Fuels for the Future

[altfuels]

NY Times Says Solar "now cost-effective"

There's not much more to say about this article that isn't said, well, in the article itself. Fracking and fossil fuels are pitted against an ever viable solar alternative. The author suggests that we are very close to a point where solar energy will be more affordable than fossil fuels, it's just up to us to allow it to compete fairly in a market driven by political agendas.

[altfuels]

More from Solazyme

In today's article United Airlines announced their commitment to purchase 20 million gallons of the algae derived jet fuel from Solazyme. With recent news that the US Navy would be working with Solazyme, and now this agreement to begin offering commercial flights, we may be inching closer towards another contender in the alternative fuel arena. 

If algae derived fuel becomes viable (profitable, efficient and in demand) we may be on our way to seeing a shift in dependence on fossil fuels, though this still seems rather far off in the distance. The economic impact of this alternative fuel will depend on the public desire to have the opportunity to travel in a more eco-friendly manner. Solazyme's algae-derived fuel will have to offer financial savings as well as green improvements to be a serious substitution.

[altfuels]

The Technology Innovation Battle in Fuels

Technology is a big component in the fuels race.  According to CNET News, the technology innovation in fossil fuels may be outpacing that of alternative fuels.  A new process called “fracking” (which extracts natural gas from shale rock) has given life to resources previously unreachable, providing an additional supply of resources.  Similar processes can also be used to extract oil.  This technology also lends itself to address areas of extraction (e.g. tar sands in Canada, offshore locations) that were previously too costly to consider.

With falling fossil fuels prices and lack of formal legislation in the alternative fuels space, fuel companies are pausing to consider their options in the current economic climate.  Up front investment costs in alternative fuels are significant. The timeline for when alternative fuels will become mainstream (if at all) and profitable are unknown factors. 

The trend, it seems, is that technology is the common investment.  Whether looking to continue the trend of extracting fossil fuel resources or determining how to contribute to the alternative fuels movement, fuel companies are consistently investing in technology to help them.

[altfuels]

  NC State Gets $4 Million Grant to Ramp Up

Southeast Biofuel Production

This article is about the large win by NC State researchers to study to most efficient, cost effective, and environmentally friendly ways to produce biofuels from trees and forest harvesting residues. The university is part of the Southeast Partnership for Integrated Biomass Supply Systems, which is a collaboration between several industry partners and universities who work on all parts of the "biofuel pipeline", between the forests themselves and the refineries. This research is funded by a five year $15M grant from the USDA's National Institute for Food and Agriculture.

The research is focused on understanding the challenges of storing and transporting biomass and studying new developments in the production of biofuels. They are also focused on the possible economic and environmental impacts of the production of biofuels. Their goal is to asses the efficiency, scale-ability, and sustainability of the production of biofuels. 

Another goal of this research is to develop measures that communities, land owners, and business owners can use to asses the potential job growth and landowner income. They will also seek to provide support for the basic infrastructure of the biofuel industry. The researchers will look to provide information and training to both forest landowners and business owners as to the "how" and "why" of producing, harvesting, and transporting different varieties of biomass feedstock.

This grant was one of five, recently announced totaling more than $136M, aimed at developing regional, renewable energy markets, generating rural jobs and and reducing U.S. dependence on foreign oil.

[altfuels]

The US Navy and Algae

The US Navy is partnering with Solazyme to determine the feasibility of using algae based jet fuel in helicopters. 

I agree with the premise in the article that the US Navy, or the armed forces in general, is a great test bed for innovations in alternative energy. Given the scale of defense budgets, a primary obstacle of high initial investment can be overcome. Basically, it allows for companies like Solazyme where such alternative fuel research is carried and out and where the technology is honed for mass production to recoup the R&D costs that would certainly inhibit the mass adoption if these costs were passed on to general consumers.

Additionally, the demands placed in terms of reliability, scale, and efficiency for alternative fuels used in operations by the US Navy will automatically vet products for use by general consumers. The primary challenge for alternative energy is to be production ready by minimizing production and research costs. The technology can certainly get there the support of the US Navy and similar institutions.

[altfuels]

Auto tax breaks in a struggling economy

The article here discusses how it is becoming increasingly difficult to find tax breaks and other incentives when purchasing hybrid vehicles. 

It is certainly difficult to justify spending to support programs that encourage the purchase of hybrid vehicles in a an economy where most states are struggling to balance their budgets. However, perhaps the approach to take here is not a flat tax break for the purchase of these vehicles. 

If rebates/incentives were made available for cars that meet certain US manufacturing criteria, then the expenses might be more justifiable. This might increase manufacturing demand in the US and lead to some job creation that could offset the cost of the program. However, implementing at the state level will face issues because the cost is borne by one state, while the actual manufacturing growth might be elsewhere.

[altfuels]

Fossil Fuels exploration vs. Alternative Fuels?

As reported by NASDAQ, CEO John Watson of Chevron Corp. conjectures that the government should focus its policies toward offshore drilling and developing affordable fossil fuels versus giving precedence to alternative fuels development in the short-term.  Alternative fuels, he points out, should become "affordable substitutes" over time where the technology has more time to be researched and successfully produced for the consumer.

Ironically, the Chevron website (similar to other oil/gas companies) has a full section announcing their efforts to support development of renewable energy.  The site notes their significant investment in "geothermal, biofuel and solar technologies". 

Why the two perspectives?  Is Mr. Watson truly concerned that unreliable alternative fuels will be pushed to market too soon?  Or is the research of the Chevron organization behind in alternative fuels options and he wants to play to the company's strengths of producing fossil fuel based products?  Is he overly conservative (from a risk perspective) in his statements?  Or is he being practical?

Truthfully, the fossil fuel business is a cash cow.  Capital investments have been made, relationships have been built, and contracts have been negotiated.  Total costs would primarily be focused on operational costs to get the product out of the ground and into the truck.  Even with high crude oil prices and all time high gasoline prices, oil companies like Chevron continue to make a considerable profits.  Having the focus turn toward other alternatives could impact the demand for gasoline; those companies not ready with alternative fuels substitutes could see their demand for current products reduce.  Goodbye revenue!!

What about Chevron's website and their focus on renewable energy sources?  Upon closer inspection (based on a press release from Chevron on their recent use of solar power), they used this solar power to heat steamers that helped extract oil from old oil fields allowing fossil fuels to be retrieve more easily.  Fossil fuels drive social responsibility.

I will give Mr. Watson kudos for saying what other oil companies probably wish they could.  And I also give him the benefit of the doubt that he is looking out for his consumers concerns of costs of energy now (instead of later).  My hope is that there is a compromise somewhere in this innovative time, allowing us to afford what we have today while preparing for the future needs.

[altfuels]

Stop Getting Excited About Biofuels: They're Not Close To Ready

Recently there has been much talk about the potential for new sources of inputs to create biofuels. According to a recent article and study, this may be a lot farther away than we would have hoped.

The report by The National Academy of Science indicates that cellulosic biofuels, the types derived from non-food sources,  are unlikely to have an impact on the nation's energy security or environmental profile in this decade. The main reasons being that the technology is just not ready and investors remain wary to buy in.

The study, which looks at the progress towards the Renewable Fuels Standard (a mandate to produce 32 billion gallons of biofuel by 2022), found that cellulosic sources will not meet their targets in time. The mandate was created in 2007 and calls for 15 billion gallons of corn ethanol, 1 billion gallons of biodiesel, and 15 billion gallons of cellulosic fuels. The corn ethanol and biodiesel look like they will not have problems meeting these targets, while cellulosic fuels have a long way to go.

Based on the current technologies available to produce cellulosic fuels, the industry would not be ready to even produce 1 billion gallons per year until 2018. There are several reasons for this shortfall. First off, the process and infrastructure was nearly in place to produce corn ethanol when the mandate came down. While the technologies to produce cellulosic fuels are either too expensive or unproven, add to this high feedstock prices for cellulosic fuels and you have a recipe for disaster.

While the authors are skeptical about the current state of the cellulosic fuels industry, they are not advocating to "not do biofuels". They are merely stating that the process is going slower and costing more than what was originally estimated.

[altfuels]

Testing the waters

The article discusses the importance of companies with fleets in getting electric cars to the mass market. 

It highlights the growing trend of all-electric trucks not just cars. With the presence of current subsidies on electric car/truck purchases, fleet owners can consider introducing these vehicles in their fleet at the same cost as regular vehicles. 

Adoption by fleet owners is important because it allows for the sales from a certain amount of market penetration to be used to further R&D and reduce production costs for electric vehicles. Additionally, the initial limited usage is valuable in collecting test data and feedback to enhance the quality and viability of these vehicles.

[altfuels]

This small Spanish Island is planning to run completely on solar and wind power.

The island of El Hierro, part of the Canary Islands, is currently on track to be completely independent of fossil fuels according to a recent article.

With this ambitious project, the majority of the inhabitants power will be generated by five wind turbines. When the turbines produce excess energy they will pump water into an extinct volcano. When extra energy is needed that water can be used with a hydroelectric dam to meet the excess demand. Solar panels will also be utilized to capture the ample sunlight in the area, providing about one-fifth of the overall power.

If successful, other nearby islands and territories are looking to copy this technology. So far storing excess energy created from wind and solar in the form of stored water for hydroelectric purposes is one of the most promising.

[altfuels]

The Ethanol Tradeoff

The article discusses the threat to the US ethanol mandate from some proposed legislation. The legislation calls for reducing the ethanol mandate when the supply of corn is limited.

This would allow livestock feed to be more accessible and reduce the competition for ethanol between feed and fuel needs. 

However, this legislation does not address the fact the ethanol demand is not solely based on the mandate. Increasing oil prices and the need for the US to keep gas prices down means that ethanol demand for fuel will remain high. The trade off to this legislation is that consumers could end up paying a lot more for gas at the pump.

[altfuels]

[altfuels]

An interesting infographic that details alternative fuels in a quick and informative visual way. One of the most interesting aspects of this visual is the idea of wasted energy and the impact of efficient energy (R)evolution.

[altfuels]

In favorable economic times it is often difficult to enter an established market as a start up firm. In these more difficult economic times the roadblocks to success can almost be insurmountable. This is where Greenstart comes into play. Founded by three veteran entrepreneurs with connections in the startup and investment fields, Greenstart hopes to help four cleantech startups get their products off the ground. The model that Greenstart is using is a 3 month accelerator program extended to 4 firms (chosen out of 129 applicants) in order to help them bring their products closer to market. The tools extended to the startup firms by Greenstart include: introduction to potential investors, mentorship from successful entrepreneurs, offering prototyping space, assisting with grant writing and legal issues, and helping companies spot early adopters of their products or services. Also a monetary investment ranging from $25k - $100k. 

The four startups that were chosen by Greenstart are Lono, LLC, a company that makes a product called Smartershade, a "smart-glass" technology that allows users to adjust how much light is let through; Sylvatek, a manufacturer of a renewable diesel fuel derived from bio-mass; Tenrehte Technologies, which makes the PICOwatt wi-fi enabled, energy monitoring smart plug; and Wa.tt, a free energy monitoring tool that gathers and analyzes information from multiple energy accounts.

[altfuels]

Biofuels a reality in airline travel

Think biofuels is a future source of energy?  Think again.  The Dutch and the British are making it a reality.  Both KLM Royal Dutch Airlines and Thompson Airlines (UK) have airborne flights using variations of biofuel.  KLM plans to have 200 flights running on biokerosene by the end of Sept 2011 pending successful testing and compliance with fuel regulations. 

Where is the U.S. in this initiative?  What will it take for the US to follow?  My guess is that airlines in the U.S. will wait it out until others lead the innovative way, making the biofuels option more cost effective and profitable.  They will also wait for the U.S. government to spend millions of dollars on legislation to concur that using biofuels is a good idea. 

The U.S. airlines may not want to wait too long; the innovators could either be the new fuel supplier (because they hold the patent for the biofuel technology) or perhaps own the U.S. airlines outright by the time they figure out their direction.