Grid Parity Blog - Green Chip Review

Baltimore Plastic Bag Tax

Polluters in Baltimore breathed a sigh of relief yesterday after the Baltimore City Council balked on any meaningful legislation that would reduce the use of plastic bags in the city. You know, the ones that decorate skeleton trees in the winter and float on the black glassy reflections of the Inner Harbor.

Not only have these plastic bags sucked a bit of the aesthetic charm out of Charm City, they also maintain an economic burden on the city, as removing these plastic bags from our water ways is not a free service offered by those who hand them out like paper towels at the grocery check out.

There was a proposal to charge consumers $0.25 per bag. But that was shot down. Instead the City is demanding the following:

Stores can only give plastic bags out if they participate in a program aimed at reducing the number of bags on the streets. Fines for noncompliance would range from $100 to $1,000. I'd be interested to know how often these stores would be checked. I suspect that if a store gets hit with a yearly bill for anywhere between $100 and $1,000, nothing will change.
Customers will only get plastic bags if they ask for them. That really adds a lot of bite to the bark of this poodle.
Retailers have to collect plastic bags and recycle them. Of course, there is nothing that would require customers or incentivize customers to actually bring them in to be recycled. And by the way, according to the EPA, only about 1 percent of all plastic bags in this country are recycled anyway. So perhaps we should ask ourselves, does it make more sense to require plastic bag recycling or just get rid of the bags altogether?
Retailers must also post signs encouraging customer to use reusable bags. Well, we all know how well signs work to encourage people in this city. Those "Drug-Free Zone" signs have really done a bang-up job.
Retailers must report back to the city on how many plastic bags they've distributed. Yeah, those numbers won't be distorted. Because clearly, the retailers who have fought quite effectively against plastic bag bans and taxes are going to provide the city with accurate data.

Now don't get me wrong. I know that there are some folks on the City Council who have worked tirelessly to help clean up this city. And I applaud them. But clearly the lobbyists have won at slowing the progress on curbing plastic bag pollution. And you better believe that over the next year, they're going to go full force trying to convince us that plastic bag taxes are a bad idea.

But I'd prefer to look at the data, and ignore the rhetoric.

I'd prefer to look at Ireland, where a $0.30 plastic bag tax was passed back in 2002. Within weeks of the new tax, there was a 94 percent drop in plastic bag use. And for those who did shell out the thirty cents - about $9.6 million was raised and earmarked for a green fund.

And in China, after a ban on super thin plastic bags was introduced, plastic bag usage fell by 66 percent and saved the Middle Kingdom 1.6 million tons of petroleum. Because yes, all those wonderful plastic bags are made with petroleum. Want to cut our use of foreign oil? Stop using so many damn plastic bags!

Of course, I'm not so naïve to believe that this is an easy fight. The resistance has been strong. And the truth is, if you want to get anything accomplished in this world, you do have to make compromises. But how much longer can we "compromise" on this stuff?

These plastic bags have become an environmental and economic burden that no one seems to be willing to pay. So the way I see it, if you can't pay for something, then you can't have it.

It's not rocket science.

It's a basic concept you learn as a child. And it's a basic concept that we better start remembering soon.

Although you're given these bags at your local grocery store, they are NOT free.

There is a cost associated with these things. You may not be paying for them at the checkout now, but rest assured, your tax dollars pay to get them out of the trees and out of the harbor. Your tax dollars pay to move them and dump them in the landfills. Your tax dollars continue to subsidize the oil industry too, which makes a pretty penny off of our irrational reliance on these plastic bags.

Just something to think about the next time the cashier at your local supermarket offers you a plastic bag for a gallon jug of milk or a candy bar!

To a new way of life, and a new generation of wealth. . .

Jeff

"Cap and Trade" Bill Rebranded

"Cap and trade" is a term being used to define a bill passed by the House of Representatives last year.

Under the bill, Washington would impose steadily declining limits on the levels of carbon pollutions that companies are permitted to emit.

The pollution permits companies would be required to hold would be traded in a regulated financial market.

The bill, which is being met with resistance primarily by Republicans, has been stuck in Senate since last year.

Republicans refer to the controversial plan as "cap and tax" and are working to kill the bill.

Resistors argue that "cap and trade" will decrease employment rates and raise energy costs.

Senator Joseph Lieberman, an independent from Connecticut, is trying to dispel the negative connotation that comes with the title "cap and trade" by rephrasing the nickname of the bill.

Instead, Lieberman uses the term "pollution reduction targets."

In the past year, other ideas have been discussed for controlling carbon emissions.

Some options include a carbon tax, a "cap and dividend" plan, and a "cap and trade with training wheels" program, where an independent board would set a narrow price range for carbon for eight years in order to give markets experience in trading permits.

Although the bill remains stuck, Lieberman says it is still possible utilities may be subject to a cap and trade system.

However, rebranding "cap and trade" with the title "pollution reduction" probably won't be enough to sway stubborn conservatives in its favor.

Until next time,

Hilary

California Legislation Introduces New Energy Storage Incentives

Assembly representative Nancy Skinner and California state Attorney General Jerry Brown are backing a bill that will require utilities to obtain 2.25% of their peak power from storage systems by 2014, and 5% of their peak power from storage by 2020.

Right now, peak energy demand for the state of California is 29,000 megawatts by grid operator California ISO.

That means that the state will need to store 1,450 megawatts in order to comply with the goals outlined in the new legislation.

The bill - AB 2514 - is the first of its kind to be introduced at the state level, though the state's Self Generation Incentive Program already offers incentives for energy storage at industrial and commercial sites.

The new legislation will help consumers cut back on their energy costs while at the same time supplying thousands of permanent new jobs.

Advanced energy storage solutions would also make other renewable sources of energy (such as wind farms and solar arrays) more useful by storing the electricity they generate.

Energy storage technologies vary in their power capacities and discharge durations. They also include mechanical, chemical, and thermal processes for storing energy for use at a later time.

Flywheels, for example, provide short-term storage - they only store energy for a few seconds or minutes. They are, however, already relatively economical.

Persistent storage systems that can store energy for hours (or store power generated during off peak hours for consumption during peak periods) are not as economical.

Right now, batteries used in persistent storage systems sell for $500 per kilowatt hour. In order to make persistent storage systems work long-term, the price needs to be lowered to $250 or below.

Pacific Gas & Electric is just one of a few utilities that are already moving forward with plans to develop energy storage systems.

PG&E is currently building a 4-megawatt sodium sulfur battery station in Silicon Valley and a 300-megawatt compressed air storage facility with a gigawatt-plus pumped hydro station.

The compressed air field being developed by PG&E will be able to store energy at $120 per kilowatt.

Another company, SustainX, is also building an industrial compressed air storage system, but it remains mostly in the experimental stage.

Ice Energy, a company located in southern California, has partnered with utilities to install 53 megawatts of its ice-powered air conditioners in the region.

Ice-powered air conditioners shift air conditioning - a peak power function - to nighttime.

By simply installing ice-powered air conditioners, some utilities will be able to hit their 2014 goals in the near term.

Worldwide, approximately a gigawatt of grid storage has been installed. In the U.S., storage has been primarily a theory. Until now.

If AB 2514 gets passed, energy storage may evolve from a theory into a reality.

Until next time,

Hilary

Renewable Energy Capacities by Country

Information provided by Global Energy's Alternative Energy eTrack allows for a greater understanding of the renewable energy capacities of the global community. Below are the top ten countries' energy capacities, as they correlate to various renewable energy sources.

The United States leads the way in wind power capacity, with Germany and China following not far behind.

Wind Power

1. United States - 35,296 MW
2. Germany - 25,777 MW
3. China - 25,104 MW
4. Spain - 19,149 MW
5. India - 10,925 MW
6. Italy - 4,850 MW
7. France - 4,492 MW
8. United Kingdom - 4,051 MW
9. Portugal - 3,535 MW
10. Canada - 3,319 MW

Hydro power is most available in China by more than twice the MW of Brazil, the country with the second largest capacity. The United States has the third largest capacity for hydro power.

Hydro Power

1. China - 179,056 MW
2. Brazil - 81,955 MW
3. United States - 78,054 MW
4. Canada - 75,287 MW
5. Russia - 46,756 MW
6. India - 39,546 MW
7. Norway - 29,317 MW
8. Japan - 22,089 MW
9. France - 20,850 MW
10. Sweden - 16,266 MW

Germany's capacity for photovoltaic solar power is roughly 6 times larger than that of the U.S. However, the United States still has the largest capacity of concentrated solar power.

Solar (PV) Power

1. Germany - 6526.00 MW
2. Spain - 5504.76 MW
3. Japan - 2347.00 MW
4. United States - 1487.71 MW
5. Italy - 908.59 MW
6. Republic of Korea - 557.60 MW
7. France - 253.42 MW
8. China - 223.00 MW
9. India - 223.00 MW
10. Australia - 114.39 MW

Solar (CSP) Power

1. United States - 900.0 MW
2. Spain - 130.0 MW
3. Australia - 37.0 MW
4. Mexico - 25.0 MW
5. Algeria - 20.0 MW
6. Morocco - 20.0 MW
7. Italy - 5.0 MW
8. N/A
9. N/A
10. N/A

The range in capacities for geothermal power as a renewable energy resource is drastic. The United States has roughly 3000 more MWe of geothermal energy available than the Russian Federation, which ranks tenth on the list.

Geothermal Power

1. United States - 3153.0 MW
2. Philippines - 2195.3 MW
3. Indonesia - 1132.0 MW
4. Mexico - 965.0 MW
5. Italy - 810.0 MW
6. New Zealand - 577.0 MW
7. Japan - 535.0 MW
8. Kenya - 169.0 MW
9. Turkey - 83.0 MW
10. Russian Federation - 81.0 MW

Germany has by far the largest capacity for energy available from biogas, a type of biofuel that can be used as a low-cost fuel for any heating purpose. When compressed, biogas can also be used to power motor vehicles. In the UK alone, biogas is estimated to have the potential to replace 17% of vehicle fuel.

Biogas Power

1. Germany - 3,594 MW
2. United Kingdom - 1,425 MW
3. United States - 1,047 MW
4. Italy - 477 MW
5. Australia - 427 MW
6. Spain - 194 MW
7. Netherlands - 130 MW
8. France - 120 MW
9. Canada - 117 MW
10. Sweden - 64 MW

Biomass energy, derived from living or recently living organisms, is most heavily available in the United States. Several countries have large capacities for biomass as a renewable energy resource.

Biomass Power

1. United States - 9,391 MW
2. Germany - 5,890 MW
3. Sweden - 4,522 MW
4. Brazil - 3,970 MW
5. Japan - 2,834 MW
6. Netherlands - 2,531 MW
7. China - 2,381 MW
8. Finland - 2,352 MW
9. India - 2,117 MW
10. Canada - 1,885 MW

There are renewable energy resources available in countries around the world. The next step is figuring out how to utilize them...

Until next time,

-Hilary

Colorado Passes New Renewable Portfolio Standard (RPS)

Last Friday, the Colorado State Senate passed H.B.1001, increasing the state’s renewable portfolio standard (RPS) to 30% by 2020.

Governor Bill Ritter is expected to sign the bill when the House passes it through.

The bill also mandates that 3% of total electricity sales come from distributed generation systems such as distributed solar. These systems will allow energy consumers to lower their electricity bills and enable utilities to avoid expensive investments in new transmission systems.

Additionally, H.B.1001 requires that half of all solar projects developed by investor-owned utilities be located on rooftops or within the distribution network.

In doing so, the bill is expected to deploy 700 MW of solar generation.

If that same requirement were expanded to include all state electricity producers, Colorado could see a total of 1,000 MW of solar power

That much solar power could create more than 33,500 jobs for the state’s renewable energy economy and produce $4.3 billion in total economic output.

Shortly after H.B.1001 passed the Senate, Governor Ritter announced the Colorado Clean Air-Clean Jobs Act. The act is primarily a move away from outdated coal-fired power plants.

Colorado isn’t the only state committed to a clean energy economy. Some 28 states and the District of Columbia have their own renewable portfolio standards.

Nevertheless, the long-term success of renewable energy depends on legislative action by Congress.

The push for a national standard that would increase the country’s RPS to 20% by 2020 is being met with resistance by legislators from coal producing states that claim their states don’t have the same renewable resources as other states.

However, certain bills are beginning to reflect the necessity for a boost in renewable energy standards.

The Waxman-Markley climate change bill, for example, contains provisions that would establish a national RPS. Still, controversy in Congress is holding up the process.

Perhaps Colorado’s H.B.1001 will provide some encouragement to those still holding out in D.C.

Until next time,

Hilary

Pickens Plan: Game Back On

After putting the plan on hold due to transmission issues, T. Boone is once again ready to proceed with the wind portion of his plan for U.S energy independence.

He says he'll disclose the location of a 500 megawatt plant in the next 30 days, though the Dallas Morning News has reported that approximately 300 General Electric (NYSE: GE) turbines are being sent north - to either Canada or Minnesota - for the proposed farm.

Pickens recently told the Wall Street Journal that "economics favor wind power with natural gas prices around $7 per BTU." But with natural gas seemingly in free fall - trading around $4.60 - the billionaire hasn't been pursuing wind as aggressively.

Perhaps his most recent move is a sign the industry is in for a good year. Stimulus funds should continue to be dispersed, and two large farms have already been announced - 845 MW in Oregon and 600 MW in Texas, supplied by GE and A-Power Energy Generation (NASDAQ: APWR), respectively.

If you're looking for broad exposure to the wind industry as it gets back in gear, an ETF like First Trust Global Wind (NYSE: FAN) or Power Shares Global Wind (NASDAQ: PWND) is a great way to go.

Call it like you see it,

Nick

Cash For Caulkers

President Obama is set to outline today the details of the "cash for caulkers" program.

With a price tag of about $6 billion, the program will provide incentives for folks to make their homes more energy efficient. Whether its new insulation, energy efficient windows (which I can tell you from personal experience can save you a small fortune in energy costs), or any other major or minor energy upgrade, the new program is designed to stimulate job growth and help consumers save a few bucks on energy costs.

There's no doubt that improving efficiency is one of the easiest and quickest solutions to our energy woes. And I suspect there will be few political obstacles on this one.

Of course, "cash for caulkers" isn't quite as sexy as "cash for clunkers." Consumers tend to be more interested in the cars they drive than the insulation in their attics. So it will be interesting to see how they promote it.

Nonetheless, this should provide a quick boost to those companies that will undoubtedly benefit from this program, like Owens Corning (NYSE:OC), Home Depot (NYSE:HD) and Lowes (NYSE:LOW). Of course, given the state of today's still very-fragile market, who knows if it will be enough to matter much. It really has become a never-ending battle of optimism versus broader market reality.

But the very real benefits of energy savings could still make this program worthwhile. Long-term economic sustainability depends on smart energy decisions today. Making our homes more energy efficient is definitely a step in the right direction.

Jeff

Arizona Anti-Solar Bill Defeated

On Wednesday, I told you about a new Arizona bill (House Bill 2701) that was designed to essentially kill the state's solar industry. It was intended to allow nuclear and hydroelectric power to be included in the state's renewable energy standard, which requires 15 percent renewables by 2025. With nuclear and hydroelectric inlcuded, there would have been zero incentive to integrate solar or any other type of clean, renewable energy.

The new bill would've also done away with the state's distributed energy standard, which requires 30 percent of all renewable power produced by utilities to come from rooftop systems.

Well, it looks like that bill was killed on Thursday after a flood of opposition forced a few less-than honorable policy makers to backpedal.

One very influential opponent to the bill was Suntech Power (NYSE:STP), which made it crystal clear that the state could very well lose the company's new manufacturing facility that would ultimately end up creating a lot of jobs for currently-unemployed Arizona residents.

Of course, it didn't take long for one bureaucrat to complain that the Legislature was being unfairly criticized as being anti-solar. According to House Speaker Kirk Adams, the Legislature has done several things in the past year to bolster the solar industry's efforts. Particularly SB 1403 which provides incentives for bringing high-wage manufacturing to the state.

So the question is, if these guys are so pro-solar, why would any of them support a bill that would essentially gut the industry's progress in the Grand Canyon state?

It's all politics. It's always politics with these guys. But thankfully, enough folks were fired up enough to let these guys know that solar will not be an afterthought in the state's energy mix.

Jeff

Arizona Solar Bill

What an absolute joke!

I have no other way to describe how I felt after reading about Arizona's House Bill 2701.

Essentially this bill would allow nuclear and hydroelectric power to be included in the state's renewable energy standard, which requires 15 percent renewables by 2025.

Now I'm not here to bash nuclear, but this is Arizona folks. The state has some of the most impressive solar resources in the world! If there's any state in the U.S. that should embrace solar, it's Arizona.

Of course, all of this clearly smells of politics.

There's absolutely no reason any honest policy maker in the Grand Canyon state should want to deter solar progress. It's a job creator, it's a source of clean energy, and it helps alleviate the need for rapidly depleting fossil fuels.

The new bill would also get rid of the state's distributed energy standard, which requires 30 percent of all renewable power produced by utilities to come from rooftop systems. What a great way to kill even more jobs!

This is an absolute travesty, and those who have introduced and supported this bill should be held accountable for their actions. Especially Representative Debbie Lesko, who apparently objected to a $4 per month fee for residential customers that supports Arizona's renewable energy standard.

My question is, does Lesko object to the millions of dollars that hard-working Americans shell out to subsidize oil, coal, natural gas and nuclear?

Don't urinate on my leg and tell me it's raining!

This is bureaucratic bullshit at it's finest. Somebody's getting a kickback here, and it ain't the good people of Arizona.

Jeff

Bloom Energy IPO?

So Bloom Energy was featured on 60 Minutes last night. Now what?

Well, apparently the piece has incited fuel cell and IPO fever - neither of which may be justified.

A spot on 60 Minutes is great, and draws plenty of national attention. After the airing, Bloom Energy related keywords were occupying five of the ten hottest Google searches in the country.

And the results, quite frankly, were disturbing. I even found one article claiming Bloom could be publicly listed by this Wednesday.

Of course, that would be comparable to a virgin birth, since Bloom hasn't even filed the necessary paperwork yet.

If you really want to stay on top of new and exciting cleantech companies like this one, perhaps you should read these pages a bit more frequently.

I squashed the Bloom Energy IPO rumors back in November. And I got the info directly from the horse's mouth, John Doerr... the billionaire venture capitalist who's backing the venture.

Here's what I had to say then:

According to Doerr, the main hurdle facing cleantech is its capital intensity.

He said it took $25 million and 3 years to bring Google to an initial public offering (IPO).

Compare that to Bloom Energy, a Doerr-backed fuel cell company. Bloom has already gobbled up $250 million and seven years. Doerr said it'll be nine years before they think about an IPO, even though it has "substantial revenues and orders."

According to Doerr, there is simply more "capital required to grow a great green company." And that's what has delayed major investment - both public and private - thus far.

So no, there's no Bloom Energy stock symbol just yet. But we'll be sure to pass news along should they file for an initial public offering (IPO). If you want to learn more about the company, here's a link to their site.

Call it like you see it,

Nick

Tea Party Alternative Energy

I have to be honest. I don't know much about the Tea Party movement. But as someone who sees our two party system as offering little more than the illusion of a real and effective democracy, I applaud any group that stands up and forces the status quo to take notice.

In fact, after doing a little research, it seems to me that the Tea Party - based on their core beliefs - should actually be a very pro-alternative energy party.

You see, there's little doubt that the Tea Party champions real fiscal responsibility. No more excessive taxes, a balanced budget and no excessive national debt. This is all great stuff, and you'll get no argument out of me.

But if we take a look at where we are today, you will find that much of our economic burden can be traced back to our reliance on fossil fuels. Certainly the tax burden is real.

According to the Environmental Law Institute, from 2002 to 2008, subsidies for fossil fuels totaled approximately $72 billion. And for those quick to play the "renewable energy can't compete without subsidies" card, know that during the same time, subsidies for renewables came to about $29 billion. And of those renewable subsidies, more than half were set aside for corn-based ethanol - providing even more kickbacks for an already heavily-subsidized agricultural system that typically excludes small, local and organic farms.

You can read the details of that report here.

There was also a very interesting study that came out a few years ago that showed the security costs of having the U.S. military protect the oil supplies of the Persian Gulf. That bill came to around $44 billion in 2007.

And don't forget that little-known, and somewhat hidden DOE study from 2000 which found that oil supply disruptions, price hikes and loss of wealth suffered through oil market upheavals have cost the U.S. economy around $7 trillion (in 1998 dollars) over the thirty years from 1970 and 2000.

My friends, that's more than half the total U.S. national debt!

Now you won't see any of this stuff figured into the equation when you pull into the gas station. But the truth is, if we weren't directly and indirectly subsidizing our reliance on oil, we'd be shelling out anywhere between $8 to $10 a gallon for 87 Octane.

That's not a free market. That's a welfare scam. And you better believe that if we were paying the real cost of gasoline, it wouldn't take long for the entire country to rally around Plug-In Hybrid Electric Vehicles, high-speed rail and expanded mass transit, and more walkable communities.

Of course, many, including Tea Party supporters have championed increased domestic oil production as the solution to our oil supply problems.

But if the Tea Party is legitimately concerned about national security (which from what I've read, they clearly are), then I would think their support for domestic drilling (at least as far as it being the solution to our energy woes) would be very limited.

I'm not so naïve to believe that we can transition our energy economy without a continued reliance on domestic oil. But it cannot be looked at as anything more than a transitional vehicle. Because the truth is, domestic oil production can never meet our total consumption needs.

As far as domestic offshore oil is concerned (and this is where most of our domestic supplies can be found), the DOE's Energy Information Administration tells us that we have about 59 billion barrels of "technically recoverable undiscovered" offshore oil. This is not proved reserves, by the way.

However, the USGS tells us we have about 85 billion barrels of "technically recoverable undiscovered" offshore oil. So let's play the role of the optimist, and go with the USGS numbers.

Now U.S. demand is around 6.7 billion barrels per year. Assuming there were 85 billion barrels of domestic offshore oil for us to consume, this would give us about a 12.7-year supply. And that's based on current rates of consumption and the assumption that there will be no demand increase going forward. Clearly not a safe assumption to make.

Then there's ANWR, which the USGS tells us could deliver about 16 billion barrels - or about a 2.4-year supply.

So between ANWR and offshore, we're looking at about a 15-year supply. But don't forget flow rates.

Even if we tapped every ANWR and domestic offshore resource today, the flow rate of that oil would still dictate how much we can produce. That would come in at around 3 million barrels per day. Sorry folks, that's not going to cut it.

Of course, we do have those tar sand resources. Although with a limited history, we have little in the way of good data on long-term production rates. There's also the issue of net energy return. In the case of these tar sands operations, you'll find that most legitimate energy analysts will agree that it takes more energy (primarily natural gas inputs) to produce this oil than is actually delivered. For those trying to make a quick buck, this is not an issue. But for the sake of long-term energy security, this is not something we can rely on for our future transportation fuel needs.

Treehugging Tea Parties?

I would also make the case that the Tea Party movement should support an aggressive environmental agenda.

You see, I have noticed that Tea Party supporters are very vocal about the right to protect themselves and their families, often focusing on the importance of the 2^nd amendment as a way to secure this right. Bottom line: You have every right to protect and defend yourself. And I certainly support that right every step of the way.

But just as I have the right to protect myself from a home invasion or a car jacking, don't I also have the right to protect myself against those who are harming me and my family by poisoning our air and water?

Think about it. You can't live without clean water. And if you want to see what toxic air can do to you, take a look at the average lifespan of a Beijing traffic cop, which is 43. It ain't car accidents and lack of job fulfillment that are to blame. If you've ever had the opportunity to wade through the thick smog that blankets Beijing during rush hour, you know exactly what I'm talking about.

So, it seems to me that Tea Party members would agree that it's completely acceptable to do whatever you can, legally, to protect yourself and your family from any operation that denies us clean water and air.

These include, but are not limited to. . .

Tar Sands Operations - It takes between two and four barrels of water to extract one barrel of oil from a tar sands operation. And once the water has funneled through the production process, it becomes toxic, and cannot be released back into the environment. While some is reused, most is pumped into large settlement ponds that become polluted with heavy metals. In Alberta, a recent University study found that the expansion of the sands projects there could kill the Athabasca River - the only abundant source of water in the area, supplying fresh water to two northwest territories, 300,000 aboriginal people and the Mackenzie River Basin, which is Canada's largest watershed. Are we going to do that to our own water supplies for a few years of oil?
Coal-Fired Power Generation - A typical 500 MW coal-fired power plant draws about 2.2 billion gallons of water each year from nearby lakes, rivers and oceans; relies on the transportation of coal, which relies on subsidized petroleum; and generates 170 pounds of mercury. It only takes 1/70^th of a teaspoon in a 25-acre lake to make fish unsafe to eat. Kind of puts a damper on that next fly fishing trip, huh?
Industrial Agriculture - Industrial agriculture has become a huge drain on our resources. Irrigation systems are pumping water faster than they can be refilled, an over reliance on pesticides is disrupting the food chain, and massive amounts of synthetic fertilizers are draining into our water systems causing algae blooms to form. These algae blooms can suffocate marine life that many hard-working Americans rely on for food and income-generation.

So how do you protect yourself from these operations?

You stop giving them your tax dollars, and you add in every bit of environmental damage to their operational costs. It's not a new concept. You make a mess, you clean it up.

Will that trickle down to the consumer? You better believe it. But if you want a real free market, you better be ready to start paying the real, unsubsidized costs for goods and services. I don't know about you, but I prefer that to what we have now - a system that takes your hard-earned money and hands it out to folks that are making your water unsafe to drink, and your air unsafe to breathe.

Of course, when you stop subsidizing the oil, coal and industrial agriculture machines, you quickly see the real value of clean energy generation and responsible, non-polluting agricultural systems.

No matter how you slice it, there is just much less in the way of water and air damage with renewable energy, energy efficiency and conservation measures and sustainable agricultural systems. Not to mention, with alternative energy sources, you also get an extra bang for your independent buck.

It's no secret that the Tea Party desires freedom and independence. I proudly wave that flag too, and believe those who seek real independence must also be staunch environmentalists and alternative energy advocates.

Think about it...

With solar PV on the roof or a residential wind turbine in the backyard, you can produce clean energy and become completely independent of the grid. This ultimately provides economic independence as well as energy independence.

And with your own personal garden or greenhouse, you can grow your own fruits, vegetables and grains - thereby eliminating the reliance on heavily subsidized agriculture. And take it one step further by going organic. This eliminates the reliance on pesticides and synthetic fertilizers - both of which require fossil fuel inputs to create. Fossil fuels that are, you guessed it - subsidized.

In theory, it does seem that the Tea Party's call for fiscal responsibility, free markets, and personal liberty makes it a strong environmental and alternative energy champion.

But will they put their money where their mouth is?

Will they support alternative energy integration and environmental protection and preservation?

If they truly practice what they preach, they will.

If not...

Well, they'll prove to be nothing more than just another bullhorn for empty rhetoric, and just as useless as the jackass and the elephant.

Jeff

Cellulosic Ethanol Plant Opens

Corn cobs and switchgrass don't get much respect in the world of food and industry, but would-be waste is steadily being converted to fuel more cheaply than ever.

Using actual kernels of corn to produce ethanol fuel was deemed by most of the investing community to be too inefficient in its production to justify the process. Intensive water and land usage—as well as corn price surges and subsequent "tortilla riots" in Mexico—made corn a liability on large projects. At the beginning of 2010, we're seeing more momentum in more efficient sugarcane ethanol, and in cellulosic ethanol, which is made from plant-based agricultural waste.

DuPont Danisco, a joint venture between the American chemicals giant and a Danish company, is opening a demonstration plant in Tennessee in February where cellulose-rich corn cobs and switchgrass will be converted to fuel.

The goal is to churn out 250,000 gallons of renewable fuel each year, at a cost competitive with $90 a barrel oil. That means each gallon will need to take about $5.50 per gallon to make instead of the current $8, so DuPont Danisco is working closely with crop scientists and fuel experts to bring those input costs down.

By 2012, investors and researchers hope to reach the point where production can begin in earnest.

-Sam Hopkins

Climate Change Kauai

The following is the final installment of a three-part series that examines opportunities and challenges confronting Kauai in the new decade. Click here to read part one and part two.

KAUAI-One of the best ways to predict the future is to simply make it happen, according to David Burney, a paleoecologist and conservation director for the National Tropical Botanical Garden.

Yet at the beginning of this new decade, the future of Hawaii's wildlife includes the sobering reality that a large number of plants and animals may go extinct by 2020. Nearly 25 percent of all federally listed threatened and endangered species in the United States are native Hawaiian flora and fauna. Approximately 90 percent of native Hawaiian plants and animals exist nowhere but the Hawaiian Islands.

Already documented to be growing warmer, drier, and more prone to flooding, scientists at the University of Hawaii and elsewhere say climate change in Hawaii will impact every ecosystem from reefs and wetlands to dry, mesic, and wet forests in the highlands. In considering how these changes, combined with the advance of invasive species, will affect Hawaii's plants and animals in the next decade and beyond, Burney is blunt.

"Possibly dozens of plant species will go extinct in the next 10 years. Quite a few are incredibly close right now despite a lot of talented, innovative people focusing on conservation," Burney says. "But there are some rare species that, if recent successes in conservation strategies continue to work, may become less rare and quite a few may hold their own."

Pointing to successful recovery efforts of the nene and the recent introduction of bio-control agents to fight the erythrina gall wasp, Burney says he is hopeful but adds that more progress needs to be made in controlling invasive plants and animals. The big question, he says, is how invasive species will react to climate change.

Rapidly changing weather patterns and altered rainfall distribution will continue to be critical factors for conservation, agriculture, and ordinary life, Burney says. But he is not a proponent of "freezing in the dark," as he puts it. Instead, Burney favors progressive, pre-emptive measures to mitigate the effects of climate change.

"Conservation cannot be separated from larger, global issues," Burney says. "‘How are people going to get everything they want out of this planet?' is a huge philosophical, even theological question."

Along with the threat of extinction, Burney expresses concern about rising sea levels and coastal issues.

"The land needs to be managed like an entire pie, not just around the edges like a donut," Burney says.

He says provisions need to be made for coastal wetlands, pointing out the importance of approaching land management on the ahupuaa or watershed level.

Despite the enormous challenges facing Hawaii's wilderness and environment, Burney remains optimistic. The alternative, he says, is extreme pessimism.

"If we don't think we can deal with these problems, we won't," Burney says. "I am willing to work for it."

Another Kauai-based scientist is Chuck Blay, a sedimentary geologist and educator who is well-known for documenting the geologic character of Kauai after he walked the perimeter of the island in 1986.

Blay is accustomed to examining changes over eons, not decades. He points out that while beaches take tens to hundreds of thousands of years to form, sea level rise, beach erosion, and reef degradation bring changes in centuries or even decades.

If climate change produces more frequent and intense storms, then coastal erosion, offshore loss of sand, and subsequent stronger rip tides like those which followed Hurricanes Iwa (1982) and Iniki (1992), could become more commonplace. However, based on historical records, Blay says there is a much greater probability of a large tsunami impacting the Hawaiian Islands in the next decade or two.

"Everyone was freaked out by Iwa and Iniki, but historically hurricanes have not been as frequent as major tsunamis over the last century. Hurricanes tend to lose energy as they move into northern latitudes. Plus they have a hard time hitting these islands which are just tiny dots in the middle of an ocean that takes up half the hemisphere of the planet," Blay says.

Considering current building codes which place great emphasis on wind and hurricane tolerance, Blay urges builders, planners, and policy makers to give more consideration to the possibility of a major tsunami.

"The human species," Blay says, "is crisis-driven. We don't take care of things until we really have to. Whether it's conservation, peak oil, climate change or whatever, it's that last-minute desire to avert coming catastrophe that often motivates people."

And while Blay nor anyone else can predict natural disasters, he says it is highly probable that by 2020 there will be some sort of unpredictable global catastrophe that will make all other changes-both good and bad-seem insignificant.

Keone Kealoha is the executive director of Malama Kauai, a Kilauea-based nonprofit organization that encourages sustainable practices, relocalization, and the advancement of environmentally and socially responsible systems. Kealoha suggests that changes we make now, as a community, will minimize the adverse effects any such event could have at a later date.

The outlook of many top-tier economists is worrying Kealoha, he admits, but says that barring an unforeseen large-scale disaster, he is hopeful that at the end of the new decade people on Kauai will be living more in concert with locally available resources. He envisions the Kauai of 2020 as having a larger, better developed network of community-based resource management systems.

Kealoha points to the intersecting trajectories of diminishing natural resources, tighter controls of those resources through globalization and corporatization and the threat of climate change as creating a sense of urgency around the world. He sees one way to mitigate the impacts of any future collapse through organizing the public and recreating basic power structures.

The last decade's dramatic advances in communications technology have made it possible for pockets of like-minded people, sometimes continents apart, to exchange knowledge and information in real time to effect change. Whether it's resisting political ineffectiveness at a global climate change conference in Copenhagen, exposing police brutality in St. Paul or Tehran, or opposing an unwanted ferry in Nawiliwili Harbor, internet-based communications have enabled people to cooperate at a grassroots level like never before.

"The changes coming our way are going to be a lot bigger than we now realize," Kealoha says. He asserts that the current model of government in the U.S. is essentially broke (and broken) and doesn't believe government can live up to its potential good without changing policies that impede the flow of financial and human resources to where they are most effective.

"Ultimately I see people being the agent of change with the government falling in line behind the people," Kealoha says.

"We are going to see big chunks of the system chip off. If we have trusting community relationships and places for knowledge transfer already in place, it will be much easier to weather big system breakage, whether this means shortages of food, energy, housing materials, or other essential resources."

We are already living in a state of emergency, Kealoha says, but don't realize it because things haven't stopped yet. He points to the unsustainability of our current food import model saying, "Not everybody is going to be able to eat strawberries and blueberries whenever they want."

By the end of the new decade, Kealoha envisions people on Kauai spending a lot more time in their local communities. People will likely work, socialize, and get food closer to home.

Kealoha wants to be part of helping people on Kauai make the transition to becoming more self-sufficient, better integrated with the natural environment, and better able to withstand any future storm whether it is of internal or external origin.

"Now we are at the point where we are seeing the effects of what happens when we don't take care of that which takes care of us," Kealoha says. "Kauai is absolutely sustainable. We have all the resources here, but we are not currently managing them to fully realize all the island has to offer. We've applied a Western economic model over the top of what this place truly is-the mountains, the water, the soil-but ultimately nature will always prevail."

The system Kauai operates under now, as Kealoha sees it, is flawed. He says the current political-economic model is based on accumulation and making "the bottom line."

"I'm focused on building networks and models that work within the current framework as viable and inspiring choices that can also weather any worst-case scenario," Kealoha says.

He urges people on Kauai to make these shifts now while the changes are fun and exciting: "It feels good to take control over your own destiny. It's exciting to build a system of self-determination that offers a degree of personal sovereignty. ... If our systems collapse, these are the solutions we are going to have to find anyway. If we do it now, we're going to be that much further ahead."

**Jon Letman is a freelance writer in Hawaii. He writes about politics, society, culture and conservation on the island of Kauai. You can read the original articles here and here.

EPA Critic Murkowski

This week, Alaska Senator Lisa Murkowski may offer an amendment limiting the Environmental Protection Agency's authority to regulate greenhouse gas emissions.

At the same time, Murkowski is also one of the top three Senators in Congress favored by the oil and gas industry, receiving $142,000 in contributions in 2009. Since 2005, Murkowski has received a total of $244,000 from the energy industry, according to the Center for Responsive Politics.

It seems as no surprise that what naturally follows are accusations of undue influence over the Senator on one side and denial of those accusations on the other. What is most apparent is at least an appearance of the possibility of a conflict of interest.

Indeed, one critic, Clean Air Watch president Frank O'Donnell, tells Greenwire (sub. required) that he doubts Murkowski's entire motivation for hobbling the EPA is from the source of her campaign contributions. But "it's hard to avoid the impression that it's a factor," he said. "I don't believe you can buy a senator for $50,000, but you can certainly rent one."

A little help from her friends

Beyond a financial influence over Murkowsi's position on the Clean Air Act, Murkowsi's detractors point at industry lobby influence in drafting legislation. The Washington Post reported last week that two energy lobbyists, Jeffrey Holmstead and Roger Martella, Jr., helped Murkowski write a failed amendment proposal last fall that sought to block the EPA from imposing greenhouse gas regulations on stationary sources for one year.

Holmstead heads up the Environmental Strategies Group at Bracewell & Guiliani. Martella is a partner at Sidley Austin. Two of Holmstead's clients - Southern Co. and Duke Energy Corp. - are among Murkowski's largest contributors. Federal lobbying records show that at least five others, including Ameren Corp., Arch Coal, Energy Future Holdings, CSX Corp., and Progress Energy, have also contributed to Murkowski's war chest.

Holmstead acknowledged in an interview working with Murkowski and her staff on the amendment. "I was involved... I certainly worked with her staff," he said, though he denies playing any role in drafting the language for the amendment proposal last fall. Murkowski also maintains that lobbyists held no sway in the text of the document.

Holmstead also says he has no knowledge of his clients campaign contributions, including those made to Senator Murkowski.

Some industry representative have come to the Senator's defense, pointing out that environmentalists are also involved in drafting legislation.

"Senator Murkowski should not be begrudged candid discussions of the Clean Air Act with legal experts any more than her opponents should be criticized for accepting drafting help and contributions from well-heeled environmental groups," said Scott Segal, a lobbyist with Bracewell and Guiliani.

Duke Energy spokesman Tom Williams said there is nothing unusual for "people from all sides of the aisle to comment on legislation. To suggest it's somehow nefarious or inappropriate for one side to do it is inconsistent with reality." Williams has declined comment on Duke Energy's involvement with either Senator Murkowski or Bracewell & Guiliani.

Public interest groups and environmental groups aren't buying it.

The difference, says Tyson Slocum, director of the energy program at Public Citizen, is that lobbying firms are paid for by private companies. While that in itself certainly isn't unusual, "It's rare that we have a lobbyist publicly acknowledging ... ‘Hey, I played a role in this.' There are bad things that happen all the time, and that doesn't necessarily make them right."

"Not only do we have campaign contributions,' Slocum said, "but now we have evidence of active legislative collaboration by a lobbyists representing special interests."

Public Citizen, along with MoveOn.org and public interest groups, are calling on Murkowski to return any campaign donations she received from Holmstead's energy industry clients.

"I think it makes Murkowski's amendment positively radioactive," said Frank O'Donnell from Clean Air Watch, "because it makes it look like she's simply carrying water for businesses that gave her money."

And through all this sits the great state of Alaska, which Murkowski ostensibly represents. A state that is warming faster than most any other place on the planet.

DOE Wind Report

The U.S. Department of Energy's National Renewable Energy Laboratory has just released its latest study on the technical, operational and economic issues facing the integration of increased wind energy.

According to the report . .

There are no fundamental technical barriers to the integration of 20% wind energy into the electrical system, but transmission planning and system operation policy and market development need to continue to evolve in order for these penetration levels to be achieved;
Without transmission enhancements, substantial curtailment of wind generation would be required for all of the 20% wind penetration scenarios;
Interconnection-wide costs for integrating large amounts of wind generation are manageable with large regional operating pools, because increasing the geographic diversity of wind power projects in a given operating pool generally makes the aggregated wind power output more predicable and less variable, while also reducing the variation in load and increasing the number of generation assets that can be committed and dispatched;
Although the costs of aggressive expansion of the existing grid are significant, they make up a relatively small piece of the total annual power system costs in any of the scenarios studied;
Wind generation displaces carbon-based fuels, directly reducing carbon dioxide emissions. Emissions continue to decline as more wind generation is added to the energy supply; and
Reduced expenditures on fossil fuel costs more than pay for the increased costs of transmission in all wind scenarios.

The newly published report consists of wind resource assessments, transmission studies and wind integration studies.

Jeff

Sustainable Kauai Tourism

The following is part two of a three-part series that examines opportunities and challenges confronting Kauai in the new decade. Read part one here.

KAUAI-If tourism has been the central pillar that has supported Hawaii's economy for the last half century, the question of what role it will play in the coming decade cannot be ignored. Between 2000 and 2010, Kauai and the rest of the state saw how external forces like terrorism in New York, disease in Hong Kong, a war in Iraq, or global economics and energy costs can dramatically and immediately impact tourism and the entire island's economy.

Internal events like the cessation of cruise ship arrivals, collapse of airlines and extreme weather events like the severe rains of 2006, and Kaloko Dam failure also affected the tourism-based economy. Roller coaster-like boom and bust development trends, shortages in rental cars, and the ongoing debate about hotel development and how much to limit vacation rental accommodation also impacted Kauai in the last 10 years and will almost certainly continue to do so in the new decade.

The future of tourism remains a big question mark. Can tourism rebound? If so, when? Some ask if it should come back at all. Kapaa-based green economist Ken Stokes of the Kauaian Institute asks not when the tourists will be back, but which ones will return.

"Some of the best futurists at UH presented four scenarios," Stokes says. "In these, not a single one indicated anything like mass tourism in the ten to twenty year horizon."

Stokes cites what he calls a "morality and consciousness," which he believes will make some people think twice about continuing to fly great distances to Hawaii.

"Your global share of carbon output is the equivalent to one airplane trip to the West Coast," Stokes says. "That's for an entire lifetime."

The upper tier of the travel market is fairly solid, Stokes says, but he expects mass tourism to "fall away" as the overall contribution of tourism to the island economy declines.

Sue Kanoho, executive director of the Kauai Visitors Bureau, looks at the future of tourism on Kauai from another perspective. She sees much of Kauai's market the result of available accommodation.

"If properties shift to fractional or timeshare units, those are the kind of visitors we get. First time visitors tend to stay in hotels," Kanoho says, referring to the large number of return visitors to Kauai.

The type of accommodation offered, the condition and capacity of harbors and airports, and the level at which Kauai can comfortably welcome visitors will continue to be key considerations in the decade ahead, says Kanoho.

"On an island, it's important to acknowledge the capacity for certain areas," she says. Kanoho refers to talk of the Department of Land and Natural Resources limiting the number of permits issued in order to preserve environmentally delicate places, just as camping permits are already limited now.

"We may be a destination that requires planning a vacation further in advance," Kanoho says, pointing out that advance planning is part of having a destination where the quality of experience is more important than the quantity.

"Kauai is not a fast food drive-thru," Kanoho says.

She concedes that other destinations like Mexico or the Caribbean may be closer, quicker, and cheaper to the mainland than Kauai, but says the quality and uniqueness of Kauai will remain a draw for those willing and able to spend for tropical vacations.

"Everyone has their breaking point. When you hit $1,000 or $1,200 round-trip airfare (to Kauai), some people will consider other destinations," Kanoho says.

In the coming decade Kanoho doesn't foresee Kauai becoming a solely exclusive destination that only serves the high-end market.

"That's just not who we are and I don't think that's what people want," she says. Kanoho expects Kauai will remain a laid-back, rural, natural destination.

Recognizing that a few years ago there was a palpable tension as increasing numbers of people on Kauai felt the island was being lost to development, Kanoho says there have been concerted efforts to respond positively to those concerns and that the island is no longer on a "slippery downward slope."

"We need to ask Kauai, ‘what does she want to be when she grows up?' That's not just a KVB question, but one for the leaders and people of Kauai."

Visitor industry trends like "voluntourism," growth in both Korean and Chinese travel markets, untapped potential in the Japanese market, and a greater emphasis and commitment to sustainable and green practices in the tourism sector are all likely to become even more prominent in the coming decade, Kanoho says. But she cautions: "Whatever your goals might be ten years out, in less than a day an event like September 11 or an airline closing suddenly can change your whole world."

Adam Asquith, a taro farmer and managing director for Kauai Farm Fuels, a biodiesel manufacturer in Hanapepe, says that big changes are coming to Kauai-you can bet on it. Asquith envisions a Kauai 10 years from now that is subject to the effects of global fuel shortages. He imagines $200 a barrel oil making travel to Kauai unaffordable for all but the wealthiest travelers.

Visitor arrivals on Kauai could be half that of 2010, he says, with many hotels closed and those that remain offering free vehicles and fuel as a gimmick to attract occupants. $10-per-gallon gasoline would mean that bicycles would be as common as cars on the road and the horse would return as a viable means of transportation.

By 2020, Asquith says many people on Kauai will have installed wind, photovoltaic, or battery systems in order to gain some energy independence as electricity rates rise to more than a dollar per kilowatt hour. He envisions 20 percent unemployment, frequent blackouts, and people returning to hunting and fishing for sustenance, rather than recreation.

On the bright side, Asquith expects Kauai in 2020 to be a place where neighborhood and farming communities have turned to small, independent energy grid systems or locally produced plant oil (kukui, coconut), ethanol, and wood gas. Asquith says surf breaks will be uncrowded, traffic non-existent and nearly everyone will maintain a garden or farm.

According to Asquith, 10 years from now, "parties will be more frequent, larger and last longer. We will thrive in household economies that would have been considered abject poverty in 2010, but kupuna will remark that Kauai is now a lot like it was when they were growing up."
In 2020, Asquith says, "we will have rediscovered what our kupuna had-a sense of place."

Part III, the final installment in this three-part series, will examine possible changes to Kauai's natural environment and communities in the new decade.

**Jon Letman is a freelance writer in Hawaii. He writes about politics, society, culture and conservation on the island of Kauai. You can read the original article here

Battery Industry Challenge

INTRODUCTION: For your edification this long weekend: In this posting, we return to address in greater detail the faulty assumptions underlying the conclusion by the National Research Council's (NRC) fuel cell analyst team that it would be a mistake to commit to plug-in vehicles because battery costs will remain high for over a decade.This report has gained wide attention. And on the same day that GM opened its new Michigan battery plant, the Boston Consulting Group (BCG) released a study saying it would take decades for plug-ins to become competitive without subsidies.

We believe BOTH reports are mistaken and are already being eclipsed by industry developments.

Real-world information is already a step ahead of their assumptions. Battery and auto manufacturers would not be spending tens of billions of dollars on factories to support over a dozen new plug-in vehicle models unless they saw a long-term path to low-cost, competitive components. We back this up below with citations from multiple sources — including just-in news of the first response from a National Lab to the NRC report.

We hope they will deter these reports' unquestioned acceptance by journalists, analysts and legislators. Read to the end and you'll find our explanation of how these studies affect the US Department of Energy's future plans. And you'll see our call to some missing voices — battery manufacturers and automakers besides GM and Nissan — to release some vital proprietary information. Multiple constituencies need the full story to understand battery economics and help shape public and private strategies. This is all-important as priorities are being set in Washington and across the globe.

REMINDER ON OUR INITIAL RESPONSES: This posting goes beyond our December "Plug-In Community Needs to Respond to Outdated/Biased NAS Report" on the National Academy of Sciences/NRC document. (See other comments on our posting at http://green.autoblog.com/2009/12/22/squaring-off-again-plug-in-advocates-respond-to-anti-phev-repo/ and http://blogs.edmunds.com/greencaradvisor/2009/12/plug-in-backers-say-recent-slow-growth-phev-report-has-hydrogen-bias.html .) And in three postings last April (all found at http://www.calcars.org/news-archive.html ) we and others criticized BCG's report for the President's Automotive Task Force.

NRC CRITICISMS BOILED DOWN: Here we focus on just the central organizing assumption they presume will dramatically limit EV and PHEV acceptance through the next decade: high battery costs. Most notably, the reports say today's PHEV battery packs can cost well over $1,000/kilowatt-hour. They see it taking 10 years for packs to drop from $1,000+ to the $400/kwh necessary to make unsubsidized EVs and PHEVs competitive. Even by 2030, the NRC says the battery premium for a Volt-like PHEV with a 40-mile range would still be over $10,000. Anticipating that long before then, governments will stop providing the $5-$10,000 subsidies necessary to sell cars with $15-$20,00 packs, they conclude only a "battery breakthrough" or a quintupling of oil prices will motivate consumers to buy plug-ins.

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SHORTCOMINGS AND MISINTERPRETATIONS OF THEIR APPROACH: They limit expected price reductions to the low rate expected for already-high-volume and already-cheap laptop and mobile phone battery cells. They don't evaluate PHEVs with 10 or 20 mile ranges, which have much smaller batteries and very different economics than PHEV-40s and all-electric vehicles. They don't count the cost savings from an all-electric vehicle not including an internal combustion engine. And they don't factor in the likelihood of an eventual cost to emit carbon - already an assumption in much corporate long-range planning. Finally — and fundamentally — they don't follow standard research procedures used in similar studies to document their cost assumptions, look at cost sensitivities or conduct a bottoms-up cost model. Add in all these flaws and ignore the results and reports below, and we can see why they forecast EV and PHEV sales totaling a few million by 2020 — instead of the tens of millions that automakers already plan to build and expect drivers to buy.

CLOSELY-HELD INFORMATION: It's hard to get battery pack pricing data. Each battery manufacturer and automaker sees its costs as key to its competitiveness. With some batteries selling at dramatically high retail prices, manufacturer prefer to limit access to pricing forecasts for cells or packs in large volumes to potential automotive customers. And since automotive batteries are not yet mature products, price and performance continually evolve. With such competitive pressures and rapid-fire changes, researchers and even governments are often left with incomplete, inconsistent, out-of-date, or even erroneous price data.

LIMITED DISTRIBUTION EVEN OF PUBLIC INFORMATION: It's frustrating that many useful insights are trapped behind firewalls that some conference organizers short-sightedly enforce. They often limit distribution of presentations to those who paid to attend their conferences. (We've often suggested they experiment to see if they gain more attendees next time and achieve their broad goals more by unlocking their gates.) Fortunately we have been able to glean much from reports some authors choose to post online and from media reports.

MULTIPLE SOURCES FOR MORE REALITY-BASED DATA: Below, we've gathered information from primary sources — two automakers, and no battery manufacturers — and secondary sources including electric utility organizations, independent advocacy groups, and academic research cited or commissioned by government agencies. We cover the implications of the information we have gathered, then challenge industry players, including battery manufacturers, to release some of their proprietary pricing data. They will ultimately benefit through more support for plug-in vehicle incentives, building demand, and thereby expanding the marketplace for all players. We start with extracts from some reports that directly rebut the NRC:

AUTOMAKERS: GM TO AUTOBLOG GREEN: BATTERIES ALREADY CHEAPER THAN REPORTS'
FORECASTS: "There do appear to be some holes in the new [NRC] study. For example, the study cites a current cost of $1,000-1,200 per kWh for automotive lithium ion batteries. That figure may be as much double the actual cost if General Motors is to be believed. When we spoke with Denise Grey and Jon Lauckner from GM this week they both hinted that the Volt battery was actually in the $500-600/kWh range now and they expect this number to drop." http://green.autoblog.com/2010/01/08/study-battery-electric-vehicles-unlikely-to-be-cost-competitive/ . "Grey tells [AutoBlogGreen] GM is working closely with suppliers to cost optimize all of the pack's components and hopes to hit the US Advanced Battery Consortium target of $300/kWh by 2015." http://green.autoblog.com/2010/01/07/general-motors-builds-first-volt-battery-pack-on-production-line/ . (Note: these figures and those below refer to actual available energy — 8 kwh, not 16 kwh, in the case of the Volt.)

GM TO CNN: NRC'S BLOATED ESTIMATES: "GM spokesman Rob Peterson called the NRC's estimates of battery cost 'bloated,' saying the Volt's battery would cost much less than that. Battery costs will also come down quickly, he said. 'Our starting point, which already costs much less than they estimate, is just the first step,' he said." http://money.cnn.com/2009/12/15/autos/nrc_plug-in_hybrid_report/

AUTOMAKERS: NISSAN/RENAULT CEO CARLOS GHOSN BETS HEAVILY ON PLUG-INS: "Ghosn is so sure the vision will work that he's building factories to assemble 500,000 EVs a year — 10 times more units than General Motors Co. is planning to make of its Volt hybrid." And (talking about battery cell, not pack costs): "[Deutsche Bank AG analyst in New York Rod Lache] predicts that high-volume manufacturing will cut battery costs — now $650 per kilowatt-hour — in half by 2020. Ghosn says costs will fall faster. He's working on batteries with twice the range of Leaf's and has teamed up with Sumitomo Corp. to sell used batteries that can no longer withstand automotive requirements but can store power for utilities. [thereby effectively bringing down battery prices for the consumer]" From a long and comprehensive review by Bloomberg reporters John Lippert, Kae Inoue and Laurence Frost http://www.bloomberg.com/apps/news?pid=20601109&sid=aJEVrzt2t.8o&pos=11 . And as Nissan arranges for billions of dollars in financing to lease its batteries for EVs, it has worked with financiers whose due diligence looks at proprietary cost, reliability, and longevity data unavailable even to the NRC and BCG. The total Nissan-Renault investment is over $6 billion http://www.bloomberg.com/apps/news?pid=20601090&sid=a0vDcOKdXYoM .

ARGONNE NATIONAL LAB EXPLAINS HOW SCALE AFFECTS BATTERY COSTS: In what looks like the most detailed analysis to date, "Factors Determining the Manufacturing Costs of Lithium- Ion Batteries for PHEVs," Paul A. Nelson and Danilo J. Santini from Argonne National Laboratory and James Barnes, battery expert at the US Department of Energy, in May 2009 project the mass production costs to the vehicle manufacturer at $255/kwh for a PHEV-20 and $210/kwh for a PHEV 40 (table p.6). The authors go on the say, "The cost estimates in this study assume a stable rate of pack manufacture at a high rate of 100,000 packs/yrIf the plants were designed for [only] 10,000 battery packs per year, a reasonable production level for the first year for both a new battery pack design and a new vehicle, then the unit costs for the batteries would be approximately 60 to 80% higher. If, in addition, the plants were designed to be expanded for future production or the plant equipment was amortized over a shorter period to allow for the uncertainty of future orders (discontinuous production), the unit battery prices would be even higher. Thus, the low production rates anticipated for initial production of the batteries creates serious per-vehicle battery cost barriers that must be subsidized either by vehicle manufacturers or governments in order to achieve a viable long-term PHEV battery market." (p.9) The paper was delivered at EVS-24, May 2009 in Norway; it's found at http://www.cars21.com/files/papers/Nelson-Santini-Barnes-paper.pdf

(Along the same lines, but not from the Argonne studies: The NRC report indicated that Li-ion batteries are already in high volume production for laptop computers and cell phones, so their costs are unlikely to fall rapidly. It did not mention that, while laptop and cell phone cells have become commodities selling at fairly stable prices as low as $200/kWh, cells for plug-in vehicles are quite different and are still produced in low volumes at prices that are far above materials costs, with a lot of room to fall rapidly.)

MORE AS WE WENT TO PRESS: (as they used to say) As we were about to post this, we saw "Cost-Effective PHEV Range: Battery Costs Versus Charging Infrastructure Costs," a presentation to the Transportation Research Board's Annual Meeting, "Investing in Our Transportation Future — BOLD Ideas to Meet BIG Challenges," on January 12 by Argonne's D.J. Santini. This may be the first response we've seen from a government entity comparing the NRC study to Lab and other studies. (And it happens to have been presented to another branch of the NRC!) Slides include ones titled, "Battery Cost Estimates are Hard to Compare. Many Factors Influence Our $/kWh vs. NAS & Others" and "The Recent Incremental PHEV and E-REV Price Increases Estimated by Argonne CTR Staff Are Well Below those of the NAS." We encourage journalists to request the study from TRB or Argonne. (A PDF of last year's presentation by Santini is available for $25.) And we hope a version of this talk will soon be online at no charge from one or the other place.

THE NRC MAY NOT HAVE NOTED CARB'S CONCLUSIONS: The California Air Resource Board's Zero Emission Vehicles Review led to a White Paper in November 2009. From its detailed appendix, "Status of ZEV Technology Commercialization," http://www.arb.ca.gov/msprog/zevprog/2009zevreview/attachment_a_tsd.pdf , based on multiple studies, we highlight four key points:

Cites its commissioned study by TIAX that, with volume production, battery pack prices for PHEVs will reach $340-$400/kwh in the time period ending 2015 (p. 17).
Tesla Motors already buys laptop cells for $200 per kWh and in a costly and time-consuming procedure, carefully packages them for EVs. As they mechanize and expand this procedure, their EV packs will come in under $400/kwh. (pp. 17-18)
From ARB surveys: "Some automakers reported PHEV and BEV near-term, moderate volume costs would be on the order of $500-$600 /kWhr, with evolutionary changes and moderate volume production 'next generation' design changes necessary before costs move further down into the $400-500/ kWhr range." (p. 19)
Finally, the section concludes: "No automaker has stated that current design, or even next generation Li Ion batteries, will achieve sufficiently low cost to make them competitive with conventional vehicles without ongoing government incentives and/or tax credits. Several automakers do, however, believe that Li Ion battery systems will evolve sufficiently to allow automakers to sell cost competitive PHEVs and BEVs sometime prior to 2020" (p.25)

THE ELECTRIC UTILITY INDUSTRY VIEW: The Electric Power Research Institute has been centrally involved in plug-in vehicle development for more than a decade. With the Natural Resources Defense Council, EPRI produced the authoritative "Environmental Assessment of Plug-In Hybrid Electric Vehicles" in 2007. Now "Plug-In Hybrid Electric Vehicles: Promise, Issues and Prospects" is by Fritz R. Kalhammer (battery expert and longtime consultant to EPRI and government agencies), Haresh Kamath, Mark Duvall, Mark Alexander (Project Manager, Director of Electric Transportation, and Project Manager, respectively at EPRI), and Bryan Jungers (researcher at the UC Davis Institute of Transportation Studies). They concur with the Argonne Labs projection that $200-$400/kwh battery packs are feasible with technology now available. And they conclude, "investments in HEVs and PHEVs with mass-produced Li Ion batteries promise to pay back within the nominal 10-15 year lifetime of a vehicle, even at today's driving energy (fuel and electricity) prices and vehicle efficiencies.These conclusions hold without invoking longer- term economic incentives for PHEVs and/or penalties for excess CO2 emissions from conventional vehicles. However, such incentives and penalties will be instrumental in helping to offset the higher costs of batteries produced at lower rates during the introduction of PHEVs." That careful statement is on p. 6; the chart on p. 7 shows a PHEV-40 having an even-better near-term payback of 10.5 years and a few years out, 4 years. This EVS-24 paper can be found at http://steps.ucdavis.edu/People/bdjungers/Plug-In%20Hybrid%20Electric%20Vehicles%20-%20Promise,%20Issues,%20and%20Prospects.pdf . We hope to hear more from EPRI soon.

The Coming Nuclear Renaissance

If there were a company making a nuclear fuel that:

Instantly makes power plants operate 25% to 50% more efficiently, saving billions upon billions of dollars in operating costs, every year
Prevents any Chernobyl-like meltdowns from ever happening again and
Drastically slashes the radioactive life of spent uranium

You'd want to know about it, right?

The full report - including why the company behind it could triple in price - is available here.

ADVOCATES: The Electrification Coalition has taken the lead in pointing to flaws in the NRC study: find links at to its press release and fact sheet at http://www.electrificationcoalition.org/news.php . The Washington Post published EC CEO Robbie Diamond's response to its over-the-top editorial; his letter said in part, "the NRC seems to ignore these economies of scale. The NRC has done much important work over the years. In this case, however, its assumptions are badly out of line with industry and government estimates, and its conclusions — and unfortunately, those of the Post editorial that relied on them — suffer as well." Its reply at http://www.electrificationcoalition.org/news-response-to-nrc.php says, "The NRC study significantly overestimates current battery costs, placing them out of line with published research by DOE National Laboratories, exhaustive research by auto-industry analysts and current industry experience." It cites conclusions from its own comprehensive "Electrification Roadmap" that, "Based on current and expected industry costs, a PHEV-40 will be cost effective for consumers in 2015 — without any government subsidy whatsoever."

FILLING IN THE MISSING PIECES

WHERE DOES THIS LEAVE DOE, WHICH COMMISSIONED THE NRC STUDY? The Department of Energy has much data internally and from its national labs that conflicts with this report. But it has not reacted publicly even as the report's consequences circulate mostly unchallenged in the media and in Congress. Outside parties can help DOE validate its commitment to electrification and continue to sponsor research grants, loan guarantees, ARPA-E, and the US-China EV Initiative. With more data on the jobs and environmental impacts, DOE can catalyze volume purchases of both new vehicles and conversions of much of its existing military, civilian, and postal service fleet. These programs will in turn accelerate technology development and volume production — leading to further cost reductions for batteries and other components.

WAITING IN THE WINGS: We're hoping that battery manufacturers — the key primary source — will weigh in over the next few weeks, along with automakers other than GM and Nissan. In 2009, 14 U.S. companies formed the National Alliance for Advanced Transportation Batteries. They and many others are committing billions of dollars to this effort because they think they'll soon be selling their product in the millions of units. While citing their confidence that costs are declining, that batteries are lasting longer than ever, and that carmakers can draw down more than the 50% of the available energy used by GM's Volt, these companies have volunteered little data, though some have said privately that they are willing to respond if asked.

MOMENT OF OPPORTUNITY FOR THE BATTERY COMPANIES: These companies strenuously work to remain friends with everyone as they aggressively expand their businesses, gain customers, and compete on rapidly improving technology. Even understanding that, our fond hope zeroes in on the very first session of the Electric Drive Transportation Association Conference in Washington. It's aptly named, "Batteries for Electric Drive Vehicles: Manufacturing Challenges and Opportunities" http://www.electricdrive.org/index.php?ht=d/sp/i/13921/pid/13921 .

ON JANUARY 27, we urge the CEOs, founders and top executives from leading suppliers Johnson Controls-Saft Advanced Power Solutions A123 Systems, Ener1, Inc. Electrovaya, and Compact Power each to take five minutes to compare the NRC's outlook to the mid-term prospects for their batteries' performance and cost in mass production. We urge them as well to release their slide shows to the general public — not just to industry insider attendees at the conference. If they do, they'll help ensure the expansion of their entire industry. They'll earn the thanks of all those working to accelerate the electrification of transportation. And you'll hear about it from us!

**Felix Kramer is the founder of the California Cars Initiative - a Palo Alto-based nonprofit startup of entrepreneurs, engineers, environmentalists and consumers promoting 100+MPG plug-in hybrid electric vehicles (PHEVs). You can read more from Felix at www.calcars.org.

Sustainable Kauai

The following three-part series examines the opportunities and challenges Kauai may face in the new decade. Looking ahead to the next 10 years on the Garden Island, eight respected members of the community talk about tourism, transport, food, energy, climate change, conservation, and other matters that will shape life for everyone on Kauai.

KAUAI-Consider this: 10 years ago, nobody was talking about H1N1, Gitmo, or Twitter. At the dawn of 2000, there were no SARS, YouTube, toxic assets, or Department of Homeland Security. If you'd have mentioned the names Barack Obama or Sarah Palin, the response probably would have been "who?" George W. Bush was one of a dozen candidates campaigning for the GOP nomination, September 11 was like any other day, and Katrina was just a name.

When the calendar page turned from 1999 to 2000, no one on Kauai imagined the next decade would see the Kaloko Dam fail or that in 2010 Coco Palms would still be decaying beside the highway. Who anticipated the demise of Aloha Airlines, Gay & Robinson, or a proposed landfill in the middle of Kauai Coffee? A decade ago the "Super Ferry" just as well could have been a pixie with extraordinary powers.

In some ways, Y2K wasn't that long ago - in others it was another age completely. But just think, in 10 short years we'll be looking back at 2010 as a simpler, more carefree age.

Where will Kauai be in 2020? What are the problems we, as an island, face and what are some of the best ways to address these challenges today to create a better future for our children tomorrow?

Arguably the previous decade, with its numerous dramas and shocks of terrorism, climate change, peak oil, global pandemics, natural disasters, soaring costs, and economic collapse have driven home the point that the 63,000 of us and the million plus tourists we host each year are not insulated from forces beyond these shores.

It would only take one major cyber attack, one terrorist incident, or the rapid spread of a new disease and Kauai (the whole state really) would be, at least temporarily, left to fend for itself. Talk of when the boats (and planes) stop coming begs the question, "So what are we going to do about it?"

As an island, we import 90 percent or more of the food we consume and nearly all our energy. It's often pointed out that there is only enough food on Kauai to feed the island for 3-7 days at any given time. This sobering reality has played an important role in energizing re-localization efforts and the drive to make ourselves more self-reliant.

One of the biggest proponents of local food production on Kauai has been Glenn Hontz, director of Kauai Community College's Food & Agriculture Career Training Program. Hontz-along with college administrators, the Kauai County Farm Bureau, and local farmers-was instrumental in starting the newest Saturday morning farmer's market on the KCC campus. He works closely with groups like Malama Kauai, Nectar Gardens, and the Seed to Table Program to help spread practical knowledge of how to produce food successfully for home and commercial consumption. Yet Hontz is ambivalent about where Kauai is headed on its path to becoming a self-feeding island.

"My optimistic side tells me we are making great progress toward achieving food self-sufficiency via our rapidly developing network of home and community gardens and small commercial farms," Hontz says. "We have the land, climate and know-how to become self-sufficient. However, my pessimistic side tells me we may not achieve the necessary level of productivity in time to avert the full impact of the food crisis."

Hontz says in order for independent local food production to work, sufficient land restoration, an adequate labor force and the logistical and technical ability to spread the "how-to" information are all necessary.

"It takes training and on-going technical assistance to become successful at growing food. Sadly, too many of us want someone else to learn how," Hontz says. Still, he prefers to listen to his "optimistic voice" and continues pushing to advance the groundwork required for Kauai to feed itself by 2020.

Green economist Ken Stokes calls the job of becoming self-reliant a "monstrously creative challenge." He also expects that changing Kauai's food production model will create a lot of "great jobs" in the next decade.

According to Stokes, Kauai's future food model will need to be free of fossil fuels and include crops more resilient to a climate that scientists have documented is already becoming hotter, drier, and more prone to flooding. Farmers will have to find new, innovative ways to manage soil, water, and shade in response to climate change, Stokes says.

Stokes envisions Kauai's towns ringed by gardens and farms close enough to homes that people can walk or bike to work and food distribution can be done more locally. He points to an abundance of vacant land such as gullies that could be used to produce both food and energy for Kauai.

The question of how Kauai will fuel itself is one that Stokes and others spend a lot of time thinking about. And while many on Kauai changed their driving habits somewhat during the dramatic spike in world oil prices during the summer of 2008, most people have grown accustomed to paying more than three dollars a gallon at the pump and think nothing of driving halfway around the island to their favorite beach.

In the coming decade, it seems extraordinarily unlikely that fuel and energy costs will do anything but increase, very likely to levels never before imagined. Stokes is certainly not alone when he says, "We're running out of oil." But he also doesn't necessarily belong to the camp that worries about when the boats stop coming.

"People tend to focus on the fear factor," Stokes says. "My expectation is that by 2020 we will have stood that notion [of being cut off] on its head. Kauai has the capacity to produce far more renewable energy than we'll ever need." Stokes goes so far as to suggest Kauai could some day be exporting energy.

Stokes acknowledges the transition from an oil-based society will be "wrenching." Yet he also sees building new systems of energy production and retrofitting homes and offices as a coming wave of green jobs that will benefit Kauai's economy.

"Our future prosperity will be predicated on a whole new rack of industries. From a financial perspective, green jobs are the only place to put your money," Stokes says. "Instead of putting money into your 401K, put it into PV cells on your roof and five to ten years out you will have a better return on your investment."

Kauai also faces questions of storage. Not only where we "store" ourselves (housing), but where we put our waste.

Former mayor and council member JoAnn Yukimura sees the lack of affordable housing on Kauai and is concerned that given the current weak state of the real estate market, people may mistake more available rentals for an improvement in the situation. If the economy recovers markedly, she says, the lack of affordable housing will again be exacerbated.

"We should be building affordable housing now when construction costs are lower," Yukimura says. Unless we do so, Yukimura fears more residential properties will be swallowed up for vacation rentals and housing construction workers during future economic boom times, leaving many more people unable to afford a home. She says more affordable units like Paanau in Koloa are needed.

Homelessness on Kauai may increase in the next ten to twenty years as younger generations enter the workforce and start their own families. Yukimura worries about what will happen a decade from now when recently built affordable housing complexes like the Courtyards at Waipouli and others are released into the open market and no longer limited to affordable housing prices.

"Affordable housing needs to be insulated from the market and remain affordable in perpetuity," she says. "Hawaii is always in danger of becoming a home and playground for the rich where local people are priced out of the market."

If the economy experiences a robust recovery, Yukimura expects more foreign investment in resort and other developments on Kauai, particularly from China. At the same time, she acknowledges the world may be entering unprecedented times. If global economic contraction continues or accelerates, questions of construction booms and rampant tourism will likely become moot.

From housing and education to energy and food production, Yukimura says there needs to be a sense of urgency accompanied by real action in order to weather any coming storms.

However, she says, "I don't see that sense of urgency."

Yukimura, who is active with half a dozen groups, boards and advisory committees, also works with Zero Waste Kauai, a nonprofit group seeking to redirect how Kauai residents and businesses dispose of their solid waste.

An example of a Waste To Energy plant facility from the Energy Recovery Council.

"We have to change the mindset that waste is just waste and move toward seeing it as a resource," she says. Citing the rising cost of oil and its direct effect on manufacturing and shipping, Yukimura says that Kauai, as a community, needs to respond to the reality of peak oil. "Our system is so geared toward cheap oil and waste. We have to change that."

In explaining how waste can become a commodity, Yukimura refers to a program on Maui supported by the county that turns green waste and sewage sludge into quality soil conditioner (EKO Soil Conditioner). "It's called ‘import substitution' - substituting for things you import while helping recirculate money locally."

Yukimura sees a different approach toward waste as not only necessitated by physical and financial limitations, but also as having the potential to diversify and invigorate the economy, help safeguard the environment and improve Kauai's overall liveability.

Major changes in how Kauai views and handles waste, combined with improvements in energy and food self-reliance, the continued investment in supporting a strong cultural community and good land planning that preserves Kauai's beauty, could all contribute to a future tourism sector that is based on more sustainable, not "blockbuster" levels.

"Tourists will keep coming even if they have to come by ship. There may be ships with sails and photovoltaic cells, but people will find a way to visit," she says. "If we plan well and act with a sense of urgency, we can have a beautiful and sustainable place to live regardless of whether or not tourists come."

The key to a successful future, according to Yukimura, is self-reliance, sustainability, and economic diversification. That, and for people on Kauai to continue to help one another, especially during hard times.

"The generally caring, giving nature of people on Kauai will play a big role in facing these and future challenges," says Yukimura, who was mayor during the 1992 Hurricane Iniki. The same spirit of sharing and helping each other, she says, is still the predominant force of the people of Kauai today, is what most give her cause for optimism.

Looking ahead 10 years and beyond, Yukimura says that "if we make it over the hump, it's going to be because of this."

Part II of this three-part series will examine possible changes to Kauai's tourism-based economy, its energy supply and island transportation in the new decade.

**Jon Letman is a freelance writer in Hawaii. He writes about politics, society, culture and conservation on the island of Kauai. You can read the original article here

Cape Wind Project

Yesterday afternoon, the U.S. Interior Department announced that it will issue a final decision on the Cape Wind Project by the end of April.

As you know, this has been a very long and costly battle for both supporters and opponents of the project. Supporters claim that the project will boost Cape Cod's economy, have minimal impact on fishing (and may actually increase fish stocks), preserve the natural beauty of the Cape, and provide an average of 170 megawatts - which is nearly 75% of the average electricity demand for Cape Cod and the Islands of Martha's Vineyard and Nantucket.

But opponents of the offshore wind farm would ruin the natural landscape, end up being too costly for consumers and pose hazards to marine vessel navigation. As well, Native Americans in that region are now saying that the project will interfere with their age-old spiritual rituals and ancestral grounds.

Now I'm certainly not on the inside of either camp. But you simply cannot avoid the fact that there's an awful lot of well-funded political influence behind the opposition. Influence that certainly wouldn't exist if the views in that region weren't so spectacular and contributed to some extremely high property values.

Nonetheless, many analysts believe that if the Cape Wind Project doesn't happen, it could be a serious blow to future offshore wind development. But we don't buy that for a second. Mostly because you simply won't find the same kind of well-funded political influence in the offshore areas of New Jersey, Delaware and Maryland, where future offshore development is almost certain.

Jeff

North American Auto Show

On Monday, we took a look at a few of the electric cars that are turning heads at the 2010 North American Auto Show.

But here are a few more highlights that deserve some attention. . .

GM Vice Chairman Bob Lutz announced that GM will build a pure-electric vehicle by expanding the Volt's battery pack and removing the internal combustion engine.
Ford Motor Company announced it would invest $450 million to build its next-generation hybrid and a rechargeable plug-in hybrid in Michigan starting in 2012.
Toyota showed off its FT-CH hybrid electric concept, which is basically a smaller version of the Prius. No details on fuel economy, but I suspect it'll come in higher than the 50 mpg Prius.
The new Tesla Model S made its first auto-show debut.
The Ford Fusion Hybrid won Car of the Year and the Ford Transit Connect van won truck of the year.

To see a full list of all the new electric and plug-in hybrid electric vehicles that are coming to market, check out our report: The Electric Car Revolution Starts Now!

Jeff