The Coming Disruption: Lead It or Lose It

I feel like our economy -- our very way of life -- is in a simultaneous state of suspended animation and free fall.  Like a cartoon character that has run off a cliff and hasn't yet realized there is no ground beneath it.

As I said in my talk at SXSW ECO a couple of weeks ago, I don't know whether we're going to go all the way down or we're going to catch ourselves and scramble back up top.

It seems clear we're headed for a major disruption. The question is, will we instigate that disruption or will we let it happen to us?

The Occupy Wall Street (OWS) protests are indicative of this coming disruption. In many ways, it's a welcome and refreshing sign that Americans are no longer complacent, apathetic, hedonists whose sole purpose is to consume.

My fear is that OWS gets co-opted and becomes a kind of anti-Tea Party movement for the left.  I fear that when I see folks like MoveOn.org, the unions, and extreme environmentalists jumping on board and trying to grab the reins.

Partisan ideology on both sides is getting in the way of facing the systemic problems of our way of life.

Our country is failing because we reward people who fail, cheat, and game the system.  We bail out institutions that fail to add value to the world.  And we let others create the world they want for us.

It's a perfect storm of deeply entrenched special interests, leadership incompetence, and redistribution of wealth. (Yes, that's right, I'm against redistributing wealth -- to either the one percent or the 99 percent. Wealth needs to be earned the old-fashioned way: by creating value and hard work.)

Some are calling for stronger regulation, which would inhibit financial institutions being innovative. Meanwhile, banks sit on their money and make big payouts to incompetent managers who are asked to leave and start charging fees for purchases made with debit cards to squeeze more revenue from customers.

How is that going to grow our economy?

Unfortunately, innovation in financial services is getting a bad name.  The innovations of the past decade or so -- much of what got us in the mess we're in -- were driven by regulatory or credit ratings arbitrage, and were increasingly complex, opaque, and focused on quarterly results or success for those who could manipulate the game.

Now it's time for financial innovation that is conducive to sustaining economies – to value creation rather than value destruction, and that drives a new kind of prosperity.

I've been thinking about financial services as an engine of change because we're not going to make real and lasting change – or build a new economy – if money can’t be made while doing it. Altruism is great, but it won't trump greed.

So what if financial services firms clearly demonstrated their community, social and environmental impacts?

What if banks told their customers what they did with their money?

What if customers were rewarded for making sustainable choices?

What if there was a greater connection between money and values, and management was compensated for maintaining or growing that connection?

What if profit and purpose were more equitably connected?

What if sustainability wasn't an add-on, but was part of the DNA of our enterprises?

What if, instead of a triple bottom line, we talked about a single, redefined bottom line that encompasses all three: profitability, environmental health, and social well-being?

Is it even possible for us to make this shift without regulation or with better regulation or, better yet, with self-regulation?

Whatever the answer to the above questions, it's clear a disruption is coming.  We need to decide whether we will lead it or lose it.

Philadelphia Ranks 5th in Brookings' Clean Economy Tally

A report released yesterday, “Sizing the Clean Economy,” which is based on the Brookings-Battelle Clean Economy Database, ranks the Philadelphia metro area 5th among the 100 largest metro areas for overall size of its share of the clean economy in the US.

The database from which these data are derived is a collaborative effort of Brookings Metropolitan Policy Program and the Battelle Technology Partnership Program. 

The report ranks the size, growth, and geography of the “clean” economy in the US, which it defines as "economic activity—measured in terms of establishments and the jobs associated with them—that produces goods and services with an environmental benefi t or adds value to such products using skills or technologies that are uniquely applied to those products."

Philadelphia has, according to the study,  54,325 "clean" jobs.

Other points of interest to the region:

• Philadelphia's 54,325 clean economy jobs make up 2.0 percent of all jobs in the region.
• Between 2003 and 2010 Philadelphia added 6,573 clean jobs.
• On average each clean economy job in Philadelphia produces $15,693 in exports.
• Estimated median wage in Philadelphia's clean economy is $43,913; compared to $42,722 for all jobs in Philadelphia.

New York had the most clean jobs at 152,034, followed by Los Angeles (89,592); Chicago (79,388); and the DC metro area (70,828).  The Greater Boston area topped in at 41,825 jobs, landing the 8th spot.

According to the study, "the clean economy grew more slowly in aggregate than the national economy between 2003 and 2010, but newer 'cleantech' segments produced explosive job gains and the clean economy outperformed the nation during the recession."

The report points to the recently established energy innovation hubs, such as the Greater Philadelphia Innovation Cluster for Energy Efficient Buildings (GPIC), as an important factor in continued growth for the sector. 

Among the other recommendations for scaling up the clean econmy, the report's authors suggest, "Ensure adequate finance by moving to address the serious shortage of affordable, risk-tolerant, and larger-scale capital that now impedes the scale-up of numerous clean economy industry segments."

They also recommend the creation of a water sciences innovation center and the establishment of a regional clean economy consortia.

"Metropolitan areas, large and small, are now and will increasingly be the nation’s critical centers of clean
economy talent, innovation, and finance and so its top hubs of commercialization, deployment, and trade," the report concludes. "Regions and metropolitan areas, in short, are not a part of the national clean economy; they are that economy."
 
You can find interactive maps here to dig deeper into the findings.

China Leads in Cleantech, But Partnership Provides US Opportunties

Chris R. Brown

There are a number of credible voices on China and cleantech on Twitter.  One you may have overlooked is Chris R. Brown (@chrisrbrown).  He writes the China Solar Energy blog.  I recently interviewed Chris for The Green Skeptic.

Chris worked as a China policy analyst for US Naval Intelligence and the Defense Intelligence Agency and, later, as an analyst and researcher with Gerson Lehrman and Ergo Advisors.  He is now an independent consultant and freelancer. He holds a Master's in China Studies from the University of Washington, where he focused on Xinjiang, Kyrgyz language, Uyghur culture, and China energy issues.

 

We both recognize there are opportunities for the US and China to cooperate and collaborate on cleantech innovation. What are some of the opportunities with the best potential in your view?

Two opportunities with the best potential are: 1) US-China joint cleantech research and 2) US companies selling manufacturing equipment to Chinese PV module, cell makers. 

There has been a surprising amount of money both governments have pledged to research.  They have set up the $150 million US-China Clean Energy Research Center (CERC) that will support cleantech research on both sides of the Pacific.   

The best example of a US company profiting from China's commitment to cleantech research is Applied Materials and its Solar Technology Center in Xi'an.  It's the largest non-government solar energy research facility in the world. Several of the top Chinese PV companies are gearing up for increased production and companies that sell equipment used in manufacturing will do well.

I am less optimistic about US companies getting involved in China's domestic solar projects.  The country's solar market is still extremely small and major projects have run into difficulties.  I had high hopes for the First Solar utility level solar PV project in Ordos, Inner Mongolia and the eSolar CSP project in Yulin, Shaanxi.  The First Solar project is still live though behind schedule.  The eSolar project, however, seems to be dead in the water.

What advice do you have for US companies that want to work in China?

First find a strong, reliable partner.  There are layers of relationships that need to be maintained from the provincial government, provincial party leadership, municipal government, municipal party, sometimes provincial NDRC office and, with higher profile cases, national level NDRC and the utility companies.  Having a Chinese partner who you can trust is huge for maneuvering this complex web of relationships.

Another thing to keep in mind is that China should be treated as a collection of smaller countries in terms of energy policy.  This is why "Is China ahead of the US in developing clean tech?" is such a tricky question.  In level of investment, yes; in actual implementation and having grid-connected solar wind electricity, no.    

What are some of the Chinese companies you are watching?  How about US companies with a big China upside?

I am very interested in successful US-China partnerships.  One of my favorites is the ENN and Duke connection.  They have agreed to jointly work on solar projects in North Carolina and there are rumors they will be working together in Nevada on utility-level solar projects.

I watch Suntech closely.  I am particularly interested in their setting up a manufacturing plant outside of Phoenix, Arizona.  Why would a Chinese company set up manufacturing facilities in North America rather than taking advantage of the cheaper labor, property cost in China?  Suntech says that they are positioning themselves for a greater share of the future North American solar market. 

Santa Clara-based Applied Materials is doing interesting things in China.  They are one of the companies that sell manufacturing equipment to the Chinese PV cell and module makers.

What are your thoughts on China's pollution problem? Do you think China can continue to build its new green economy on the "back" of dirty air, water, and resource exploitation?

First of all, I wouldn't say China is particularly 'green'.  The current Beijing government is concerned with one thing - regime survival.   Energy is a problem because the Party's legitimacy rests on maintaining their high rate of economic growth. 

Lack of energy will cripple the economy and possibly lead to unrest.  China's growth rates since the early 70's have been the main piece of evidence the CCP has to prove that its strategy is working.  A slump due to energy shortages could seriously erode the Party's power.  So, Beijing is looking for any type of energy.  Yes, they are investing in solar but they are also investing in coal, nuclear.

Beijing is concerned about pollution but only when it could cause instability.  In some parts of the country, pollution has become serious enough that the central government takes it seriously but only when it is a health issue.  Being 'green' as some sort of global, save-the-planet consciousness doesn't interest them.

Who wins the cleantech race, China or the US? Does it matter?

Several studies over the last year or so have shown that China is investing more money in cleantech than the US.  There doesn't seem to be much debate there.  The people who say China is not winning the cleantech race point to the non-existence of a domestic solar market.  Chinese PV companies are geared for export. 

So, some say China is just cleverly taking advantage of the subsidies the rest of the world is pumping into cleantech to artificially prop it up since nowhere has grid parity. 

These same critics say that projects like First Solar's utility-level PV plant in Ordos, Mongolia are Potemkin Villages meant to fool the world into thinking China is 'green'.

Critics say China will never be serious about developing a domestic solar market while coal is so cheap. 

I disagree.  China is serious about developing a domestic solar market but implementation is a problem.  Beijing is serious about developing a solar market, first and foremost, because it would prefer to consume its own PV products.  China recently released its 12th 5-year plan and developing a domestic solar market is an important part of the plan. 

What's next for Chris Brown?

I am working with US and Chinese companies to facilitate cooperation and exchange.  I spent years analyzing China as a potential threat in the US intelligence community.  Now my big goal is to work to help the two sides profit while strengthening the world solar market.

Related articles

• First Solar, Chinese partner to develop projects (seattletimes.nwsource.com)
• GE Invests in Solar Thermal Developer (GE, GOOG, TAN, KWT) (247wallst.com)
• China keeps top spot in Ernst & Young Renewable Energy Country Attractiveness Indices (sunnergyinfo.wordpress.com)

Global Clean Energy Investment $243 billion; US Drops to 3rd

Once the top dog in clean energy, the United States dropped to third place in terms of investment, falling further from the top spot it held in 2008, with only $34 billion in private clean energy investments.

China continues to lead, according to a new report by the Pew Charitable Trusts, attracting a record $54.4 billion in clean energy investments in 2010 -- a 39 percent increase over 2009 and equal to total global investment in 2004. Germany saw private investments double to $41.2 billion and was second in the G-20, up from third last year.

"The clean energy sector is emerging as one of the most dynamic and competitive in the world, witnessing 630 percent growth in finance and investments since 2004," said Phyllis Cuttino, director, Pew Clean Energy Program. "In 2010, worldwide finance and investment grew 30 percent to a record $243 billion."

The good news is: investment in clean energy has bounced back from the recession, at least globally.  The question is, will the US be able to keep pace in the years to come?

That China leads will come as no surprise to readers of The Green Skeptic.  That the US is slipping further down the ladder is more disturbing to those of us who see the new green economy as a platform for our competitiveness in the global marketplace.

Related articles

• U.S. Drops To Third Place in Clean Energy Investment (blogs.forbes.com)
• U.S. drops to 3rd in clean-energy investment (scientificamerican.com)
• Clean energy investment hits record high (financialpost.com)
• U.S. drops to 3rd in clean-energy investment: Pew (reuters.com)
• China tops 'clean energy league' (bbc.co.uk)
• Does It Matter Which Nation Leads In Alternative Energy (247wallst.com)

Canadians More Likely than Americans to Believe in Climate Change?

More Canadians than Americans believe climate change is real, according to two surveys of public opinion on climate change commissioned by the Public Policy Forum and Sustainable Prosperity.

Their findings indicate that belief in climate change among Canadians outpaces that among residents of the United States.

In Canada, 80 per cent believe in the science behind climate change, according to the survey results, compared with 58 per cent in the United States.

Taking it a step further, 65 percent of Canadians believe the government has a role to play in addressing climate change; whereas only 43 per cent of Americans feel that way.

The poll also shows 73 percent of Canadians surveyed are willing to pay to address climate change. Canadians demonstrate a higher degree of support for both cap and trade policies and carbon taxes than the American public. Only 55 percent of Americans in the survey support such measures.

In fact, a majority of Canadians respondents are willing to pay up to $50 a month in extra energy costs to address the issue.

The United States survey was conducted by the Muhlenberg College Institute of Public Opinion in Allentown, Pennsylvania and funded by both Muhlenberg College and the Center for Local, State, and Urban Policy at the Gerald Ford School of Public Policy at the University of Michigan.

The Canadian survey was conducted by Leger Marketing in Montréal Québec and was funded by the Public Policy Forum and Sustainable Prosperity, with additional financial support from Internat Energy Solutions Canada.

For more on the survey: Sustainable Prosperity

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President Obama Speaks at Penn State About Clean Energy

Last Thursday, President Obama spoke at Penn State about "encouraging and investing in innovation and clean energy technologies to create new jobs, grow the economy, and win the future."

Here is a video of the speech:




And here is a link to a transcript of the speech: Obama at Penn State

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.


 

Volatility Alert: Crude Is Rising, But Not Because Of Demand

Business Insider had an interesting post yesterday: "Just in time for Christmas, On Wednesday, Dec. 22, U.S. gasoline prices hit an average $3 a gallon for the first time in more than two years, according to AAA's Daily Fuel Gauge Report. Meanwhile, U.S. stocks and oil also climbed to the highest levels since 2008."

In the piece, Dian Chu speculates that "if the stars are aligned, that is, global economy [is] really picking up steam with two consecutive months of good U.S. jobs numbers, inflation concerns and QE could form a perfect storm for crude to hit $110 to $115 a barrel late March or April next year, after a few retracements, and if it breaks above $100. At that level, gasoline at the pump could hit $3.70-$3.80 a gallon range."

Read it here:

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Gore Now Says Corn Ethanol "Was Not a Good Policy"

Traded Corn for Votes?

Despite being a proponent of corn ethanol policy in the past, former vice-president Al Gore now says corn-based ethanol in the United States was "not a good policy."

His comments, made at a green energy business conference in Athens, came as tax breaks for ethanol are up for renewal at the end of this year.

According to the International Energy Industry, ethanol subsidies reached US$7.7 billion last year and biofuels as a whole garnered more subsidies than any other form of renewable energy.

"First generation ethanol I think was a mistake," said Gore. "The energy conversion ratios are at best very small." But, he went on to say that it is difficult to change such programs once strong lobbies keep it going.

He blamed his own support on his presidential ambitions.

"One of the reasons I made that mistake is that I paid particular attention to the farmers in my home state of Tennessee," Gore offered. "And I had a certain fondness for the farmers in the state of Iowa because I was about to run for president."

In other words, Gore wanted support from the corn lobbies for his failed presidential candidacy.

The unintended consequences of ramping up US corn ethanol production became apparent in 2008 when food prices skyrocketed, in part because of the conversion of food crops to biofuel production.

This year, according to Goldman Sachs analysts, the ethanol industry will consume about 41 percent of US corn or about 15 percent of the corn crop worldwide.

We've been saying for some time that corn ethanol was the Abilene Paradox of alternative energy, in which a group of people collectively decide on a course of action that is counter to their better judgment.

With all the folks who jumped on the bandwagon standing to benefit from the widespread production -- from farmers and producers in the US Midwest to presidential candidates -- it appears self-interest may have been the real driver of the ethanol-powered bus to the west Texas town.

Related articles

• At Long Last, Al Gore Thinks Ethanol Subsidies Are a Bad Idea (reason.com)
• "Gore: corn-ethanol subsidy "not a good policy"" and related posts (qando.net)
• Al Gore Opposes Corn-Based Ethanol Subsidies (independent.org)
• Al Gore's mea culpa for corn ethanol support (msnbc.msn.com)
• Report: Al Gore Reverses View on Ethanol, Blames Politics for Previous Support (foxnews.com)

GOP Bob Inglis Goes 'On-the-Record' About Climate Change

Whatever you think about Bob Inglis (R-South Carolina), you've got to hand it to him for going out "on-the-record" on climate change and calling out his peeps for missing the commercial opportunity.

Here's a clip of his remarks via ThinkProgress:




And here are some of the best bits:

Kim Beazley who's Australia's ambassador to the United States tells me that when he runs into a climate skeptic, he says to them, "Make sure to say that very publicly, because I want our grandchildren to read what you said and what I said."

Tom Friedman gave me this great analogy yesterday -- Your child is sick. 98 doctors say treat him this way. Two say no, this other way is the way to go. I'll go with the two. You're taking a big risk with those kids. Because 98 of the doctors say, "Do this thing," two say, "Do the other."...

And I would also suggest to my Free Enterprise colleagues -- especially conservatives here -- whether you think it's all a bunch of hooey, what we've talked about in this committee, the Chinese don't. And they plan on eating our lunch in this next century. They plan on innovating around these problems, and selling to us, and the rest of the world, the technology that'll lead the 21st century.

So we may just press the pause button here for several years, but China is pressing the fast-forward button.

And as a result, if we wake up in several years and we say, "gee, this didn't work very well for us. The two doctors didn't turn out to be so right. 98 might have been the ones to listen to." Then what we'll find is we're way behind those Chinese folks.

Because you know, if you got a certain number of geniuses in the population -- if you're one in a million in China, there's 1300 of you. And you know what? They plan on leading the future.

So whether you -- if you're a free enterprise conservative here -- just think: it's a bunch of hooey, this science is a bunch of hooey. But if you miss the commercial opportunity, you've really missed something.

We have a lot of people who make a lot of money on talk radio and talk TV saying a lot of things. They slept at a Holiday Inn Express last night, and they're experts on climate change. And those folks substitute their judgment for people who have PhDs and work tirelessly to discover the data.

US and India to Cooperate on Clean Energy

Image by aquaview via Flickr

Reuters reported this morning that the United States and India will cooperate on clean energy projects, including shale gas development.

Indian Prime Minister Manmohan Singh and U.S. President Barack Obama told a press conference today that the two countries will partner on a research and development center for cleantech, energy, and other green solutions in India.

" We have announced specific initiatives in the areas of clean energy, health and agriculture," Prime Minister Singh said in his remarks. "These include a joint clean energy research and development center, the establishment of a global disease detection center in India, and an agreement for cooperation in weather and crop forecasting."


The partners will provide annual funding of $5 million each for five years, which they hope will generate matching investments from the private sector.

"We agreed to deepen our cooperation in pursuit of clean energy technologies, including the creation of a new clean energy research center here in India, and continuing our joint research into solar, biofuels, shale gas and building efficiency," Mr. Obama said at the press conference reported by Reuters.

More information is available on this Fact Sheet on US India Partnership (PDF).

Green Skeptic Friday LinkFest - 07/30/10

Calvin on the Beach @ OKI.

A vacation edition of The Green Skeptic's Friday links.

I've been on the North Carolina coast this week and haven't been paying close attention to the web and Twitterstreams, but here are a few things from some of my pals that caught my eye from the beach:

Two posts from Julian Wong of The Green Leap Forward about the "battle" between China and the US for the leadership position in cleantech: US Clean Energy Investment at Home Is Best Response to China and Julian's testimony before the US-China Commission: Of Solar Tech and Chicken McNuggets.

Chris Nelder published "Beyond Carbon Legislation: Energy Transition," in the wake of the US Senate Climate Bill being declared DOA.

Gregor MacDonald pointed us to Amory Lovins of the Rocky Mountain Institute's 2000 predictions about coal consumption trends, evolution in the auto industry, and future world oil production Optimism, harsh realism, and blind spots—10 years later.

Gregor also had this to say about California as the Governator declared a state of fiscal emergency for the state: Collapse is a Process.

Finally, CleanTechies posted "A Price for the Volt, But None for Carbon.

Have a great weekend. I'm back from vacation next week.

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Video: Cleantech Alliance Mid-Atlantic Spring Event

A video of the Cleantech Alliance Mid-Atlantic Spring Networking Event, featuring Terry Cooke's talk on Cleantech and China is now available. (The editors were too generous with my introductory remarks, but you'll get a sense of the event from the opening sequence.)



Here is a link in case you can't see the player: http://youtu.be/yeTBSSjJeQk

A more comprehensive account of Terry's remarks can be found here: http://bit.ly/aa3Vb9

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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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MIT Energy Conference Influences National Legislation

A fun note for a Friday: The MIT Energy Conference, which I covered in March here, here, and here was cited by US Senator Jeff Bingaman when he introduced Supply Star Act of 2010, a bill designed to bring about energy-efficiency improvements in supply chains, much like Energy Star has done for appliances.

The Senator indicated that the idea for the bill came from this year's MIT Energy Conference, where he and his staff were particularly influenced by a panel discussion titled, "Supply Chain Energy Use: Exposing Opportunities for Innovation in a Global Economy. (link to video)"

Bingaman specifically mentioned the MIT conference, saying that the hurdles surrounding optimization of supply-chain energy consumption "were discussed in some detail by an expert panel. The hurdles include a lack of information and analysis tools for important parts of far-flung supply chains, which often lie far upstream or downstream (and therefore out of sight) of a particular firm, as well as a lack of leverage with which to drive global suppliers toward more efficient practices."

The bill, Bingaman said, is aimed at helping to address this lack of tools and information.

Kudos to the student organizers of the energy conference for making an impact.

For more information: Student-run MIT Energy Conference influences national legislation

Jack Donaghy and the Future of Manufacturing in America

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Jack Donaghy is the archetypal American businessman.  He's a striver who thinks he can get to the top through hard work, innovation and creativity -- and okay not a small dose of cronyism -- really, by making things.

But, Jack, played by Alec Baldwin, is a dying breed.  As he points out in last night's episode of 30 Rock, we've become a nation of consumers rather than a nation of makers.

Jack's company has been bought by a cable network from (ahem) Philadelphia, which as one character says in the episode, "doesn't make anything and has no expectations of innovative ideas from its executives."

Despite this, Jack is determined to make something, to use his creativity to create value.

"We need to get back to doing what American businessmen do best," Jack tells his new colleagues. "Making things."

I think Jack is onto something.  And I'm reminded of a conversation I had a couple of weeks ago with Sheila Kennedy of Kennedy & Violich (KVA) in Boston.

Sheila is an architect, designer, and innovator.  She makes things.  Beautiful things.  Practical things.  Some of the things she makes are going to change the world.  Actually, they are already changing the world.

Her Portable Light Project, for example, is bringing flexible photvoltaics into fabricated products that can be integrated into blankets, handbags, or other useful items to provide a small amount of energy to charge a cell phone or provide lighting for rural villagers without access to power grids.

Soft House is another project of KVA MATx.  Soft House transforms household curtains into a set of energy harvesting textiles generating up to 16,000 watt-hours of electricity -- about half the daily power needs of an average American household.

Sheila makes things.  Yet she was telling me that we've lost the art of making things.  Prototypes, for instance.  It's getting increasingly difficult to find someone in this country to actually make a prototype.  If a designer wants a prototype, she very often has to go overseas to get it made.  Why?

We have become a nation of consumers and packagers and marketers of other people's fabrications.  We've even taken to referring to our economy as a "service economy," as if all we can do now is serve others.  And serve them what?  OPM -- other peoples' makings.

It's really quite extraordinary.  And we're seeing it now in the cleantech sector, too.  The manufacturing, research and development in the sector is shifting oversees, has been for years, but is starting to accelerate now as China, India and others ramp up their capacity to make the products and technologies to meet the energy needs of the future. 

When our economy gets too far from the art of manufacturing, of making real, tangible things, it's a bit like what Ezra Pound said about poetry getting too far from music; it begins to atrophy.

There are some hopeful signs, as Sheila and I discussed.  One of these is Etsy, a consumer web marketplace for other peoples' makings; specifically handmade products, art, books, jewelry, handbags, woodworking, and almost everything else you can imagine.

"Your place to buy and sell all things handmade..." is a great tag line.  We need more hopeful efforts to rebuild manufacturing in this country.  The future of manufacturing in America may be smaller, more localized production and distribution, and it certainly requires a more patient, long-term view.

Perhaps then Americans can get back to what we do best, as Jack Donaghy says: making things.

While We Consider, China Constructs

When Duke Energy and ENN Group announced their partnership to accelerate development of low-carbon and clean energy technologies at the Clinton Global Initiative last September, Duke CEO Jim Rogers explained that "We must move at 'China speed' to combat global warming."

"China," Rogers explained, "is leading the world in investing in clean energy and we can make greater progress by joining forces and working together."

This was no less evident today at the MIT Energy Conference, where a distinguished panel shed light on what "China Speed" really means.

It means, according to Dr. Ning Li, Dean of the School of Energy Research at Xiamen University, that China's 2020 target of 30GW of wind capacity will be met by midyear -- that's this year. (They set that target in 2007.)

It means that China's new target for 100GW of nuclear power by 2025 will probably be met in record time as well.

The country currently has 26 new nuclear facilities under construction, compared to around the same number "under consideration" in this country, according to Dr. Andrew Kadak, Professor of the Practice of Nuclear Science and Engineering at MIT.

"Nuclear is now 'Made in China,'" said Dr. Kadak.

While we consider, China constructs.

It means that while we debate about technologies and subsidies and "buy American," the Chinese are "learning and innovating by doing," as Dr. Ning Li titled his remarks on the panel.

It means that a company like Gold Wind can, in just a few short years, go from licensing a German technology to buying the manufacturer to becoming a Top 10 company in its own country.

And it means that when Applied Materials is looking for the best place to site one of its largest R&D facilities, they look to China because of the "synergistic benefits of the largest market for its solar products," as Dr. Hongmei Zhang of ENN Group put it.

Fears of a cleantech race with China are surfacing throughout the US, and some are saying those fears are unfounded.

But, the reality is while we consider, China constructs. They are building the infrastructure of the energy future while we can't seem to get our heads out of the oil sands.

"You should think of China as a stimulating threat rather than a competitive threat," said Dr. Hongmei Zhang, with genuine hope that we might heed her advice.

But, as she also said in her remarks, Americans tend not to listen as well as Chinese.

Indeed, Hongmei noted, "In China, when president Hu says we will do this, we answer, 'yes sir.' In the US, the answer is "says who?"

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Pass or Fail? Obama's State of the Union and Clean Energy Future

Did President Obama pass or fail on energy in last night's State of the Union address?  I wasn't watching, but I've read the transcript.  Here are some of the choice bits:

"We can put Americans to work today building the infrastructure of tomorrow. From the first railroads to the Interstate Highway System, our nation has always been built to compete. There's no reason Europe or China should have the fastest trains, or the new factories that manufacture clean energy products."

Totally agree. We are already losing the clean energy race and need to do a lot to catch up.

"We should put more Americans to work building clean energy facilities and give rebates to Americans who make their homes more energy-efficient, which supports clean energy jobs. And to encourage these and other businesses to stay within our borders, it is time to finally slash the tax breaks for companies that ship our jobs overseas, and give those tax breaks to companies that create jobs right here in the United States of America."

Okay. A little protectionism, a little nod to a giving something back to Americans for investing in efficiency.

"I am grateful to the House for passing such a bill last year. And this year I'm eager to help advance the bipartisan effort in the Senate. I know there have been questions about whether we can afford such changes in a tough economy. I know that there are those who disagree with the overwhelming scientific evidence on climate change. But here's the thing, even if you doubt the evidence, providing incentives for energy-efficiency and clean energy are the right thing to do for our future, because the nation that leads the clean energy economy will be the nation that leads the global economy. And America must be that nation."

I'm not sure passing the current Senate effort is the right thing to do. I think cap-and-trade is dead on arrival now and we need to shift the focus on innovation and investment. The important phrase in the above remark is

"...the nation that leads the clean energy economy will be the nation that leads the global economy."

Can we get there? I'm not convinced we have the political will or that Obama can carry the day. His approval rating sucks and new polls are pointing to a continuing decrease in belief among Americans in climate change. But I do agree that we can't afford to wait any longer, as the President put it last night

"China's not waiting to revamp its economy; Germany's not waiting; India's not waiting. These nations, they're not standing still. These nations aren't playing for second place. They're putting more emphasis on math and science. They're rebuilding their infrastructure. They're making serious investments in clean energy because they want those jobs."

The President also said he does not "accept second place for the United States of America." Second place? In many respects we are already in third and the leaders are pulling away.

And we're not going to get there without massive investment in innovation, as Bill Gates said in his blog last week, we need "a distributed system of R&D with economic rewards for innovators and strong government encouragement is the key. There just isn't enough work going on today to get us to where we need to go."

I disagree with Gates that it is either efficiency or innovation; this is a false dichotomy. We need to fire on all cylinders. Just as with the President's nods to nuclear, offshore drilling, and "clean coal" last night, which were not just bones to GOP dogs, we need to deploy all solutions --and now.

I'm just not sure whether President Obama, rhetorical skills aside, has the political capital to wrangle the support he needs to make the necessary bold steps.

As for the speech, I give him a B-.

Cantwell-Collins: Want $100/month with Your Emissions Cuts?

The Cantwell-Collins "cap-and-rebate" climate bill, known as the Carbon Limits and Energy for America's Renewal Act (CLEAR), proposes refunding 75 percent of all revenue collected back to U.S. residents in a monthly check of about $100 per family of four.

Tim Hurst over at Ecopolitology has a good analysis of the bill proposed by Senators Maria Cantwell (D-Wash.) and Susan Collins (R-Maine), which they claim would reduce greenhouse gas emissions of 20 percent by 2020 and 83 percent by 2050. And without the messy offset program that would be hard to monitor and regulate.

As Peter Barnes wrote in On the Commons, Cantwell-Collins provides "a simple, transparent cap-and-dividend system that returns higher carbon prices directly to consumers and allows only minimal carbon trading. It would cap fossil fuel suppliers like Exxon-Mobil and Peabody Coal, rather than emitters like utilities and steel plants, because it's much easier to catch carbon when it enters our economy than when it leaves."

Barnes explains "it would auction all carbon permits and avoid giveaways, market distortions and offsets. And it would put a 'collar' on the price of carbon permits in order to limit market volatility."

Critics of the bill, however, argue that it will be slower to deliver on reducing emissions (see chart) and will leave little revenue left for investments in clean technologies.

This Bill has garnered some interesting support, such as Dr. Kenneth P. Green at the American Enterprise Institute, which may give it a leg-up over the Kerry-Lieberman-Graham Climate Bill. But, as Tim Hurst rightly points out, "getting any climate legislation passed before November, 2010 is going to be problematic, to say the least."

Camille Ricketts also takes a hard look at the two Senate proposals in VentureBeat's GreenBeat

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