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Saturday, May 23, 2009

Less carbon in the skies

Today there was an interesting op-ed in the WSJ on three approaches for lowering carbon emissions from commercial aviation, signed by the president of Boeing Commercial Airplanes.

Scott Carson started at the obvious takeoff point — better fuel efficiency:
There's plenty of incentive to develop more efficient airplanes. Historically, fuel has been the airlines' second-biggest operating expense next to labor. Last year, with oil reaching $140 a barrel, fuel costs even outstripped labor costs, rising to 40% of total airline operating expenses. So airlines have demanded increased efficiency from airplane and engine manufacturers. And manufacturers have responded big time. Over the past 50 years, the efficiency of commercial jets has risen an astounding 70%. This means that carbon emissions per mile flown have dropped 70% -- all without a regulatory requirement for greenhouse gas emissions.
That said, Boeing with GE (and others?) wants to encourage fuel efficiency standards for new airplanes — sort of like a CAFE in the skies.

Carson listed two other ideas for reducing carbon emissions. One is more efficient routing — a plan to shift from the 1950s-era traffic corridors to GPS-enabled point-to-point routing (NextGen). The idea of flying point to point is welcomed by all segments of the aviation industry, but the question is how to pay for the huge capital costs: private pilots welcome the idea of fuel/ticket taxes while airlines oppose it.

Surprisingly, Carson suggested that biofuels could also reduce carbon emissions:
Third, we have been testing various advanced, sustainable biofuels with the goal of finding renewable fuels for aviation that don't compete with food crops for land and water and that emit 50%-80% less carbon than petroleum. We have conducted test flights using mixtures of standard jet fuel and several different sustainable biofuels, among them fuels made from algae and camelina (a plant that produces seeds that aren't used for food).
However — as with other cleantech efforts — Carson requests government subsidies to get the new fuels off the ground.
One proposal is that government could provide loans to refiners to make biofuels competitive when the price of petroleum is low and get repaid when the price of petroleum is high. We hope government officials will seriously consider such ideas because biofuels, in our view, are the ultimate answer to aviation's carbon-emissions challenge.
Looking further out, ATAG (an industry trade association) has an interesting overview of near-term and long-term fuel alternatives that argues that hydrogen is the long-term solution.

As it turns out, this week I received (from a NASA historian) a copy of the NASA book Taming Liquid Hydrogen. The book is about how NASA’s Lewis Research Center and industry researchers learned in the 1950s and 1960s how to create safe and reliable hydrogen-fueled rockets, at a time when rival groups said it couldn’t be done.

Researchers at Lewis (now Glenn) co-authored a 2006 report evaluating all the aviation fuel alternatives. Ironically, they are more pessimistic about hydrogen as an aviation fuel:
Liquid hydrogen (LH2) not only presents very substantial airport infrastructure and airplane design issues, but because of the need for heavy fuel tanks, a short-range airplane would experience a 28 percent decrease in energy efficiency while on a 500-nautical-mile (nmi) mission. However, because airplanes need to carry much more fuel for a long range flight, and Liquid Hydrogen (LH2) fuel is quite lightweight the lighter takeoff weight of the airplane results in an energy efficiency loss of only 2 percent while on a 3,000-nm mission.
As they note, the key driver of hydrogen is that it’s not an energy source, but a way of converting ground-based electricity generation into a portable fuel. If there is (someday) enough electricity generating capacity that doesn’t produce carbon emissions — nuclear, hydro, solar, wind, tidal —then a use of hydrogen-based fuels is the one solution that would eliminate commercial aviation’s carbon footprint.

Wednesday, May 20, 2009

CAFE, NiMH, and EV

The administration’s proposed CAFE standards should be good news for the EV industry. The standards will naturally force Americans into smaller cars than they would otherwise buy, perhaps more in line with the rest of the world (where gasoline is more expensive and urban parking is more scarce).

If an SUV is twice the mass of an econobox, it’s pretty cheap to build a gas tank twice as big. (Yes, there’s more steel in the body and iron in the engine block, but…).

Thus far electric vehicles have been on the small side, in large part due to battery size and cost issues. Batteries have been the biggest cost for EVs (and HEVs and PHEVs) asw ell as the major technological limiting factor. So having buyers used to smaller cars makes it more feasible to sell small EVs — and to design smaller EVs with smaller batteries that are more cost competitive with efficient gasoline-powered cars. (My next car is more likely to be a $15k 35mpg econobox than a $40k Chevy Volt.)

On an unrelated note, Tuesday Daimler announced a 10% stake in Tesla Motors that Business Week guesstimates is worth $50 million. The investment from the world’s oldest (and once most prestigious) car company should go a long way to legitimate the San Carlos-based startup. The company has already pulled away from its startup competitors, but partnering with Daimler could help it overcome the liability of newness facing all startups.

Monday, May 18, 2009

Ethanol: what's not to hate?

Ed Wallace at Business Week lays out the case against the current lobbying efforts to increase the proportion of ethanol in American gasoline:
For the fourth time in our history the ethanol industry has come undone and is quickly failing nationally. Of course it's one thing when Detroit collapsed with the economy; after all, that is a truly free-market enterprise and the economy hasn't been good. But the fact that the ethanol industry is going bankrupt, when the only reason we use this additive is a massive government mandate, is outrageous at best.

Then again, the ethanol lobby and refiners have a solution to ethanol's failure in America: Hire retired General Wesley Clark as your point man and lobby the government to increase the amount of ethanol in our fuel to 15%. The problems with that proposition are real—unlike ethanol's benefits.
He lists four problems:
  • Ethanol creates more smog
  • Ethanol is a net energy loser
  • Ethanol reduces gasoline efficiency — E85 (85% ethanol) reduces efficiency by up to 40%.
  • Ethanol has pushed up fuel prices worldwide
But, as Wallace drily notes, “It gets better.”

As delivered, the E85 blend also cause damage to cars, even those designed to run E85. For example:
Lexus ordered a massive recall of certain 2006 to 2008 models, including the GS Series, IS and LS sedans. According to the recall notice, the problem is that "Ethanol fuels with low moisture content will corrode the internal surface of the fuel rails." In layman's terms, ethanol causes pinpoint leaks in the fuel system; when leaking fuel catches your engine on fire, that's an exciting way to have your insurance company buy your Lexus. Using ethanol will cost Toyota (TM) untold millions.
As he concludes:
The entire politically stated purpose of using ethanol had already been proven to be a false one before the program even got fully under way.

No surprise there. The premise that ethanol could give America the freedom to one day stop importing oil has always been fraudulent.

Sadly, when a truly bad idea is exposed today, Washington's answer is to double-down on the bet, mandate more of the same, and make the problem worse.

Thursday, May 14, 2009

What's old is new again

InfoWorld is raving about a new environmentally-conscious printer from Xerox. Most eco-friendly printers are about saving milliwatts in standby mode, or making the case of recycled plastic, but Xerox has tackled head on one of the key problems with today’s printers: disposable consumables.

The new printer, the ColorQube 9200, has no toner or ink cartridges. Instead, the printer melts solid ink sticks and applies them to the page. This keeps all those cartridges out of landfills, eliminates the materials used to produce the cartridges, and all the reverse logistics of getting the cartridges back for partial reuse. (Of course, control of consumables is a big issue for printer vendors who want to control the profits of their "razor and razor blade" business model.)

I’m guessing that this Xerox technology is based on its 1999 acquisition of the color printer division of Tektronix, which had at least one solid ink printer more than a decade ago. Since the bulk of the color market was inkjets and laser printers — dominated by HP and the Japanese — Tektronix had created high-end niches that offered unique products that commanded a premium price (hence the interest by Xerox).

The announcement gave me a sense of déjà vu, from working with solid ink printers 20 years ago. My company was helping a small New Hampshire firm break into the Macintosh color printer market by writing software for their printer, the Howtek PixelMaster. The advantages were a more vivid image, but a disadvantage was that the thick ink dramatically increased the weight of the page.

Even back then, solid ink printers seemed like they were a great innovation that weren’t quite competitive enough to overcome their disadvantages. Now that consumable use (and waste) is an increasing concern, let’s hope they can be successful in this new waste not, want not era.

Tuesday, May 12, 2009

Cleantech VC plunges

Ernst & Young announced that Q1 VC investments in cleantech have fallen dramatically. As the SF Chronicle reports
Compared with the first quarter of 2008, investments dropped 63 percent, to $277 million, and the number of deals was down nearly 50 percent, to 24, according to Ernst & Young.
Investments in electricity generation fell 73%. eSolar of Pasadena got $40 million of the $56 million of investments.

The drought in capital spending — and end to any near-term exit possibilities — is overwhelming any positive effect of the Obama administration’s support for clean technologies. As a WSJ blog concluded
So what’s the outlook? Just like more mature corners of the clean-energy industry—just like all industries, come to think of it–clean tech is hunkered down and waiting for Washington to prime the pump.

“While the timing of the receipt of government funding is uncertain, we expect that loan guarantees and other government financing structures, as well as corporate adoption rates of clean technologies, will be early indicators of an upward investment cycle,” said Joseph A. Muscat, Ernst & Young’s Americas Director of Cleantech.

Sunday, May 10, 2009

Fastest growing power source is...

In this morning’s SJ Mercury-News, the syndicated “Globalist Quiz” asks a question: “Which fuel is the world’s fastest growing source of energy?”

In the answers, available at the Merc (and the Orange County Register), the authors note that
Electricity accounts for 40 percent of the world's energy consumption, with demand predicted to grow by 3.2 percent annually from 2006 to 2015.
They then break down the relative contribution of four fuels to the global electricity supply, and their annual rate of growth:
  • Nuclear power: 15% share, usage up 1.3% annually from 2000-2006;
  • Hydro: 16%, up 2.5%;
  • Natural gas: 20%, up 2.4%; and
  • Coal: 40%, up 4.9%
The article notes that the high growth of coal is mainly due to its use in power production in developing countries, adding that “China is by far the world's largest coal producer, accounting for nearly half of the world's supply.” China also burns more coal than anyone else, too.

Coal is cheap — needing only basic technology, low up front capital costs, and relatively low fuel costs — all well suited for poorer countries that need to rapidly expand electric capacity to fuel economic growth. Of course, this measure of “cheap” does not account for the cost of the pollution (in the form of particulates and sulfur dioxide) or the greenhouse gases (such as CO2) — much of which is born by countries downwind of the coal users (or the entire world).

Developed countries have been working for the past 40 years to reduce the output of particulates and other pollutants. Before and since Kyoto (1997), they have also been working to reduce their output of greenhouse gases.

However, most developing countries are decades from taking similar measures. The decision of a sovereign nation to adopt such these policies is outside the control of business (and, in many countries, even the citizenry), but it obviously will have a major impact on the global output of anthropogenic CO2, as well as pollutants with more immediate health impacts.

Monday, May 4, 2009

Basic BTU budget

The libertarian Cato institute is certainly one of the most (if not the most) skeptical thinktanks when it comes to government intervention. Thus, it’s not surprising that a column Monday opposes the president’s proposal to spend $13 billion in Federal money to support high-speed rail.

Without the math, I can’t verify the calculations by its transportation expert, Randal O'Toole. But he makes two interesting points.

One is the familiar one about mass transit. Mass transit is highly capital intensive, and thus arguing it’s cost-effective requires making assumptions about the long-term use and payoff for the investment.

Of course, individuals, firms and governments make many long-term investments. Some of these investments are indispensable, but others will only pay off based on the most optimistic assumption (or not at all). If the profitability is dependent on assumptions, then under some scenarios the investment is economically unsound.

The other point O’Toole makes is that recently the energy efficiency of trains is improving far more slowly than that for planes and automobiles:
According to the Department of Energy, the average Amtrak train uses about 2,700 British thermal units (BTUs) of energy per passenger mile. This is a little better than cars (about 3,400 BTUs per passenger mile) or airplanes (about 3,300 BTUs per passenger mile). But auto and airline fuel efficiencies are improving by 2 percent to 3 percent per year (for example, a Toyota Prius uses less than 1,700 BTUs per passenger mile).

By contrast, Amtrak's fuel efficiency has increased by just one-tenth of 1 percent per year in the past 10 years.
This is not Moore’s Law: there’s no guarantee that the trend will continue indefinitely, and in fact a lot of the improvements in airline fuel efficiency seem like one-time hits driven by high fuel prices. Again, I haven’t done the math, but I sure hope someone is.

Still, taken together, O’Toole raises a crucial point. Planes and trains remain in service for decades, and thus it takes a long time to phase in any improvements in efficiency. If light vehicles have an average age of 7-9 years, then between near-term improvements and rapid replacement cycles, the best energy policy might be to subsidize individuals purchasing hybrids rather than governments building rail transit.

(Full disclosure. I am a huge mass transit buff: I take the T, the Washington Metro, Caltrain, BART, VTA, Metrolink and the Coaster every chance I get. My biggest success as an aspiring photojournalist came from the 1981 inauguration of the San Diego Trolley. That doesn’t mean that I’d recommend inefficient use of other people’s money to humor those biases.)

Friday, May 1, 2009

The bottom line for Captain Trade

The economic commentator with the biggest soapbox, Nobel prize winner Paul Krugman, devoted his NY Times column Thursday to the economics of cap-and-trade as a way of reducing CO2 emissions.

Krugman is a firm believer of aggressive government intervention to reverse global warming. At the same time, he writes
Yes, limiting emissions would have its costs. As a card-carrying economist, I cringe when “green economy” enthusiasts insist that protecting the environment would be all gain, no pain.
The Krugman column is a Rorschach test — people read into it what they want into it. On the left, political bloggers like Daily Kos praise Krugman for supporting cap-and-trade. (A few on the left, like the commenters at Washington Monthly, think that Krugman is a free market kook).

On the right, EconLog (by an economist and part-time Krugman fan) praises Krugman for his admission of the costs, but not for his vilification of cap-and-trade opponents. (More critical is Roger Pielke of the U. Colorado).

It is hard to make policy without considering both the pros and cons of a given policy proposal. Right now, we don’t know what the actual costs and benefits of cap-and-trade will be, and there’s really no way of knowing until we try it.

So it’s great that Krugman has given both sides, even if the partisans are only selectively quoting what they want to hear.