What's the Real Deal with Hu Jintao's State Visit?

Timed with the visit was the announcement of an agreement between Duke Energy and China’s ENN Group to cooperate in developing coordinated technologies to power the cities and transportation: Duke-ENN. 

GE and China also announced plans to partner on clean coal technology:  GE and China.

US Energy Secretary Steven Chu wrote about the big picture on the DOE's blog energy.gov: "Discover and Deliver: The Big Picture on Energy". 

Secretary Chu also told the Conference of Mayors on Wednesday that the United States might not get its “groove back” as the world leader in manufacturing high-quality clean technologies: Chu Groove.

Meanwhile, Ucilia Wang pondered whether natural gas is a serious foe or friend to renewable energy: Don’t Underestimate The Impact of Natural Gas on Renewables. 

Scientific American's David Biello considered the path for scaling up renewables: Green Energy’s Big Challenge: The Daunting Task of Scaling Up.

Have a great weekend everyone.


 

Joshua Brown's 3 Biggest Investment Fads Of 2011

Joshua Brown, one of our StockTwits favorites aka @reformedbroker, was on CNBC last night and offered three investment fads for 2011, including social networking IPOs, muni defaults, and commodities like agriculture.

Of special interest to Green Skeptic readers, Josh suggests avoiding anything tied too closely to the Chinese infrastructure build-out and he doesn't think natural gas is quite ready, but suggests "keeping an eye on it" and "maybe even start to nibble," especially if oil goes over $100, which several sources are fully expecting in 2011.

Wharton Energy Conference Tries to Bridge the Future

Judging by the commentary at last Friday's Wharton Energy Conference, the bridge to the future is a double-truss of traditional and alternatives.
 
The conference, held at the stodgy, old-fashioned Union League of Philadelphia, featured a stellar group of experts in three tracks, including representatives from traditional energy sources (fossil fuels, nuclear), alternatives, and the regulatory and financial players to help navigate.

And it was no more evident than in the sentiments expressed by the speakers over lunch.

"Traditional sources of energy are going to be with us a long time," said Mark Mills, founding partner of Digital Power Capital. "The world doesn't really react to $80 barrel oil. $80 a barrel is the new floor. $150 a barrel is not question of 'if' but 'when'."

Mills was participating in a mock scenario over lunch demonstrating how an energy storage company needs navigates between those who hold the purse strings and those who have the regulatory clout to help or hinder its business.

"As an investor, I want rules and guidelines, especially around interconnection and safety, to anticipate where it is going," said Mills. "It's not important to have the "right" rules, but just have the rules not change."

After lunch, investors shared their insights about the state of financing in cleantech and energy businesses.

"Renewables have taken a beating lately," offered Michael DeRosa, a managing partner with Element Partners, a leading investor in high growth companies in the energy and clean technology markets. "But let's remember that renewables is a broad category."

"Solar seems to be the most expensive, but it has the best potential for distributed generation and actually has the lowest subsidies," suggested DeRosa. "Geothermal is a very economic source of base load generation. We should be looking at more geothermal in the US."

DeRosa shared his concerns about picking one technology over another to receive subsidies.

"Does it make sense to subsidize electric vehicles or a particular type of solar product that may have risks," asked DeRosa. "Risk in light of a lithium shortage, for example or other rare earth material, versus a subsidy for natural gas vehicles and an industry where we know we can access all the reserves?"

The subject of reserves was also taken up by those on the traditional energy side of the equation.

Representatives from Shell, ExxonMobil, and Brazil's quasi-state oil exploration company Petrobras analyzed their quest for tapping into reserves and the need for all sources of energy for the future.

"We're still going to be using a lot of fossil fuels for the foreseeable future," said Robert Lance Cook of Shell. "We see natural gas as not just a bridge fuel, but as a destination. It has a 2-to-1 advantage over coal in terms of CO2."

The future of energy is paved by old technology, new technology -- and creative folks trying to develop the right policies and financing vehicles to make innovation possible.

Related articles

• Dr. Sue Tierney Delivers Keynote Speech at Wharton Energy Conference in Philadelphia (eon.businesswire.com)
• Drumbeat: November 1, 2010 (theoildrum.com)
• Smart Grid's Long and Winding Road (greentechmedia.com)
• California TREC Decision Side-steps Energy Infrastructure of the Future (cleantechblog.com)
• Energy's Next Horizon after Deepwater Horizon? (triplepundit.com)
• The New Silicon Valley: Why Entrepreneurs Are Flocking to Energy (triplepundit.com)

Why We Deserve to Lose (The Race for a New Green Economy)

No offenths, as the 4-year-old son of a friend used to say before offering a critical observation, but we suck.

And we deserve to lose the race for a new green economy to China. Why?  Because we have systematically destroyed our opportunity to lead through bad decisions and illusion, sold ourselves to China, and blanketed ourselves with cheap and toxic products bought from China.

(No wonder the Chinese are laughing at us in this political ad Joshua Brown wrote about on The ReformedBroker.com this weekend. Of course, as Josh pointed out in his post, China needs us as much as we need them.)

Then there is this disturbing item from an editorial in the New York Times this morning: "Until a little over three weeks ago, the Interior Department had approved more than 73,000 oil and gas leases since 2005, but only one offshore wind energy project and not a single solar project."

Don't get me wrong, I support domestic oil and gas development -- both offshore and on land -- as long as it is conducted using the highest environmental standards and safeguards.

But why has it so long to approve a project like Cape Wind off the coast of Massachusetts while oil and gas leasing has accelerated?

Two things have been happening since 2005 when Congress directed the US Department of the Interior "to approve enough wind, solar and other projects on public land to produce 10,000 megawatts by 2015 — enough to heat, cool and light five million homes."

The first is the so-called "Haliburton loophole," which exempted natural gas drilling companies from the Clean Water Act after the companies raised a "frackas" over having to disclose chemicals used in their fracking process.  They claimed it would endanger their proprietary formulas.

A September 2009 report issued by the General Accountability Office (GAO) found that 28 percent of drilling permits issued from 2006 to 2008 (about 6,100 applications) were expedited by the Bureau of Land Management through this categorical exclusion.

Here's an interesting list of exemptions the oil and gas industry currently enjoys from the Federal government compiled by the Environmental Working Group.  Any one of these can help accelerate the approval process.

By comparison, the Cape Wind project was subject to meeting a plethora of state and federal agency standards and required almost nine years to get a final permit.

Interior Secretary Ken Salazar, to his credit, has approved six large-scale solar power projects on public lands in California and Nevada, and has moved to close the loophole and reform the process for reviewing all projects on lands under Federal management.

But renewables also continue to be subjected to unclear and inconsistent signals in terms of subsidies and tax credits, which makes investors and project developers wary of going too deep.

As the Times editorial asserts, "When the production tax credit expired at the end of 2003, development of newly installed wind capacity fell from 1,687 megawatts to less than 400 the following year."

Meanwhile, as an Environmental Law Institute study last year illustrated, fossil fuel development benefited from approximately $72 billion in subsidies and tax credits over a seven-year period (2002-2008), while subsidies for renewable fuels totaled only $29 billion overt the same period.

This kind of unlevel playing field and unfair advantage is just another reason why we have already lost the race with China and others on renewables. 

In fact, we better stop thinking about it as a race at all and begin thinking about how best to cooperate with our competitors before we are left out of this new economic opportunity altogether.

Pennsylvania: Keystone in America's Energy Future?

Image via Wikipedia

Long known as the "Keystone State," Pennsylvania is fast becoming key to America's energy future.

With some of the world's largest and best natural gas reserves found in the northwestern part of the state, significant coal reserves already providing electricity for much of the northeastern US, and the country's largest grid operator (PJM) located in King of Prussia, Pennsylvania is already an energy powerhouse.

Increasingly, Pennsylvania is attracting and growing companies in the emerging cleantech arena, including two of the world's largest wind companies (Gamesa and Iberdrola), smart grid and demand response (such as Viridity Energy), and emerging technologies from biofuels to batteries and storage.

Why this convergence? According to Pennsylvania Secretary of the Department of Environmental Protection John Hanger, several key policy decisions made over the past several years, along with efforts and incentives to attract companies from as far away as Spain and Greece, combined with the existing energy infrastructure to make the Commonwealth very attractive.

"Over 50 percent of the inquiries the state is getting from companies looking to relocate here are from the cleantech sector," Secretary Hanger told a group of business leaders at the Greater Philadelphia Chamber of Commerce's "The Future of Energy" briefing yesterday.

His remarks were echoed by Alice Solomon of Select Greater Philadelphia, who noted that of the 124 companies she's talking to about the region, 20 percent are alternative energy companies. Solomon, speaking at last week's Clean Energy Conference hosted by PennFuture in Camp Hill, said that strategic market location and a rich infrastructure are attracting these companies.

Part of that rich infrastructure statewide is the vast natural gas reserves that lay a mile-deep under much of Pennsylvania and adjacent states, known as the Marcellus Shale formation.

"Natural Gas is the bridge to the clean energy future," Secretary Hanger noted at last week's conference. "And Pennsylvania will soon produce 10 percent of the nation's natural gas. Marcellus is a game changer."

Wither coal? As my pal Gregor MacDonald pointed out in his Gregor.us post yesterday, "global coal consumption was flat in 2009, as consumption of oil and natural gas fell. Coal remains the big story, and will become an even bigger story as we head to 2015."

Secretary Hanger, when asked at yesterday's Chamber briefing about coal's future in the "clean energy" mix said two things. First, that Pennsylvania has policies in development focused on carbon capture and storage (CCS), and second, that the "coal industry must decide whether to fight a carbon constrained future or to get behind CCS and embrace that future."

The coal industry is not alone in resisting change. The natural gas industry continues to fight Pennsylvania Governor Ed Rendell's push for a severance tax on natural gas extracted from the state's reserves. Rendell's cause may have received a boost earlier this week when a gas well explosion and fire shut down drilling in Clearfield County.

"We needed a severance tax even before the accident," Rendell told reporters from the Philadelphia Inquirer.

Secretary Hanger's remarks at the Chamber were more pointed, "Every other state has a severance tax on their resources extracted. It's crazy that Pennsylvania doesn't have a severance tax in place for this incredible reserve."

Clearly, as we've argued on this blog before, there is no silver bullet to meet our energy needs and security. So, too, is there no one place that will meet those needs. Pennsylvania, however, with its combination of resources, infrastructure, supportive policies seems poised to become a "keystone" in the future of energy in the United States.

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• Pa. gas well contractor ordered to halt work (seattletimes.nwsource.com)
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• Gas Spews for Hours From out-of-Control Pa. Well (abcnews.go.com)
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"Cleantech Companies to Watch" in Philadelphia

One has an odorous solution to a growing risk...

One takes brown grease and turns it into gold (well, diesel fuel)...

One takes the wait out of recharging Electric Vehicles with the ease we've come to expect with EZPass at toll booths on the turnpike...

These were three of the promising start-ups from the mid-Atlantic region that presented  last night at the Entrepreneurs Forum of Greater Philadelphia's "Cleantech Companies to Watch" program.

Held at the Haub School of Business at St. Joseph's University in Philadelphia, the event was part of an ongoing series of entrepreneur-focused programming offered by the organization for its members.

Enersol, which we've been familiar with since last year, has developed a technology to odorize hydrogen gas. Why? Because, as Founder and CEO Patrick Flynn says, "with the growing demand for hydrogen in industrial and commercial applications there is an increased risk of accidental escape and combustion of this highly flammable, odorless gas."

That smell you smell with natural gas that tells you when you have a leak? It's added for the same reason. Without it, sensors would have to detect any leak and, while they are generally reliable, the risk of accidents increases as use of the gas becomes more ubiquitous.

Recently named one of Always On GoingGreen East's Top 50 companies, BlackGold Biofuels is no stranger to readers of this blog. (CEO Emily Landsburg was a part of the first cohort of GoodCompany Ventures last summer and we've continued to work together.)  But what was really impressive is she made this presentation -- and didn't skip a beat -- just six days after giving birth to her first child, Max, who was in the audience.

BlackGold has a patent-pending technology to convert sewer grease -- a multimillion dollar municipal pain in the, well, sewer -- into biodiesel.  Literally turning a liability into an asset. They are installing their first full-scale plant in the city of San Francisco, having beat out two west coast competitors.

Very intriguing was the final presenter, Momentum Dynamics, which is developing a game-changing proprietary technology that solves one of the biggest issues facing the electric vehicle market: it's wired. Not only that, but as inventor and CEO Andrew Daga said, full-cycle charging reduces battery life and takes a minimum of 30 minutes to charge.

So, where once the car provided freedom, electric vehicles as currently being developed require you to plug in, which means you need to be able to do so at home, office, wherever and whenever. But you can't and won't; we all forget to charge our phones, don't we?

Momentum's solution charges automatically, whether parked overnight or for just a few minutes or even while traveling at normal speeds. Think the EZPass lane compared to cash-only toll lanes.  This breakthrough gives EV drivers, as Momentum's tag line says, "Freedom to move."

"The Entrepreneurs Forum hasn't had an opportunity to focus on cleantech in the past," said Dan Ross, the EF's executive director. "But we felt it is an emerging growth area in the region."

The Forum intends to look for other ways to spotlight cleantech entrepreneurs in the Greater Philadelphia area.

"What Keeps You Up at Night?"

Lou Rappaport of Blank Rome asked me a disturbing question the other day at the MAC Alliance Conference in Philadelphia.

On the face of it, Lou's question was a simple one:

"What keeps you up at night?"

We were interrupted before I could answer, but Lou's question lingered with me.

In fact, it kept me up the past couple of nights.

By way of an answer now, here are seven things that keep me up at night:

1.) We will fail to embrace change and tackle the new green economy.

2.) We are so deeply entrenched in partisan politics that we will blow this opportunity to lead in a sector (alternative energy) that we invented.

3.) The Dems have made climate and energy a "left" issue and the right has ceded it to them. Where is the GOP leadership stepping up to fill the McCain void on these issues?*

4.) Enviros and NIMBYs will kill the energy economy transformation by blocking efforts on clean coal, nuclear, natural gas exploration, and the new electric grid just as they did with wind farms and offshore drilling.

5.) We don't have time to dither, yet we are a nation of inveterate ditherers.

6.) While we dither and dawdle, China is ready to seize the day.

7.) I don't know Mandarin.

____________________________________________
*(Note: This is deeply disappointing for the party of Teddy Roosevelt and Richard Nixon, which once led on issues now considered clean and green – and that now seems blind to this incredible opportunity for wealth generation.)

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