In this thread I will try to stay on top of the happenings in green energy. This may cross the other news threads (CO2 & GW), but I hope to be able to touch on a wide spectrum of happenings in this industry as the U.S. looks to grow our involvement in green options. The key thing to watch here is the government involvement. If green energy is commercially viable, it should be able to stand on its own without an infusion of government (our) money. Corn ethanol is one example where government involvement is propping up the industry. Is the ethanol industry legitimate? I hope so, but corn ethanol might be dying.

A recent Wall Street Journal article discussed new-vehicle fuel standards in California, which will lower the carbon intensity in fuels starting in 2011. One of the provisions is being strongly opposed by the ethanol industry. This involves a calculation of the carbon intensity associated with the elimination of forested lands to grow corn for ethanol production. The stupidest argument I have heard yet involves the ethanol industry’s contention that this isn’t fair because the carbon intensity of oil is not factored up by the impact of “military action related to protecting oil supplies.”

This is rich! Liberals set up a straw man of going to war for oil. I'm sure you have heard that again and again. What oil have we seen for our military actions, by the way? They refuse to acknowledge the real reason, which more is more noble, that we are involved to save countries from brutal dictators and terrorists. Anyway, the straw man is set up so that they can keep knocking it down again and again.

The ethanol industry is hoping for more government involvement to increase demand. Many expect the Obama administration will increase the minimum blend rate for ethanol from 10% to as high as 15%. Don’t even ask what that will do to your car’s internals.

Another recent article from the WSJ explains a little about why ethanol – particularly from corn – has a tough row to hoe. As I speculated last time, they affirm that regular vehicles cannot take more than 10% ethanol without concerns of engine damage.

Low oil demand – due to the oil-price spike and the recession – were not factored into the legislated mandates driving ethanol production. Low oil prices also are a large negative for ethanol economics. The Congressional Budget Office reported last month that ethanol is only profitable when a gallon of gas costs 70% or more of the price of a bushel of corn. Nearby-month May corn closed at $3.77/bushel, so at this price, gasoline would need to be at least $2.64/gallon to make ethanol profitable. Keep in mind, however, if gasoline prices move higher, bushel corn prices will also move upward, so the target moves.

Another negative factor is that ethanol provides, at best, only 1.8 times the amount of energy used to make it. Ironically, this fact means that ethanol is economically unattractive even when gasoline prices are high because gasoline uses much less energy to make than ethanol.

A consultant points out something that can be said of all of the “green” energy initiatives. He says that (loosely quoted) “arguments for greater ethanol production in terms of creating “green” jobs miss a key point. Energy is an economic input: The fewer resources, including labor, going into its production, the better.

Looks like what began in California is moving to toward Washington. The EPA is expected to propose measuring the GHG emissions associated with biofuel production. Similar to what we have discussed in previous editorials, a study published last year found that U.S. production of corn-based ethanol increases emissions by 93% as compared with gasoline. Here’s a link to more on this story:

http://news.yahoo.com/s/usnews/20090514/ts_usnews/ethanolrulingatestforobamaadministration

At the same time, on May 5, the Wall Street Journal mentioned that the Obama administration plans to increase the availability of ethanol at filling stations and speed up subsidies to “struggling biofuel producers.” In light of what we outlined in the last post, does this sound like another bottomless government money pit to you?

The threat of CO2 has now been set aside if "climate change" is now the key instead of "global warming". Since we have been cooling since 2000, warming is no longer discussed. So, please, how does CO2 become apollutant contributing to climate change? If CO2 is not contributing to wqrming, why are we concerned about a cabon footprint? The whole story is really about how to raise taxes without calling it taxes.

A story in the 5/15 issue of the WSJ had an interesting take on garbage as a source of energy. Here is the link for this story:

http://online.wsj.com/article/SB124233937494621157.html

Garbage is something we will always have. What is the most environmentally friendly way to get rid of it? Currently, 13% of trash is burned, 54% is buried in landfills and 33% is recycled. The author suggests that if lawmakers endorse trash incineration as a “renewable” source of power, the “green” boost would help the industry.

I’m with the author, but I predict it won’t happen. Burning just doesn't seem "green" to most folks!

I read something interesting recently relative to ethanol. I guess some of the facts are not well reported because I had not heard this. In Dyersville, Iowa, one of the nation’s biggest ethanol facilities ever constructed closed its doors in April. It opened just last fall!

This is just one (big) illustration of the destruction left in the wake of government intrusion because “they know what’s best.” In 1994, the all-knowing EPA was very sure that ethanol was exactly what the world needed.

What resulted from this wrong-headed thought? The EPA inflicted mandates on ethanol usage resulting in corn diversion from food to ethanol production. As we have mentioned before, ethanol turned out to be much more costly to produce and was much more damaging to the environment than these “intellectuals” thought. The result is the closure of the ethanol plant, farmers who are economically troubled, hundreds more corporations bankrupt and the taxpayers are left holding the bill.

It’s interesting that all of this happened under the watch of Carol Browner at the EPA who is now the Assistant to the President for Energy and Climate Change. What havoc will be wreaked by Ms. Browner in this new role? If April’s CO2 announcement is any indication, more economic destruction will soon follow in her wake!

A recent column in the Pittsburgh Tribune-Review sounds a little like my upcoming June editorial. Glen Meakem, the founder, chairman and CEO of the former FreeMarkets Inc., discusses jobs claims for “clean energy” job creation. A local radio commercial indicates that 86,000 new jobs will be created in Pennsylvania under the new cap-and-trade plan before Congress.

Mr. Meakem challenges this bold estimate saying that $2 billion has been spent in Pa. on green energy with few jobs to show for it. Pennsylvania’s governor, Ed Rendell, admits that his first $1 billion “created” 3,500 jobs - $285,000 per job. The MIT study I reference in June’s editorial projects that 4 million jobs will be lost when the cap-and-trade plan is imposed. Based on Pa.’s track record, it would cost the federal government more than $1.1 trillion just to replace the 4 million jobs lost without adding a single net new job!

Now that’s a true government program!

The government and Consol Energy are investing in the development of carbon-capture technology. A futuristic coal-burning power plant in Illinois called FutureGen, this facility had been left for dead by the Bush administration due to projected cost overruns. Apparently, cost is less of an object now that the stimulus funds are available.

The facility will be primarily an experimental project to show the feasibility of carbon capture and sequestration. Ultimately, the facility may be sold to private entities for use as a commercial power plant.

I thought this treatment was pretty informative. Check it out by copying this link into your browser:
http://www.popsci.com/environment/article/2009-06/future-energy-realist-roadmap-2050

A new report indicates that geothermal energy continues to grow. It has slowed somewhat during the recession, but has not suffered as much as the wind-energy sector. Did you know that six countries account for 81% of the geothermal generation capacity in the world? Did you know that the U.S. is number 1?

More information is available at this link:
http://www.businesswire.com/portal/site/google/?ndmViewId=news_view&newsId=20090625005384&newsLang=en

As a result or in preparation for the Waxman-Markey bill, carbon capture experiments are under way. This article from Pittsburgh’s Tribune Review describes the technology and shows a specific West Virginia plant experimenting with the technology.

Copy this link into your browser to read more:

http://www.pittsburghlive.com/x/pittsburghtrib/business/s_638488.html

This link is to an older article that contains some interesting arguments about the benefit of the current solutions to CO2 reduction. Instead of cap and trade, thoughtful folks believe a direct tax would be better, and that money should then be invested in alternate-energy technologies. Here’s the article:

http://online.wsj.com/article/SB124519462073620871.html

While this might be a better long-term solution, the concern I have with it is the further infusion of government money into alternate energy. Unless new commercially viable technologies are developed as a result, the industry won’t be sustainable once the government money leaves. Look at what happened with corn ethanol!

It’s interesting. After writing my last post, I came across the following article that says much the same thing about government investment in alternate energies. There are some other good discussions as well. Check it out by copying and pasting into your browser.

http://online.wsj.com/article/SB10001424052970203609204574314312524495276.html

This writer – in contrast to Bjorn Lomborg from the previous post – is advocating FOR cap and trade as a better market approach. He uses acid rain as an example of how this type of legislation can work. Problem is, acid rain was another hoax that turned out to be some type of blight or fungus. Interesting that we never really heard any more about acid rain after that. It would be nice if global warming could be refuted by the actual and accurate science, but I’m afraid that GW falls under the category of “my mind is made up, don’t confuse me with the facts.”

Our choice of hated industries is always interesting to me. Currently, the wind-energy industry is favored, and big oil and power generators are always the whipping boys. Michael Fry of the American Bird Conservancy was recently quoted as saying, “Somebody has given the wind industry a get-out-of-jail-free card.”

This was in response to the fact that wind turbines kill tens of thousands of birds annually. Oil and utility companies have faced fines under the Migratory Bird Treaty Act for killing far fewer birds.

Anyone know why the difference in treatment?

I ran across a blog the other day that provided some interesting history of alternate energy. It poses some interesting questions as well. I doubt I can do it much justice in summary, so check it out for yourself by copying this link into your browser:

http://masterresource.org/?p=5180

A study by the International Energy Agency (IEA) says that an investment of $500 billion for each year over the next 20 years - $10 trillion in all – is needed to limit the rise in the Earth’s temperature. This is 37% higher than what the IEA estimated was needed just a year ago.

They are also saying that electric and hybrid vehicles would need to account for the majority of new-vehicle sales over the next 20 years. Here’s a link to the original WSJ article to copy paste into your browser:

http://online.wsj.com/article/SB125479738472566689.html

My November editorial will discuss the issues and concerns about the batteries used for the hybrids. Stay tuned!

Just digging through some older articles, and I ran across an interesting one written by Lamar Alexander, a senator and member of the Senate Environment and Public Works Committee. It’s worth a read:

http://online.wsj.com/article/SB10001424052970203440104574404762971139026.html

Some of the facts given are the Secretary of the Interior Ken Salazar’s plans to “cover 1,000 square miles of land in Nevada, Arizona, California, Colorado New Mexico and Utah with solar collectors ... He’s also talking about generating 20% of our electricity from wind. This would require building about 186,000 50-story wind turbines that would cover and area the size of West Virginia.” Alexander’s comment is, “I fear we are going to destroy the environment in the name of saving the environment.”

Great article in the WSJ about five “green” technologies that could change everything:

http://online.wsj.com/article/SB10001424052748703746604574461342682276898.html

You will need to copy and paste the URL above into your browser.

Here’s some information on China’s renewable-energy plans:

http://online.wsj.com/article/SB125409730711245037.html

Turns out that new coal-fired plants are going to be built as back-ups to the renewable-energy plants.

If anyone is interested in geothermal, a report was issued this summer that might be helpful. You can find more information at this link:

http://www.businesswire.com/portal/site/google/?ndmViewId=news_view&newsId=20090625005384&newsLang=en

Here’s more solar-thermal info:

http://djcoregon.com/news/2009/11/16/interest-in-solar-thermal-energy-picks-up-steam/