Big Investments in Biodiesel

The Seattle Times is running an interesting article called Can Biodiesel Compete on Price about Imperium Renewables, a bio-diesel startup. What's interesting to me in the article, are the many references to big $ being invested in the alternative fuels market, both in the form of start up dollars, and big agri-business dollars. It seems gas prices are really starting to have a positive impact. Here's a snippet from the article:

What no one has demonstrated yet is whether biodiesel, as a business, can compete on the key factor for many consumers — price.

Imperium Renewables, a Seattle-based startup, has been obsessing over a business model it believes can beat regular diesel at the pump. The company says biodiesel can win at what it calls the "triple bottom line" of environmental, political and economic benefits.

The strategy relies on economies of scale. Imperium is building the nation's largest biodiesel refinery at the Port of Grays Harbor on the Washington coast, capable of supplying 100 million gallons a year — one-tenth of all the diesel burned in the state.

Al Gore's Movie: An Inconvenient Truth

Movie Review: We saw the new Al Gore movie last night. I admit, I am in a similar category to most folks I know - I believe global warming is happening, that it is bad, and that I can't really do too much about it. I highly recommend this movie, not only does Gore paint an undeniable reality, but it is truly shocking. And what is more shocking, is that society is not far more shocked given the looming disasters. I was really moved, and feel compelled to action, but have no idea what to do. Recycling and driving less just don't seem to cut it.

I'm also one of those people who assumed Gore was a wooden robot who inspired a bit too much to be president; I was, however, moved by Gore's passion and steadfast persistence on this issue despite becomed mocked as "Ozone Man" by our lovely leader of mass cranial prowess. Here's a classic quote from W on the campaign trail in 2000: "This guy is so far out in the environmental extreme, we'll be up to our neck in owls and outta work for every American."

The website referenced in the movie is: http://www.climatecrisis.net/.

FFVs and Lessons from Brazil

Politics: I ran across an interesting article titled Alternative Fuels - Lessons from Brazilia by Bill Siuru. In it, Siuru writes:

When oil prices dropped in the mid-1980s, coupled with the discovery of new offshore oil fields, gasoline became cheaper. This was further compounded by a drought and a poor sugar harvest disrupting the supply of alcohol. Then by 1989, sugar prices started to rise dramatically and producers exported sugar rather than turn it into fuel. By 1997, alcohol capable cars represented less than 1-percent of new vehicles sold in Brazil.

Brazil learned a lesson from these ups and downs. The result were flex-fuel vehicles (FFV) that could run on any fuel from pure gasoline to pure alcohol. All Brazilian gasoline is blended with at least 20- to 25-percent ethanol. Some 29,000 out of 31,000 fueling stations in Brazil also offer 100 percent ethanol for the older alcohol-only vehicles. Brazil currently has between 3-million and 4-million ethanol fueled vehicles.

Something that has negatively biased my view of ethanol in the US, was the claim that it was just a huge government subsidy with no real benefit - the prime argument as I recall, was that the energy to produce ethanol, was so great, that it just wasn't worth it in the end. Siuru sites some interesting numbers, that back this up:

Fermentation of Brazilian sugar cane produces much more ethanol as compared to corn. For each unit of energy expended to turn cane into ethanol, 8.3 times as much energy is created (1 to 8.3.) Compare that to corn which gets a maximum of 1.3 times the engery from a single unit (1 to 1.3.) Research is underway in Brazil to increase this to 1 to 10. Also, no fossil fuel is used in the process of converting sugar cane to ethanol. The residue from the stalks is used to generate the necessary electricity, and to fertilize the sugar cane fields.

So it sounds like corn is the culprit, not ethanol in general. This is an interesting read. I'm surprised Brazil isn't being sited more on models to follow, or atleast study more, given their relatively minimal use of gasoline.

Mullahs and Gas

Politics: Thomas Friedman was on NPR the other day; he made a statement to the effect that he's happy either way with what happens in Iran. If the mullahs bow to the west and drop their nuke quest, grand. If they continue to push the US, then Bush et. al. will have no choice but to push for strong sanctions and the Euros are more apt to listen. This will have the innevitable impact of shaking the oil markets further, pushing gas prices even higher.

In Friedman's view, and I tend to agree, the higher the price of gas, and the longer it stays high, the quicker this nation, and others, can get off oil. This outcome is beneficial, not only because of the benefits of reduced green house emissions, but also due to reduced dependence of the US on volatile oil supplies and price fluctuations. Reducing green house emmissions makes me and the penguins happy. Reducing US oil dependence makes conservatives happy because they believe this cash goes to fund terrorists, and it makes liberals happy because it reduces the hegemonistic instincts of US foreign policy.

In any event, one could easily plot the correlation of gas price spikes and the frequency in the news with which alternatives to oil are discussed. I, unlike the punditocracy, do not believe this situation is that difficult to resolve. I believe you need to do the following:

1. Develop efficient alternative fuel based solutions (i.e. bio-diesel, alchohol, etc.) One would think conservatives and liberals could agree on this - farm belts thrive with a massive new market. Liberals get reduced emissions, working open spaces (and hence less sprawl) and a happier planet.

2. Develop FFVs (Flexible Fuel Vehicles that run on gas or an alternative fuel). Again, this should be a political no brainer - gas is not eliminated over night, so if consumers can select gas or alchohol, they're happy to have the option to chase lower prices, or align their fuel and ethics.

3. Develop pluggable hybrids (hybrid FFVs that can be plugged into a socket at night). More supply diversification due to the variety of electricity options. A hybrid gets 60+MPG. With local only traffic, you could be getting 400+ MPG if you're fairly close to home and plugging in at night.

4. Keep pushing on the fuel cell front for the longer term horizon. Zero emissions should still be the goal.

and most importantly:

5. Keep the price of gas high

High gas prices keep everyone talking about gas alternatives; it encourages VCs to inject cash into start ups where the real innovation occurs, and vested interests can be toppled with disruptive technologies, or atleast forced to embrace them. High gas prices also encourages people to leave their giant SUVs and F350s.