Friday, May 30, 2008

Turning Trash (and travel) Into Energy

The City of Los Angeles wants to one-up the entrepreneurial cities and companies that are turning used restaurant grease into biofuels. L.A. is looking into technology that will convert garbage into energy.

Just a few years ago, this would have sounded like something straight out of "The Jetsons," but L.A. City Councilman Greig Smith swears it can be done and, to prove it he's taking a long, expensive, taxpayer-funded vacation to Europe to "observe" trash-to-energy technology.

David Zanhiser reports in the Los Angeles Times that the boondoggle will cost a cool quarter of a million bucks.

While the return on investment is probably acceptable if the stuff actually works and City develops a cheap, new energy source in the future, the problem is that the City is broke right now. Really broke.

The L.A. Bureau of Sanitation reports that the trip will be financed by trash fees collected at a local landfill. What they conveniently leave out is that the L.A. just hiked trash fees on residents by a whopping 30%.

That sound you hear is former Assembly Speaker Fabian Nunez exhaling in relief that there is now an elected official more brazen than he.

Thursday, May 29, 2008

When CEO's Attack!

Yesterday we noted that CEO's hate annual shareholder meetings and that Chevron's yesterday was going to get nasty. Typically, an $18.7 billion annual profit would take some of the sting out of having to face stockholders, but money took a back seat to human rights and the environment.

Most executives, when confronted with shareholder activists would simply bite their tongue and offer a convoluted defense of the company's policies, ensure the audience that progress is being made, and vow to continue working on the problems. After all, in just a few hours the meeting will end and this ordeal won't be repeated for another year.

Chevron boss David O'Reilly clearly is not "most executives."

When one man from Nigeria accused Chevron of being culpable in the 1998 shooting of protestors opposing an offshore oil rig, O'Reilly basically (although he didn't use this word) called him a terrorist, noting that the protestors had seized the platform and held Chevron employees hostage!

When a hairdresser from Ecuador called out O'Reilly for contaminated drinking water associated with an oil field developed in the 1950's by Texaco (which was ultimately acquired by Chevron), O'Reilly didn't give a inch. He dismissed the complaint by pointing out that the oil field in question has been run by the Ecuadorean state oil company, Petroecuador, for 16 years and that any current water problems are the fault of the Ecuadorean government.

David Baker has the full write-up in the San Francisco Chronicle and is well worth the read!

Chevron CEO slams critics at meeting [San Francisco Chronicle]

Wednesday, May 28, 2008

Chevron Gets a Break on Gas Price Criticism-- sort of.

A wise (cynical) person once said that the only thing CEO's hate more than shareholder dividends are annual meetings. Chevron's annual meeting is today and it promises to be a donnybrook.

The most contentious issues are not price gouging or the high price of gasoline in general, but environmental and human rights abuses.

KRON has the video of the protestors who lined up outside Chevron's San Ramon headquarters at the crack of dawn this morning.

Tuesday, May 27, 2008

Geothermal Projects Heating Up In Oregon

Hydroelectric power has long been the renewable energy of choice in Oregon, but geothermal projects are starting to pop up in our neighbor to the north.

According to the San Jose Mercury News:

"Davenport Power is doing exploratory drilling at the Newberry Crater outside of Bend and has a contract with California's Pacific Gas & Electric to sell 60 and 120 megawatts of geothermal power from the proposed project. The first phase of the project is scheduled to begin operating in late 2009.

In eastern Oregon, U.S. Geothermal, based in Boise, Idaho, has begun drilling at the Neal Hot Springs project, where it may go as deep as 3,500 feet into the ground looking for a geothermal reservoir.

And in southern Oregon, geothermal power is positively bubbling.
Raser Technologies, based in Utah, has plans to construct a geothermal plant in Klamath Falls and has more land in the area leased for potential geothermal development."

The geothermal rush is being driven by Oregon's RPS, tax breaks and new technology.

Friday, May 23, 2008

Hot About Gas Prices

Gas officially passed the $4 mark in California yesterday and the Memorial Day holiday weekend has given the statewide chorus of aggrieved motorists a platform from which to shout about it.

But lost in the outrage is a forthcoming "Mother Nature Tax" on gas that experts predict will be good for an eight cent per gallon spike in prices. It all has to do with rising temperatures and "hot gas".

Elizabeth Douglass breaks down the hot gas phenomenon in the Los Angeles Times today. The net-net is this: when temperatures rise, the gas you pump into your car gets warmer. Gasoline expands when it gets warmer, netting you less energy per gallon.

According to the Times:

"The science behind the hot-fuel controversy isn't in dispute. The U.S. government defines a gallon of gas this way: At 60 degrees, a gallon is 231 cubic inches. But when fuel is warmer than 60 degrees, the liquid expands, yielding less energy per gallon. When it's colder, the fuel contracts. Gasoline expands or contracts 1% for every 15-degree change in the fuel's temperature. Diesel volumes change 0.6% per 15-degree change."

It would seem logical that the way to combat this problem is to put temperature controls on gas pumps, but that would eliminate the seasonal prfit surge gas stations enjoy so, guess what? No temperature controls on gas pumps.

Douglass notes:

"There is nothing illegal about the practice. It's been allowed for decades by measurement regulators who assumed that retail fuel temperatures stayed close to the government standard most of the time, and that any losses from hot fuel in the summertime would be offset by gains in the winter."

Thursday, May 22, 2008

Calpine in play?

Business Week reports that NRG Energy is making an $11.3 billion bid for Calpine ($22.83/share). No word yet on how receptive the Calpine board is to the offer, but analysts and investors seem to like it- Calpine is up more than 6% to $23.96.

One analyst noted that the entire wholesale power industry is ripe for consolidation and noted that Reliant, in particular, could be an attractive takeover target.

No telling if it's just public relations posturing, but NRG has said it has no interest pursuing a hostile bid if the Calpine board rebuffs the offer.

Wednesday, May 21, 2008

Bio Fuels Creating Black Market

About a year ago, we posted about a Chevron project that was turning restaurant cooking oil and grease into biofuels. Now the AP reports that, not only is that not so innovative anymore, it has actually spurned a black market for restaurant grease!

According to the write-up:

"Grease is transformed into fuel through a chemical process called transesterification, which removes glycerine and adds methanol to the oil, leaving a thinner product that can power a diesel engine. Biodiesel can also be blended with petroleum diesel, and blends of the alternative fuel are now sold at 1,400 gas stations across the country."

According to the National Biodiesel Board, national biodiesel production in 2005 was 75 millions gallons--it is 500 million gallons today.

Thieves now swiping cooking oil used in biodiesel fuels [Associated Press via the San Francisco Chronicle]

Tuesday, May 20, 2008

Pacific Ethanol Making the Best of a Bad Situation

After bashing ethanol in general, we need to give credit where it's due, namely to Pacific Ethanol which beat analysts's expectations by $0.15 a share for the first quarter, on huge volume.

Wall Street was expecting a loss of $.09 per share and Pacific turned in an EPS of $0.06. According to the write-up in the Sacramento Bee:

"The company made it up on volume. Pacific Ethanol has been trying to achieve a significant marketing position throughout the West, and it seems to be working. Sales hit a record $161.5 million in the first quarter, up 63 percent from a year earlier and slightly better than expected by analysts."

Pacific was refreshingly candid in its filing, admitting to an "overall softening" of the ethanol industry, as it took a $38 million write-down on an investment in an ethanol plant in Colorado. But, while ethanol on the whole might be a boondoggle, that's not to say that owning a significant part of the market can't be profitable-- clearly it can.

But Pacific has had its share of problems, as the Bee notes:

"Pacific Ethanol has been hit with a slew of problems lately, notably cost overruns on its plant construction projects. The company was so squeezed for cash that it had to sell $40 million in preferred shares earlier so squeezed for cash that it had to sell $40 million in preferred shares earlier this year."

Monday, May 19, 2008

SoCalEd Moving Ahead With Transmission Project

SCE has started the regulatory process on the Devers-Palo Verde No. 2 Transmission project, by submitting an initial filing to FERC.

Devers-Palo Verde No. 2 is a 230 mile long 500 kv transmission line that will run from Palo Verde, Arizona to just outside Palm Springs.

According to Transmission & Distribution World:

"The proposed transmission project would provide significant regional economic benefits and allow neighboring states to access renewable energy sources, such as solar energy rich areas in California and Arizona. It would reduce energy congestion within a nationally designated, critical electricity corridor and help Western states satisfy their energy policy and environmental goals.

FERC has the authority to review and issue a permit for a transmission line project that has been denied by a state commission or other entity that has authority to approve facilities if the project is within a nationally designated critically congested electrical corridor. The Southwestern corridor between Arizona and Southern California has been deemed one of two nationally important, critically congested corridors in the country by the U.S. Department of Energy."

Friday, May 16, 2008

PG&E Wants To Upgrade the Grid

PG&E has a six year, $2.3 billion plan to upgrade its grid to prevent the blackouts which tend to plague PG&E customers more than other utilities. The PUC is expected to vote on the plan by year's end.

Upgrading the grid is a good thing, clearly, but $2.3 billion is a big number and PG&E plans to pass the cost on to ratepayers, which has some watchdog groups crying foul.

TURN notes that grid maintenance is already funded by ratepayers through their monthly bill so this amounts to something of a double dip. But PG&E counters that the proposed plan which the utility is calling the "Cornerstone Improvement Plan," goes way beyond the basic $2.8 billion annual maintenance currently performed.

Under the plan, monthly utility bills could jump $1.04 by 2014.

PG&E wants to upgrade electricity grid [San Francisco Chronicle]

Thursday, May 15, 2008

Costa Azul is Open For Business.

Sempra has officially completed construction of its $1 billion LNG facility north of Ensanada, Mexico and, according to the San Diego Union Tribune, will announce that it is up and running today.

Sempra has taken receipt of at least two test shipments, one on April 18, and one approximately 10 days later, and apparently everything went smoothly.

Costa Azul is the first major LNG facility on the westernd North American Coast, and is part of Sempra's larger LNG strategy that includes an additional facility in Louisiana, slated for completion later this year.

Sempra completes LNG terminal in Baja [San Diego Union Tribune]
[Photo credit: John Gibbins, San Diego Union Tribune]

Wednesday, May 14, 2008

Refiners Feeling the Pain.

"Oil Companies" has become a catch-all term for just about any corporate interest with an stake in the chain of custody that starts wtih drilling for oil and ends with pumping gas into a car. Thoroughly reviled, the slur "oil companies" is usually uttered with the kind of disgust ususally reserved by the media and others for words like "tax cuts" or "Cheney."

But the "oil companies" (at least the refiners, anyway) are starting to feel the sting of high cost of oil and gasoline, too. According to the New York times, gas prices have risen 39% in the last year, but the price of oil has doubled, so refining margins are way down-- like 60% down from a year ago.
The economics of the problem are fairly simple to grasp: the raw material refiners have to purchase-- oil-- has gotten really, really expensive, and the end product they sell-- gasoline-- has also gotten expensive, but not expensive enough to keep pace with the price of oil. And, to compound the problem, consumers are buying less gasoline because of other economic factors weighing on their spending habits.

According to the Times:

"Tesoro, Sunoco, and United Refining all posted losses in the first quarter. The hardest hit have been small refineries that tend to process the most expensive types of crude oil into gasoline. Sunoco, for example, lost $123 million in the first quarter, while Tesoro posted a $82 million loss for that period, in contrast to a profit of $116 million last year."

Valero, the largest independent refiner in the country, saw first quarter profit tumble 76%.

Tuesday, May 13, 2008

Breezy Projections.

David Baker writes in the San Francisco Chronicle about new federal support for wind energy. According to a new DOE report, wind power could supply up to 20% of the country's power needs by 2030.

The Chronicle write-up seems to indicate that the federal report totally glosses over the very real transmission issue, citing the estimate that a "transmission super highway" could be built at a cost of $.50 per electric bill (presumably that covers construction and not all of the regulatory and litigation costs that would ultimately dwarf the cost of construction).

There is also no mention of bird strikes which have been a real issue with wind turbines in the past.

Monday, May 12, 2008

CO2 Going Underground

The California Aggie reports that a test project in Kern County to store CO2 emissions from a gas-fired power plant underground, is proceeding.

Using a $65 million grant from the Department of Energy to the CEC, and a $25 million grant from the West Coast Regional Carbon Sequestration Partnership, as many as 1 million tons of CO2 will be injected into geologic formations 7,000 feet underground.

The big question seems to be, "Will the CO2 stay underground?" CO2 is not flammable but it is an asphyxiant so a large scale leak could become an issue.

The test plant will be 50MW and is being built by Clean Energy Systems of Rancho Cordova.

Excess carbon dioxide to be stored underground [California Aggie]

Friday, May 09, 2008

Not Just Another Whiskey Still...

The E-Fuel Corporation knows how much people hate going to the gas station for a fill-up these days, so the company has created a home, washing-machine-sized machine that makes ehtanol. Yup, make your own gas at home!

The company figures it will cost about $1/gallon to make and it takes a couple of days from start to finish.

According to Wired:

"The MicroFueler weighs about 200 pounds and hooks up to a water and 110 or 220 volt power supply and wastewater drain just like a washing machine. It uses raw sugar (not the refined white stuff) and a proprietary time-release yeast mixture as feedstock. You can also use left-over booze if you've got any lying around. Toss it all into the fermenting tank, turn on the machine and in seven days you've got 35 gallons of ethanol. The MicroFueler has its own pump and hose - just like the pump at your corner gas station - so you can easily fill up your car."

No word on the price tag on the machine, but the E-Fuel guys are calling it a paradigm shift and comparing it to the advent of the home PC (which probably means it's big, expensive, prone to breaking, and generation away from achieving its potential!).

Thursday, May 08, 2008

Exxon Mobil Has "F&%* You" Money

There is an old expression used to desscribe someone who has so much money that they can literally tell the world, [Screw] You! Exxon Mobil has that kind of cash.

Yesterday Chevron, BP, and other major oil companies entered into a $423 million MTBE groundwater contamination settlement, but Exxon took a pass. Good for Exxon.

I know the company is making a ton of cash while I and others suffer at the pump, but to hand that cash over to some blood-sucking trial lawyer would only add insult to injury.

At issue were 500 lawsuits in 19 states, alleging that "oil companies" (there's that catch-all term again) knew or "should have known" (that phrase is Holy Scripture to parasitic trial lawyers) that MTBE was a groundwater contaminant.

The MTBE manufacturers noted that they sold the chemical to companies that put it in their refined gasoline product and that gasoline, with or without MTBE has no place in groundwater so, as long as you're not contaminating groundwater with raw gasoline, you won't have any MTBE problems.

But that argument got lost amid the well-financed rush to ethanol and now MTBE is banned which many people take as a de facto declaration of guilt, so these crazy lawsuits remain viable.

Chevron, BP and others made the business decision to pay to make them go away, but Exxon is standing strong and will fight the case on facts. Way to go Exxon.

Wednesday, May 07, 2008

Lighting the Way

It's no secret that the big-money venture capital crowd is in love with solar power... and its obsession with biofuels is almost as pronounced. But you can you name the third largest alternative energy sector (by capital investment)? Lighting.

The San Jose Mercury News cites a CleanTech Group survey that claims $100 million in venture capital investments in lighting technologies in the first quarter of 2008 alone.

One investor quoted in the piece notes, "The way we light things today uses 25 percent of our energy in the United States."

As support for doing away with incandescent bulbs continues to gain momentum, CFL's have grown in popularity, but advances in LED's look like the future.

Tuesday, May 06, 2008

Winds of Change

The shortcomings of wind power are well-documented: turbines need to be placed in remote areas, far from the grid; wind farms are a blight on the landscape; and bird strikes are far too common. But this hasn't stopped Magenn Energy from-- literally-- floating the latest in wind energy technology: a blimp that functions as a tethered, airborn wind turbine.

The portability of the device would seem to address two of the major problems with wind energy. Because it can be taken down and raised fairly easily, it alleviates the need for a permanent structure that would raise community opposition, and it can be deployed as conditions permit in less remote areas.

But, one look at the comment thread on, and you can see this is going to have some issues. Within the first dozen posts, doubters quickly segued from musings about possible bird nestings to a detailed back and forth about how to shoot one of these balloons down! Apparently this could be a real issue and, as evivdence thereof, one poster even chimed in offering the apparently little reported phenomenon of shooting at grounded airliners being transported by rail through Kansas.

It's an out of the box solution, for sure, but only time will tell if has legs.

Monday, May 05, 2008

Looking to Cash In On Jet Fuel Prices

"Fuel surcharges" are only the latest in a long line of annoying add-ons embraced by airlines, but with the high cost of jet fuel, they do make some amount of sense. But, one person's problem is another's opportunity.

Washington, DC-based Solena Group, which builds and operates power plants in Asia, North America, and Europe, is buidling a plant in Gilroy, CA to make jet fuel out of trash, manure, and tree bark, using plasma gasification technology.

CO2 emissions are one big problem associated with the venture. Expiring biofuel tax credits are another. The fact that Solena is doing this on spec without any interest or commitment from a major airline is yet another.

Solena's white knight could be the US Navy which could potentially be inerterested in doing a deal.

Thursday, May 01, 2008

Raining on Gasoline Consumption

Just about every East Coast transplant likes to gripe about how Californians "can't drive in the rain." Well now David Hackett, president of energy consulting firm Stillwater Associates is taking that maxim one step further.

According to Hackett, it's not only that we can't drive in the rain, we DON'T drive in the rain.

The stats are in and California gas consumption was down 4.5% in January, which directly correlates to the amount of rain parts of the state received. A dubious theory? You make the call...