Oil companies & new political policies....
Today’s post: Weds, 5-28-2008
Just before sailing ships were replaced by powered ships, initially steam driven, the clipper ship was developed.
It was the best & most evolved design for sailing ships. But it soon disappeared from world commerce & became an antique.
Oil companies are becoming the clipper ships of today.
They are highly evolved to find, transport, refine, & sell oil for fuel & petrochemicals.
And, with shareholders to report to, record profits now, & rising demand, they are mostly deciding to try to respond to rising demand at time when supply is getting harder to obtain.
The executives would be fired by their shareholders if they didn’t.
However, the major oil companies are reported to be doing that ONLY. Some oil companies that have invested in alternative energy sources are even reported to be trying to sell them & leave the field of alternative energy sources.
The Rockefeller shareholders of Exxon Mobil are correct in my view that to decline to use a significant part of the very high profits & cash available to move into alternative sources of energy jeopardizes the future economic viability of the oil companies.
Meanwhile, driven by the rapidly escalating costs both in dollars & environmental impact, the rest of the world is switching to cost effective biofuels, renewable energy sources, & nuclear power plus plug-in hybrid & electric cars. And, more people will begin to telecommute.
It will take longer than is good for our economy both in the United States & worldwide to transition from fossil fuels to other sources. But, if we survive the problems that causes & make the transition successfully, which we still have a shot at doing, oil companies will still have petrochemicals for what oil remains. But they will become depleted relics of their current selves in size & profitability. The action is moving elsewhere. And, if oil companies don’t get into it with part of their money, they will become the clipper ships of our time. Unfortunately for them, that is the course they seem to be all following today.
One of the promising signs that we may make it is that the increasingly mandated use of renewable fuels & reductions in CO2 by governments is beginning to drive really large markets for virtually all the alternative energy sources.
Another is that if the major oil companies continue to decline to make this investment themselves, there are increasing signs they will be taxed in various ways by governments who will then invest in alternative sources separately from the oil companies.
As improved technology is adapted & the market responds, the governments will up the ante in all these areas & the process will accelerate.
Which oil companies will be large scale players on the world scene then?
Some who don’t want to be the clipper ships of today, will be; but based on today’s news, most of them will not.
The really unfortunate thing is that they have the money to do both.
They can maximize the oil they can deliver while it is still at a premium as best they can AND create a viable foothold in the alternative energy sources of tomorrow.
As someone who grew up in oil country & benefited from the prosperity the oil companies created there as a kid & as young man, I hope some of them smarten up in time.
But of most importance, I hope we make the transition in time to avoid really horrible economic problems without their help as it now looks likely we will need to do.
Wednesday, May 28, 2008
Wednesday, May 21, 2008
Energy policy of the Presidential candidates....
Today’s post: Weds, 5-21-2008
A recent newspaper article compared the energy policies proposed by the 3 remaining candidates for President of the United States.
1. Both Barack Obama and Hillary Clinton were listed as proposing a goal of reducing C02 emissions to 80 % below 1990 levels by 2050.
John McCain was listed as proposing a goal of reducing C02 emissions to 60 % below 1990 levels by 2050.
This one is a mixed review.
Environmentally, 80 % is the number we likely need to get to. Advantage to the Democrats for that.
But given that we emitted more in 2006 than in 1990 by a good bit & 2007 was 1.6% ABOVE 2007 in the United States, 60 % below 1990 may be more achievable. And, sometimes setting more achievable goals produces more results than goals that sound good that no one believes are reachable.
But the big news is that McCain HAS a CO2 reduction goal.
Over-all, I rate this category as even.
2. On Nuclear Energy as a solution, John McCain is strongly for it; Barack Obama is willing to use it but as a second priority AFTER adding renewable sources and energy efficiency get the most emphasis. Hillary Clinton has valid concerns about using nuclear energy but sounds like she simply would decline to use it if elected.
Obama & McCain sound like they would address the concerns but use some nuclear power.
Since in the early stages of renewable energy technology & deployment, it will have less capacity than nuclear power to reduce our dependence on oil as a national security issue & on both oil and coal for CO2 reduction, between Clinton & Obama, I rate this as a strong advantage to Obama.
Between Obama & McCain I think this comes out about even to slight advantage Obama. I totally agree with Obama that the first priority must be to dramatically increase our energy efficiency & to accelerate the development & deployment of renewable sources. So he gets the advantage on that part of it. But nuclear has the capacity to get fast progress in the early stages, so McCain’s stand on nuclear itself may be closer to what we really need.
All three support cap & trade arrangements with binding caps on CO2 emissions.
However, to get these to work, the oil companies need to invest some of their currently high profits AND their tax subsidies they currently get into diversifying into energy efficiently produced biofuels & electricity produced by renewable energy to be used by electric & plug-in hybrid vehicles.
Failing that, & mostly that has been the case, compared to what they clearly should be doing, it likely does make sense to gradually eliminate their tax breaks.
On the other hand, getting them to do the right thing instead of spending on lobbying to avoid it may depend on working with them rather than just pitting government power against their perceived interests.
The President that I think got the balance right between making real progress & avoiding excessive friction caused by ignoring the perceived interests of business was BILL Clinton. That’s why I am comfortable with Hillary as President if it were somehow to happen.
Obama shows signs of not understanding this issue enough to know how to manage it well while McCain comes across as too willing to continue the highly favored treatment of the oil companies that the Bush administration has had even if it compromises the development of renewable energy sources.
So I rate this category close to even now.
But my preference is for Obama to win & then bring on Bill Clinton as his advisor on this issue.
I don’t think we can afford to continue the policies of the Bush administration on energy.
The good news is that if McCain wins, things will be somewhat better instead of a total disaster.
The problem with that is for national security & to prevent frightening future environmental & economic problems from excessive fossil fuel use, somewhat better is NOT good enough.
It is closer than I expected early on; but I still think Obama is the most likely of the three to get the job done that we need to have done on energy policy.
(Based on his comments on renewable energy & energy policy in his book, I have been seriously disappointed in Obama’s failure to emphasize the importance of energy policy in his campaign & to explain to voters that getting it right will enable them to HAVE jobs & be able to afford to commute to them while not doing so at some point will have the reverse effect.
And, though it isn’t his strength, McCain’s energy positions are nowhere as weak as I expected them to be.)
Today’s post: Weds, 5-21-2008
A recent newspaper article compared the energy policies proposed by the 3 remaining candidates for President of the United States.
1. Both Barack Obama and Hillary Clinton were listed as proposing a goal of reducing C02 emissions to 80 % below 1990 levels by 2050.
John McCain was listed as proposing a goal of reducing C02 emissions to 60 % below 1990 levels by 2050.
This one is a mixed review.
Environmentally, 80 % is the number we likely need to get to. Advantage to the Democrats for that.
But given that we emitted more in 2006 than in 1990 by a good bit & 2007 was 1.6% ABOVE 2007 in the United States, 60 % below 1990 may be more achievable. And, sometimes setting more achievable goals produces more results than goals that sound good that no one believes are reachable.
But the big news is that McCain HAS a CO2 reduction goal.
Over-all, I rate this category as even.
2. On Nuclear Energy as a solution, John McCain is strongly for it; Barack Obama is willing to use it but as a second priority AFTER adding renewable sources and energy efficiency get the most emphasis. Hillary Clinton has valid concerns about using nuclear energy but sounds like she simply would decline to use it if elected.
Obama & McCain sound like they would address the concerns but use some nuclear power.
Since in the early stages of renewable energy technology & deployment, it will have less capacity than nuclear power to reduce our dependence on oil as a national security issue & on both oil and coal for CO2 reduction, between Clinton & Obama, I rate this as a strong advantage to Obama.
Between Obama & McCain I think this comes out about even to slight advantage Obama. I totally agree with Obama that the first priority must be to dramatically increase our energy efficiency & to accelerate the development & deployment of renewable sources. So he gets the advantage on that part of it. But nuclear has the capacity to get fast progress in the early stages, so McCain’s stand on nuclear itself may be closer to what we really need.
All three support cap & trade arrangements with binding caps on CO2 emissions.
However, to get these to work, the oil companies need to invest some of their currently high profits AND their tax subsidies they currently get into diversifying into energy efficiently produced biofuels & electricity produced by renewable energy to be used by electric & plug-in hybrid vehicles.
Failing that, & mostly that has been the case, compared to what they clearly should be doing, it likely does make sense to gradually eliminate their tax breaks.
On the other hand, getting them to do the right thing instead of spending on lobbying to avoid it may depend on working with them rather than just pitting government power against their perceived interests.
The President that I think got the balance right between making real progress & avoiding excessive friction caused by ignoring the perceived interests of business was BILL Clinton. That’s why I am comfortable with Hillary as President if it were somehow to happen.
Obama shows signs of not understanding this issue enough to know how to manage it well while McCain comes across as too willing to continue the highly favored treatment of the oil companies that the Bush administration has had even if it compromises the development of renewable energy sources.
So I rate this category close to even now.
But my preference is for Obama to win & then bring on Bill Clinton as his advisor on this issue.
I don’t think we can afford to continue the policies of the Bush administration on energy.
The good news is that if McCain wins, things will be somewhat better instead of a total disaster.
The problem with that is for national security & to prevent frightening future environmental & economic problems from excessive fossil fuel use, somewhat better is NOT good enough.
It is closer than I expected early on; but I still think Obama is the most likely of the three to get the job done that we need to have done on energy policy.
(Based on his comments on renewable energy & energy policy in his book, I have been seriously disappointed in Obama’s failure to emphasize the importance of energy policy in his campaign & to explain to voters that getting it right will enable them to HAVE jobs & be able to afford to commute to them while not doing so at some point will have the reverse effect.
And, though it isn’t his strength, McCain’s energy positions are nowhere as weak as I expected them to be.)
Wednesday, May 14, 2008
How can China use less Coal?....
Today’s post: Weds, 5-14-2008
There is a lot of good news about China.
Their ability to develop a huge manufacturing industry that so far has been able to manufacture goods & consumer goods at lower cost than in most developed countries has benefited the economies of the other countries in the world including the United States.
It has benefited many corporations in the United States & increased the value of their stock.
And, this has been one of the key causes of the relatively low inflation rate in the United States over the last 20 years.
In addition, they have done this with an enthusiastic can-do attitude aimed at progress much like the United States did as it became an economic power. As someone who lives in the Silicon Valley, I personally like their entrepreneurial style, their focus on progress on purpose, & their energy.
And, this cash coming into China has influenced China in the direction of becoming somewhat more peaceful & tolerant in its international relations. They now have a lot to lose if that cash were to stop arriving.
Unfortunately, they have increasingly relied on coal & new coal burning plants to power this manufacturing.
That has produced incredibly bad air pollution in China itself. Some of that air pollution is even making it across the Pacific to the United States. AND it has made China one of the biggest sources of CO2 on the planet. They are or shortly will be the country that generates the most CO2 each year in all the world.
That means that the people in China now have a lower quality of life and poorer health than they would if this energy could be produced without burning coal as they have been.
And, it means that we CANNOT solve CO2 driven global warming without China switching to cleaner energy sources that do not release CO2.
So, how can China use less coal? And, what can the United States & other developed countries do to make that happen better & faster?
Here are some thoughts.
1. It would DEFINITELY help if we dramatically reduced the coal WE burn for energy in the United States. China will be much more likely to do this also if we walk the talk. Further, the technology & practices we use to do this can be shared with China.
Similarly, it would help if we only allowed coal to be burned for energy if & ONLY IF absolutely all pollutants generated by burning the coal were removed from the air AND as fast as we learn how & get the equipment installed we sequester all of the CO2 generated.
If that was phased in over 10 years at existing coal burning facilities & no new coal burning plants were built, that would help solve global warming; it would gradually make coal generated electricity more expensive; & it would improve the competitiveness of nuclear, solar, & wind generated electricity which will help develop new technologies and increase our electricity generated from cleaner sources than coal.
2. Similarly, it would help if we did everything we could to pass on information to China on rolling out solar and wind power generation. This could range from licensing technology at discounted rates to export incentives to solar and wind power companies to export their products to China.
It helps that China is already developing its own solar companies.
3. Since China is already a member of the so called “nuclear club” in the world it also might make sense to work with them to build more nuclear plants to generate electricity in exchange for asking for commitments to high levels of safety, security, and safe disposal & storage.
4. Only after we do all three of these things do I think we should put any kind of diplomatic pressure on China to reduce the amount of coal they burn or place a tax or tariff on their manufactured products that are sent to this country to compensate for the costs of global warming if they don’t.
That may make good sense later if it is still necessary. But I think making a massive push to make these changes here & do everything we can to speed our own move away from coal and to help them in ways they will find useful and effective is much better.
This will do three things. It will give them some of the tools & some momentum in the right direction first. And, it will allow them to see our pressure at that point as coming from a friend rather than an enemy if we still need to exert it. And, of greatest importance, we will then be doing the right things ourselves instead of asking them to do so when we haven’t bothered to do them here.
5. A related thought occurs to me. With its lower cost of manufacturing, it might make sense to help China become a major manufacturer of LED light bulbs for home & small business lighting world wide. One of the barriers to rapid deployment of this energy saving technology is the high cost of such bulbs now. Why not help put China in a position to contribute world wide to solving this problem?
An important benefit of this would also be to help China use far less electricity for lighting itself -- which would also help them stop building new coal burning plants to generate electricity.
Today’s post: Weds, 5-14-2008
There is a lot of good news about China.
Their ability to develop a huge manufacturing industry that so far has been able to manufacture goods & consumer goods at lower cost than in most developed countries has benefited the economies of the other countries in the world including the United States.
It has benefited many corporations in the United States & increased the value of their stock.
And, this has been one of the key causes of the relatively low inflation rate in the United States over the last 20 years.
In addition, they have done this with an enthusiastic can-do attitude aimed at progress much like the United States did as it became an economic power. As someone who lives in the Silicon Valley, I personally like their entrepreneurial style, their focus on progress on purpose, & their energy.
And, this cash coming into China has influenced China in the direction of becoming somewhat more peaceful & tolerant in its international relations. They now have a lot to lose if that cash were to stop arriving.
Unfortunately, they have increasingly relied on coal & new coal burning plants to power this manufacturing.
That has produced incredibly bad air pollution in China itself. Some of that air pollution is even making it across the Pacific to the United States. AND it has made China one of the biggest sources of CO2 on the planet. They are or shortly will be the country that generates the most CO2 each year in all the world.
That means that the people in China now have a lower quality of life and poorer health than they would if this energy could be produced without burning coal as they have been.
And, it means that we CANNOT solve CO2 driven global warming without China switching to cleaner energy sources that do not release CO2.
So, how can China use less coal? And, what can the United States & other developed countries do to make that happen better & faster?
Here are some thoughts.
1. It would DEFINITELY help if we dramatically reduced the coal WE burn for energy in the United States. China will be much more likely to do this also if we walk the talk. Further, the technology & practices we use to do this can be shared with China.
Similarly, it would help if we only allowed coal to be burned for energy if & ONLY IF absolutely all pollutants generated by burning the coal were removed from the air AND as fast as we learn how & get the equipment installed we sequester all of the CO2 generated.
If that was phased in over 10 years at existing coal burning facilities & no new coal burning plants were built, that would help solve global warming; it would gradually make coal generated electricity more expensive; & it would improve the competitiveness of nuclear, solar, & wind generated electricity which will help develop new technologies and increase our electricity generated from cleaner sources than coal.
2. Similarly, it would help if we did everything we could to pass on information to China on rolling out solar and wind power generation. This could range from licensing technology at discounted rates to export incentives to solar and wind power companies to export their products to China.
It helps that China is already developing its own solar companies.
3. Since China is already a member of the so called “nuclear club” in the world it also might make sense to work with them to build more nuclear plants to generate electricity in exchange for asking for commitments to high levels of safety, security, and safe disposal & storage.
4. Only after we do all three of these things do I think we should put any kind of diplomatic pressure on China to reduce the amount of coal they burn or place a tax or tariff on their manufactured products that are sent to this country to compensate for the costs of global warming if they don’t.
That may make good sense later if it is still necessary. But I think making a massive push to make these changes here & do everything we can to speed our own move away from coal and to help them in ways they will find useful and effective is much better.
This will do three things. It will give them some of the tools & some momentum in the right direction first. And, it will allow them to see our pressure at that point as coming from a friend rather than an enemy if we still need to exert it. And, of greatest importance, we will then be doing the right things ourselves instead of asking them to do so when we haven’t bothered to do them here.
5. A related thought occurs to me. With its lower cost of manufacturing, it might make sense to help China become a major manufacturer of LED light bulbs for home & small business lighting world wide. One of the barriers to rapid deployment of this energy saving technology is the high cost of such bulbs now. Why not help put China in a position to contribute world wide to solving this problem?
An important benefit of this would also be to help China use far less electricity for lighting itself -- which would also help them stop building new coal burning plants to generate electricity.
Wednesday, May 7, 2008
Good news on LED lighting....
Today’s post: Weds, 5-7-2008
According to an article in today’s San Jose Mercury News in their business section, venture capitalists are beginning to put a LOT more money into funding LED light companies. In just the first 3 months of 2008, they invested $100 million. That compares to $13 million in 2005, 88 in 2006 & 91 in 2007.
One of the more interesting companies mentioned in the article today was Bridgelux Inc in Sunnyvale, CA.
They were listed as intending some of their LED lights to be used in homes – not just in traffic lights or backlighting on electronic devices, etc.
I phoned Brian Fisher, their media contact, who said that they do anticipate that some of their customers will make Bridgelux’s LED light products into light bulbs. It seems that companies like Bridgelux Inc do for lighting manufacturers what semiconductor companies like Intel do for PC makers. They make the components instead of the devices used by end users.
However, he said that a replacement using their LED’s for a 75 watt incandescent light bulb that generates 1100 lumens of light would use 10 watts.
Compact fluorescents generating that amount of light would use more like 18 to 20 watts & LED lights from other companies are reported to be in the 11 to 12 watt range for that much light.
Since Bridgelux Inc may also be able to make their LED products for less than other companies – according to their website -- it’s easy to see why they have raised over $70 million in venture capital including $40 million last month.
The other thing he said I did not know before is that LED lights are both more rugged in use than other lights & can do better in really cold places such as inside freezers or in facilities that are not heated in extremely cold climates.
(If you want to check out this company, their website is: http://www.bridgelux.com/ )
The article also listed four other LED lighting companies. Three others are in the Silicon Valley & one in Massachusetts has a Silicon Valley based venture capital investor.
The other encouraging news is that the article reports that WalMart is already making substantial use of LED lighting for its stores.
Since WalMart is profitable & has lower prices, they often pioneer effective cost saving methods. So, as this news gets out, other stores may well begin using LED lights as well.
And, it’s also clear that once LED light bulbs are widely sold & begin to come down in price, WalMart will sell the less expensive ones in large volume.
My take on all this is that LED light bulbs for the home are about where personal computers were just before the Apple II came out.
Some company will do it well enough that customers will buy; get extremely good & world wide publicity; & the explosion in LED light bulbs will then follow over the next 15 to 20 years after that.
My hope is that once LED light bulbs are widely available & that fit existing light sockets we will see gradually & then rapidly increasing carbon taxes on incandescent bulbs until they cost as much as the LED light bulbs which will gradually cost less over that same time period.
And, once that happens, I hope that compact fluorescent light bulbs that contain mercury are banned.
We will then have a market where a small amount of incandescent lights are still made & used for special situations, particularly those where the heat they generate is valuable. We will have no compact fluorescent light bulbs or we will have compact fluorescent light bulbs that contain no mercury in some applications. But 95 % of all light bulbs will be LED lights.
What I’d like to see soon is a company that already makes light bulbs for home use, develop LED bulb replacements for 60, 75, & 100 watt incandescent light bulbs that fit the sockets & lighting fixtures incandescent light bulbs have been used in until now along with a way for customers &/or utility companies to finance the people who buy them.
GE can do that & may do that at some point. But so far, such innovation has usually been done by venture backed startups. For example, Hewlett Packard passed on the idea of building a personal computer until Apple pioneered the idea & IBM and other companies jumped in.
That’s the company I’m waiting to see & hope to see within the next two or three years.
If any of the readers of this blog discover one, please let me know as a comment on this post on another post on this blog.
Today’s post: Weds, 5-7-2008
According to an article in today’s San Jose Mercury News in their business section, venture capitalists are beginning to put a LOT more money into funding LED light companies. In just the first 3 months of 2008, they invested $100 million. That compares to $13 million in 2005, 88 in 2006 & 91 in 2007.
One of the more interesting companies mentioned in the article today was Bridgelux Inc in Sunnyvale, CA.
They were listed as intending some of their LED lights to be used in homes – not just in traffic lights or backlighting on electronic devices, etc.
I phoned Brian Fisher, their media contact, who said that they do anticipate that some of their customers will make Bridgelux’s LED light products into light bulbs. It seems that companies like Bridgelux Inc do for lighting manufacturers what semiconductor companies like Intel do for PC makers. They make the components instead of the devices used by end users.
However, he said that a replacement using their LED’s for a 75 watt incandescent light bulb that generates 1100 lumens of light would use 10 watts.
Compact fluorescents generating that amount of light would use more like 18 to 20 watts & LED lights from other companies are reported to be in the 11 to 12 watt range for that much light.
Since Bridgelux Inc may also be able to make their LED products for less than other companies – according to their website -- it’s easy to see why they have raised over $70 million in venture capital including $40 million last month.
The other thing he said I did not know before is that LED lights are both more rugged in use than other lights & can do better in really cold places such as inside freezers or in facilities that are not heated in extremely cold climates.
(If you want to check out this company, their website is: http://www.bridgelux.com/ )
The article also listed four other LED lighting companies. Three others are in the Silicon Valley & one in Massachusetts has a Silicon Valley based venture capital investor.
The other encouraging news is that the article reports that WalMart is already making substantial use of LED lighting for its stores.
Since WalMart is profitable & has lower prices, they often pioneer effective cost saving methods. So, as this news gets out, other stores may well begin using LED lights as well.
And, it’s also clear that once LED light bulbs are widely sold & begin to come down in price, WalMart will sell the less expensive ones in large volume.
My take on all this is that LED light bulbs for the home are about where personal computers were just before the Apple II came out.
Some company will do it well enough that customers will buy; get extremely good & world wide publicity; & the explosion in LED light bulbs will then follow over the next 15 to 20 years after that.
My hope is that once LED light bulbs are widely available & that fit existing light sockets we will see gradually & then rapidly increasing carbon taxes on incandescent bulbs until they cost as much as the LED light bulbs which will gradually cost less over that same time period.
And, once that happens, I hope that compact fluorescent light bulbs that contain mercury are banned.
We will then have a market where a small amount of incandescent lights are still made & used for special situations, particularly those where the heat they generate is valuable. We will have no compact fluorescent light bulbs or we will have compact fluorescent light bulbs that contain no mercury in some applications. But 95 % of all light bulbs will be LED lights.
What I’d like to see soon is a company that already makes light bulbs for home use, develop LED bulb replacements for 60, 75, & 100 watt incandescent light bulbs that fit the sockets & lighting fixtures incandescent light bulbs have been used in until now along with a way for customers &/or utility companies to finance the people who buy them.
GE can do that & may do that at some point. But so far, such innovation has usually been done by venture backed startups. For example, Hewlett Packard passed on the idea of building a personal computer until Apple pioneered the idea & IBM and other companies jumped in.
That’s the company I’m waiting to see & hope to see within the next two or three years.
If any of the readers of this blog discover one, please let me know as a comment on this post on another post on this blog.
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