10 Truths About Big Oil

Bill Georgevich



The fossil fuel economy is literally a dinosaur that should have ended soon after World War II. For decades, Big Oil and Gas have enjoyed a massively successful global hegemony over this planet's energy. More than world domination in the marketplace, the Oil and Gas industry has succeeded in convincing mankind that fossil fuel is still the cheapest, most viable source of energy. This has simply not been true since the mid 1970's.

Here are some astonishing facts:

• The first hydrogen powered fuel cell battery was invented before the Civil War.
  
  
• Electric cars were the preferred method of transportation for the very rich in the U.S. until 1925.
  
  
• After making 1200 all-electric cars to comply with a California zero-emissions mandate, General Motors repossessed those cars from their owners and crushed them, even though movie stars offered the car maker millions of dollars not to.
  
  
• There can be no 'energy crisis' in a universe where the most plentiful element is hydrogen, the preferred fuel for NASA spacecraft.
  
  
• There is a enough sunlight in the U.S .Southwest to provide electricity for one half of the country.
  
  
• Gov. Arnold Schwarzenegger's hydrogen car initiative includes hydrogen fueling stations, whose hydrogen is made and provided by Shell Oil -- despite the fact that hydrogen can be made at home with ordinary tap water.
  
  
• The first hydrogen fuel cell passenger car is not the (unavailable) 2008 Chevy Equinox, but was a 1966 van that GM secretly and successfully tested.
  
  
• The Oil and Gas industry spends hundreds of millions of dollars a year in public relations efforts to convince the public and law makers they should remain unregulated, while at the same time encouraging consumer conservation so that less and less gasoline can be sold for more and more money.
  
  
• Major car makers the world over don't want you to own an electric or hydrogen fuel cell car as there is virtually no mechanical maintenance compared to an internal combustion engine, eliminating tremendous profits from the sale of parts and services.
  
  
• Every U.S. president for the last 100 years has been an "Oil President" as there has been no major government initiative to remove us from the fossil fuel economy -- unlike France, which has been 85% fossil fuel independent since 1985.
  
  

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Making Waves in California

Melanie Pahlmann reporting

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Last December, California's largest utility company PG&E committed to the development of an Offshore Wave Energy Power Plant on the shores of Humboldt County. The Canadian company Finavera Renewables has cut a deal with California to build an ocean wave energy plant 2.5 miles off the coast that will service PG&E's customers throughout northern and central California.

The plant is expected to offset greenhouse gas emissions by displacing an estimated 245 tons of carbon dioxide (CO2) annually. The plant is expected to begin delivering clean, renewable electricity to northern Californians in 2012 -- granted it passes an extensive regulatory analysis.

Before any construction is started on the project, this two to three year regulatory "permitting process" will be undertaken, involving several tiers of regulators and community stakeholders, and extensive, if not exhaustive, impact studies by a variety of organizations. This regulatory process is not only slow and painstaking, it is particularly difficult for non-existing energy technologies, which is to say, the clean technologies.

The regulatory process that any renewable energy company must face today was designed over half a century ago and thus does not allow for the multitudinous aspects of today's technologies. This slows an disrupts the approval time for clean energy power projects. "And so," says tidal power developer Trey Taylor, " already underworked, understaffed resource agencies like FERC [Federal Energy Regulatory Commission] would just as soon as have these new technologies go away."

Indeed, outdated regulations are what's holding the renewable energy industry back in the U.S., according to Roger Bedard of EPRI, an electric power research institute in Palo Alto.

Despite the hurdles and delays of the permit process, Finavera is obviously very excited about wave energy. From an entrepreneurial perspective, Finavera is quite clearly enthused about the short and long term potential of wave energy. "Propelled by the worldwide demand for renewable energy, ocean wave energy has the potential to become commercially viable quicker than other renewable technologies, achieving the fastest growth rate of all energy sources and generating significant wealth."

While I would never go as far as to agree that "greed is good", in the case of renewable energy technology, a balanced amount of profit motive is essential, at least until our government gets off its duff, stops subsidizing the fossil fuel industry and begins funding clean energy projects, as we all know it should. In lieu of that, venture capital funding will be the life blood of renewable energy research, development and implementation.

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Can Green Algae Help Save the World?

Melanie Pahlmann reporting

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Corn and sugar cane, move over. Several US companies are harvesting an algae that can be converted to oil and refined into biodiesel. Amazingly, the algae can grow in waste water, where it feeds on carbon dioxide. This means the algae offers a double benefit: it eats up excess CO2 while it matures into a non-polluting fuel source.

Algae may one day be the preferred feedstock for biofuels. Because it's not grown in soil and isn't edible, algae doesn't compete with food. One of the great biofuel scams going on right now is the use of corn, soy, and sugar to produce ethanol, which are being blamed in part for higher food prices and deforestation around the world. The AP just reported that:

Corn prices have shot up nearly 30 percent this year amid dwindling stockpiles and surging demand for the grain used to feed livestock and make alternative fuels including ethanol. Prices are poised to go even higher after the U.S. government this week predicted that American farmers -- the world's biggest corn producers -- will plant sharply less of the crop in 2008 compared to last year.

Algae has a high energy density and can produce 15 times more oil per hectare than other biofuel crops currently being harvested (rape, palm soya, and jatropha plants). The algae matures in 24 hours, converting 50 percent of their weight into usable fuel! Growing ponds can be built and operated on a massive commercial scale, creating the opportunity to produce a cost effective alternative to traditional oil supplies.

Where are we at with biofuel algae? The Florida-based company PetroAlgae plans to have an operational initial production facility this year and hopes to test a commercial system as early as next year. Fuels giant Royal Dutch Shell and HR Biopetroleum recently announced the creation of a joint venture called Cellana to make biodiesel from algae in Hawaii.

Here are a few companies currently pursuing algae as a fuel source:

PetroAlgae
Bionavitas
Live Fuels Inc.
Green Fuel Technologies
Solazyme

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Exxon Stops Drilling

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Bill Georgevich reporting

After posting the largest corporate profit in the recorded history of mankind, Exxon has decided to halt drilling and development of existing oil leases - despite Sarah Palin's campaign to the contrary. In a move to make the perfect storm for another oil crisis, this decision to use profits to buy back Exxon stock, rather than "Drill Baby Drill", proves that the world’s largest corporation is continuing to control the world’s economy to suit themselves.

Some folks may think that high oil and gas prices will hasten the renewable green economy. And to some extent that is true. But why not have both during this time of world recession?

Lower gas prices translate into a savings of about $200/month for the average American family of 4. That's essentially a $2400/year cash injection stimulus check!

Why not embrace the Obama and Gore green initiatives and require the oil companies to keep prices down by keeping supply up? The oil lobby begged Bush for more areas to drill in 2008 during the oil crisis they completely made up, and now they aren't drilling on the leases they already have?

This ranks along with AIG as one of the greatest scandals of the 21st century. We need low fuel prices to sustain a recovery and buy us the time to convert our energy economy to a renewable world.

General Motors Kills 2 Electric Cars

Bill Georgevich reporting

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Electric car killer General Motors, after showcasing their new electric car, the Chevy Volt, shut down the plant producing it in January 09, despite showcasing the hybrid with much fanfare at the Detroit Auto Show after receiving billions from taxpayers. The car company that sued California rather than produce a zero-emission vehicle now find itself in the cross-hairs of President Obama and just 60 days from bankruptcy.

We thought that flying to Washington in separate corporate jets asking for bailout money was the height of chutzpah and hubris. But this takes the cake: after finally receiving their federal billions, they shut down production of the only 100 mpg vehicle they had in development -- 4 days after showcasing the car with a flurry of press and ballyhoo at the January 09 Detroit Auto show.

Experts agree that the high cost of petrol in the summer of 08 caught the Big 3 by surprise when consumers were looking for gas sippers. Yet the next big closure GM announced in January was their Saturn plant, the one that makes small GM cars with mpg's of more than 30. Both The Volt and the Saturn plants closed because management deemed them "unprofitable". Tell that to Toyota, who makes the Prius Hybrid.

Out of the Red and Into the Green

Melanie Pahlmann reporting

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Last September, as our banks were failing, the always brilliant Thomas Friedman suggested that "we don't just need a bailout, we need a build up." Specifically, a build up of energy technology, taken on with the same brazen urgency as NASA's Apollo mission. President Obama seems to agree. His ambitious stimulus plan seeks to double our renewable energy output over the next few years. Friedman has been on the talk circuit for months now, recommending no less than "an overwhelming force" to green the economy: an energy tech revolution that will not only green our grids but grow our shriveled manufacturing base, which means new jobs.

In his Sept 28 2008 column, Friedman wrote:

[W]e don’t just need a bailout. We need a buildup. We need to get back to making stuff, based on real engineering not just financial engineering. We need to get back to a world where people are able to realize the American Dream — a house with a yard — because they have built something with their hands, not because they got a “liar loan” from an underregulated bank with no money down and nothing to pay for two years. The American Dream is an aspiration, not an entitlement….

Indeed, when this bailout is over, we need the next president — this one is wasted — to launch an E.T., energy technology, revolution with the same urgency as this bailout. Otherwise, all we will have done is bought ourselves a respite, but not a future. The exciting thing about the energy technology revolution is that it spans the whole economy — from green-collar construction jobs to high-tech solar panel designing jobs. It could lift so many boats.

In a green economy, we would rely less on credit from foreigners “and more on creativity from Americans,” argued Van Jones, president of Green for All, and author of the forthcoming “The Green Collar Economy.” “It’s time to stop borrowing and start building. America’s No. 1 resource is not oil or mortgages. Our No. 1 resource is our people. Let’s put people back to work — retrofitting and repowering America. ... You can’t base a national economy on credit cards. But you can base it on solar panels, wind turbines, smart biofuels and a massive program to weatherize every building and home in America.”

The Bush team says that if this bailout is done right, it should make the government money. Great. Let’s hope so, and let’s commit right now that any bailout profits will be invested in infrastructure — smart transmission grids or mass transit — for a green revolution. Let’s “green the bailout,” as Jones says, and help ensure that the American Dream doesn’t ever shrink back to just that — a dream.

Friedman is one of the freshest pragmatic visionaries to emerge from punditry in a long dry time. If I could whisper in the President's ear, I'd say three words: Friedman, Energy Czar. Check out his new book, Hot, Flat and Crowded: Why We Need a Green Revolution and How it Can Renew America.

Here he speaks with Fareed Zakaria:



On Feb 5 2009, President Obama made these remarks during a visit to the Department of Energy:

After decades of dragging our feet, this plan will finally spark the creation of a clean energy industry that will create hundreds of thousands of jobs over the next few years, manufacturing wind turbines and solar cells for example, and millions more after that. These jobs and these investments will double our capacity to generate renewable energy over the next few years.

We’ll fund a better, smarter electricity grid and train workers to build it – a grid that will help us ship wind and solar power from one end of this country to another. Think about it. The grid that powers the tools of modern life – computers, appliances, even blackberries - looks largely the same as it did half a century ago. Just these first steps toward modernizing the way we distribute electricity could reduce consumption by 2 to 4 percent.

We’ll also lead a revolution in energy efficiency, modernizing more than 75 percent of federal buildings and improving the efficiency of more than 2 million American homes. This will not only create jobs, it will cut the federal energy bill by a third and save taxpayers $2 billion each year and save Americans billions of dollars more on their utility bills.

In fact, as part of this effort, today I've signed a presidential memorandum requesting that the Department of Energy set new efficiency standards for common household appliances. This will save consumers money. This will spur innovation. And this will conserve tremendous amounts energy. We’ll save through these simple steps over the next thirty years the amount of energy produced over a two-year period by all the coal-fired power plants in America.

And through investments in our mass transit systems to boost capacity, in our roads to reduce congestion, and in technologies that will accelerate the development of innovations like plug-in hybrid vehicles, we’ll be making a significant down payment on a cleaner and more independent energy future.

Clean Coal Stays in Obama's Stimulus Package

Bill Georgevich reporting

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Obama talked about it along with John McCain in the presidential campaign. And despite environmentally-friendly cabinet members, clean coal got 3.4 billion dollars in the US 2009 stimulus bill under the line item - Fossil Energy and Carbon Capture. All that money despite the fact that there is no electricity made through clean coal technology and right now that technology doesn't even exist.

A lot of people don't realize that clean coal is a concept not a fact. The sequestration or hiding of carbon in abandoned oil wells is a great idea to relax folks worried about the single greatest producer of greenhouses gases in industrial countries. But the one zero-emission coal test facility operated by the DOE was abandoned after many years for lack of productivity after over 1 billion dollars were spent.

The clean coal concept is very important to the coal industry but it is also very important to countries like the US and China that have very high energy needs and lots of cheap coal. If you could set up a smoke screen that clean coal is coming, you could justify building more coal plants now and promise to retrofit them later when the technology for clean coal is invented and tested. This gives first world nations decades to continue to pollute, something climate change envrionmentalists say we don't have.

Some of this research money in the stimulus bill will go into coal gassification, a method of producing gasoline developed by the Nazis during World War II when they were converting coal into much needed gasoline for their war effort. Billions of gallons of gasoline could be produced from US coal reserves, a process seriously considered during the first oil crisis of the mid 1970's. There are still 2 remaining problems with that technology. It is an extremely inefficient way of making gasoline therefore it would make it very expensive and this technology is a terrible greenhouse gas polluter.

All this points away from coal and towards the refinement of all renewables. Why was the 3 billion+ placed in the new stimulus budget? Obviously the new administration doesn't think this country's energy policy can survive without coal.

Oil Prices Down, Gas Prices Up

Bill Georgevich reporting

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Last year on The Renewable Minute we asked, How can oil prices plummet after being so high? The answer: SPECULATION, and the speculators were fleeing the market. Now gas prices are creeping up, even as oil prices continue to fall. How? Oil refineries are reducing the supply to increase demand and pump up the price. Guess Exxon-Mobile doesn’t want a world recession to interfere with windfall profits for 2009.

And speaking of deja vu from late 2008: Have you noticed those Exxon ads are starting to show up everywhere as they did when gas was $4 a gallon? About 2 weeks before gas prices started creeping up again, Exxon was back in my Yahoo inbox, this time with a kinder, gentler message about renewable energy research, a politically more correct position in line with the Obama-Chu-Al Gore cultural creatives who currently rule the roost.

Our next program will be dedicated to the unveiling of the renewable energy provisions Obama's Stimulus Package. We’ll be visiting the new government website Recovery.gov, which promises total transparency, to look into a curious 3+ billion dollar line item for "fossil fuel renewable energy research." Join us next time to find out what that means.

Chinese Electrics Beat the U.S.

Bill Georgevich reporting

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With Chevrolet’s decision to power their hybrid electric car with batteries made in China, the globe’s greatest polluter may also become the world leader in zero-emission cars. At the 2009 Detroit car expo China shocked the auto industry presenting 3 different working models of electric cars that use the same battery as the Chevy Volt, which doesn’t arrive until 2010 or later.

We are not kidding. Not only does China have 3 working models that will be sold in the mainland this year, but their batteries really are going to be used by GM despite the fact that Detroit vowed that they were going to invent their own battery,

The story gets even stranger when you look at why China is building electrics. Not to save the environment and not to fight pollution although these cars will help with both. China simply has too much coal and imports most of it’s oil. So they can make a lot cheap electricity building more and more dirty coal-fired plants and feed their new middle class, hungry for transportation, by selling them electric cars.

Add that to the fact that the Chinese, as a culture, famous for their low standards of safety, will build those electrics to crash safety standards far below those established for the US. Which is why in the short term we will not see the Chinese electric cars in the US even though they will be available far ahead anything GM, Chrysler or Ford can actually put on a car lot for sale.

What's Really Behind That Changing Price of Gasoline?

Bill Georgevich reporting

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In October of 08 we reported that the Saudi’s believed the wild fluctuation in oil prices was based on commodity market speculators. This week, “60 Minutes” reports that the same investment bank that got billions in bailout money also used commodity trader techniques from Enron to hyper-inflate the price of oil last summer when supply was high and demand was actually diminishing.

And it gets worse. 60 Minutes’ Steve Kroft points the finger at Morgan Stanley, claiming that the same company that needed billions in US government bail-out funds also took advantage of deregulation pushed through the Bush Administration’s first term by lobbyists from Enron. Remember Enron, the largest contributor to the Bush 2000 campaign, the oil and gas company that created artificial rolling blackouts in California to successfully raise electricity rates? It’s the same corporation that created fake companies to boost its stock price. Well, according to the CBS news story, those loopholes for oil commodities trades still exist and those techniques used by Enron in California were used to buy and sell oil contracts for a company, Morgan Stanley, that is not in the oil business.

Connect the dots and you have a scenario in which one of the greatest contributors to the global financial meltdown also made the strongest contribution to the world recession by artificially boosting oil prices during a time of increased oil supply and lagging demand.

And what does the Bush administration do? Send them to jail like Ken Lay? No, they receive a $20 billion bailout from the US government.

Clean Coal: The New Weapon of Mass Delusion?

Bill Georgevich reporting

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You heard McCain talk about it, you heard Obama support it in the presidential campaign as well. The clean burning of coal by means of capturing and sequestering its carbon exhaust. Let’s be clear. There is no tested technology existing today to produce "clean coal". Scientists don’t even know if it will work. It’s just a concept brought to you by the coal industry.

Keep in mind that coal plants supply roughly one-half of all electricity in the US! And since it is a domestic source of energy, this dinosaur of energy production has been looking real attractive to our leaders.

The clean coal concept refers to an array of technologies that sharply reduce pollutant emissions from coal-burning power plants. In the 1980s and 1990s, efforts focused on reducing emissions of sulfur, nitrogen oxides and soot — which cause acid rain, damage forests and pollute watersheds.

The latest and larger concern about burning coal is the production of greenhouse gases, especially carbon dioxide. This has presented the coal industry with an engineering challenge it has not been able to pull off.

Traditional coal combustion emits far more carbon than other fossil fuels. Thus, maintaining coal as an option for power generation (electricity), will require dramatically reducing these emissions. A breakthrough is critical to the long-term energy needs of the US, which is considered the "Saudi Arabia of coal." Coal represents some 90 percent of the nation's recoverable fossil fuels, with reserves sufficient for 200 years, at current rates of use.

Clean coal depends on being able to ‘capture’ carbon dioxide emissions and then to safely dispose of them indefinitely underground, in a process known as sequestration, capabilities not expected to be commercially deployable until 2020.




There are two leading approaches to meeting the challenge. The first is an advanced steam cycle technology, known as ultrasupercritical (USC) cycles. The other is integrated gasification combined cycle (IGCC) technology.

USC promises significant efficiency gains, which could reduce carbon emissions by about a third. The US, long a leader in advanced coal combustion technology, has 170 supercritical units in operation.

IGCC, which is still a few years from commercial deployment, promises a potential quantum leap, approaching zero-emissions. Full-deployment, however, depends on overcoming another technological challenge — not just the ability to capture carbon but also to safely dispose of it indefinitely underground, in a process known as sequestration. This is not expected to be commercially deployable until 2020.

The choice of technology is hardly academic. In planning for new base-load (constant) power plants, utility companies must choose plants with carbon capture capabilities or face steep future costs under anticipated new laws establishing a cost to carbon.

There are just four commercial-sized coal-fired IGCC plants in operation. Two are in Europe and two in the US, one each in Florida and Indiana.

There have been significant capital and engineering investments made in IGGC technology in recent years by a small number of industry leaders, including Conoco Phillips, Shell and GE.

The federal government made a significant commitment to advancing this technology through its $2 billion FutureGen project, but support was withdrawn in January 2008 because of cost overruns and concerns the technology might quickly become obsolete. The next administration is expected to revive support.

Despite the compelling need, there are precious few IGCC projects still being pursued. Known plans include one by Duke Energy and a joint project undertaken by Hydrogen Energy and Edison Mission Energy, a subsidiary of Edison International.

Are there other potential solutions?

Anticipation of some form of carbon controls (most likely a market-based cap & trade system) has stimulated investment in other ways to capture carbon. Most are a variation on how other pollutants have been controlled.

For instance, liquids or solids (or static electricity) are injected into the plant’s flue gas exhaust to capture particles. Carbon is currently captured by exposing flue gas to an ammonium carbonate solution, which is then heated under pressure, reversing the absorption process so pure carbon is recovered. Georgia Tech University researchers recently reported using a solid adsorbent called "hyperbranched aminosilica" to capture seven-times more carbon. The substance can be recycled and reused.

Another capture method uses chilled ammonia, with which Alstom has demonstrated (in a lab) a capture rate of more than 90 percent and at a far less cost. The company is running a pilot project at Wisconsin Energy’s Pleasant Prairie Power Plant.

Technologically-based upstart companies — as well as infrastructure firms — offer investors limited entry into this sector, which is for the most part dominated by large firms.

Petrol Cheaper Than Ethanol?

Bill Georgevich reporting

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Yes, it’s true. The corn-sourced distilled ethanol that is mixed with gasoline is now more expensive than plain old gasoline. Gasoline blenders have always used more ethanol than required because it was cheaper than gasoline. Not any more. With today’s lower oil prices, ethanol will be blended with gasoline by decree from Congress for cleaner air, another finger pointed at a misguided national strategy for alternative fuel.

On a purely voluntary basis, gasoline blenders have always used more ethanol than the required minimum because increasingly high oil prices made ethanol an attractive fuel in its own right. This month with oil under $50/bbl and wholesale gasoline under $1/gal and ethanol at $1.60/gal it makes no economic sense to blend ethanol with gasoline. The national blending requirement will become binding for the first time in 2009. Gasoline blenders will have to use 11.1 billion gallons of ethanol because that is what the law tells them, not because it makes economic sense.

In our last program I shared what it cost the Saudis to extract 1 barrel of oil - $2/barrel or less 4 cents/gallon. Well, I stand corrected. The oil minister of Saudi Arabia was just interviewed by 60 Minutes' Leslie Stahl ,and he told her on Dec. 7 of 2008 that it cost LESS than $2/ gallon.

This means that with US current laws, gasoline will be more expensive because of the mandatory blending with ethanol than by itself! This would be inconceivable in the summer of 08 and I don't think Americans have really taken it all in yet. As we talked about on several programs, oil commodity speculators poured billions into futures contracts that artificially raised the price of oil for years finally resulting in the $4+/gallon fiasco of the summer of 2008. When money left the stock market it fled the commodity markets as well forcing oil and gas prices to get closer to their actual Fair Market Value.

The other fear that drove prices up artificially was the notion that the Saudis had somehow reached peak oil production. They have consistently heartily denied this and demonstrated to 60 minutes in Dec. 08 how they intend to actually double their output at least for the next decade.

Today drivers are relieved to get was is essentially a $200/month economic stimulus package but they're also outraged that the stories about India, China, and the rest of the "increased demand" for oil really was only increased demand by speculators!

We also promised on our last program some insight as to what this means for renewables. The magic number for renewables to be competitive is for oil to sell at $35/barrel. It hasn't got there yet so the question we will explore next time is what happens now that gasoline is cheaper and how best to take advantage of it for clean energy. In the meantime, all those who told us that the era of cheap oil is over will have to eat those words at least for now.

Are you driving 75% less? If not, then why is gasoline so cheap?

Bill Georgevich reporting

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We want to know why no one is investigating the relationship between oil prices and oil demand. Unless the world is using 75% less petroleum, it appears that the sky rocket in prices this summer was driven purely by speculation in the energy stock markets. If that’s so, what is the real cost of oil?

We know that it costs about $2/barrel or 4 cents a gallon to pump pure crude oil out of an existing oil well. There also are relatively small transportation and refining costs involved in turning that oil into consumer gasoline.

We know that in America a new oil refinery has not been built in 30 years. And we know that 30 years ago those refineries were producing gasoline that sold for less than 75 cents/gallon. Add to that the fact that in some countries like Iraq, Iran, and Venezuela, gasoline sells for less than 40 cents a gallon right now.

What does it all mean? Certainly this points to the fact that there is no relationship between “demand” and the market price of oil anymore than the value of a company is represented by it’s stock value. Companies can be over- or under-valued in the stock market….So too in commodity markets.

Without speculation inflation, oil would sell these days for between $10 and $20 per barrel with the retail cost of gasoline under a dollar per gallon. Keep in mind that oil sold for $45/barrel in early December 2008, even though OPEC had lowered production by 60 million barrels/month in a vain attempt to create a $50/barrel floor through which prices would not drop. Short term predictions point to even lower oil prices. What does this mean for the consumer and for renewable energy? Stay tuned, we’ll talk about low fossil fuel prices and its effect on renewables in our next program…

Should US Tax Payers Bailout the Electric Car Killer?

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While the US Treasury and Congress debate whether to save the Big 3 carmakers, environmentalists and renewable energy activists ponder whether General Motors, the Detroit auto manufacturing giant that killed their electric car 10 years ago, should be given a second chance. Some say that the 100 mile-per-gallon Chevy Volt promised in 2010 is too little, too late.

Tax payers are faced with a real dilemma. Should we support bailing out the Big 3 in Detroit? After all, investment banks got federal money to cover credit default swaps, which are unsecured side-bets on imaginary financial instruments. GM, Ford, and Chrysler are real brick-and-mortar companies that build real goods and employ millions of Americans. The news pundits warn that the challenged economy can't tolerate a shut down this large in the Midwest. Imagine hundreds of thousands of auto workers marching on Washington, with the fierceness and fury of Martin Luther King, demanding that Uncle Sam save the most powerful symbol of American manufacturing from extinction and mass layoff of over a million people.

Patriotism aside, how did GM and the rest get themselves in this mess? We may be quick to assume that like the Dow, Detroit is going down with the sinking ship the banking and mortgage crisis. The timing of the sudden run on government bailouts may suggest that the Big 3 are just another victim of the financial fiasco of Oct 08. No, it's just odd timing. Detroit's demise, if it comes to that, is by it's own doing – decades of poor decisions, culminating in it's most recent choice to continue making low mpg cars and trucks, even as gas prices hit $4+. Folks couldn't unload their SUV's and find enough high mpg cars to replace their daily driver. When they did, most of them were made in Asia.

GM made big cars because their ad consultants told them that big cars made drivers feel powerful. When city folks I know, who only drive in the city, purchased SUV's, their excuse to me was always that in a crash, big cars are safer. Physics would support that until every American seemed to be driving bigger and bigger cars.

Instead of making advances in hybrids and eletric vehicles, GM not only discontinued their only electric car after making only 1100, they decided that even less than a thousand on the road offered too much of a challenge to their gas-guzzing hegemony and actually had them towed away from their clinging lessees -- who offered GM millions just to keep the cars -- and crushed them!

Should we really have sympathy for car company that decided it was better to sue the State of California and overturn it's 10% zero-emission law rather manufacture a constantly improving electric car?

And what about this Volt? This hybrid sounds promising: You plug it in to power the first 40 miles, after which a gasoline powered generator makes just enough electricity to keep you going. 100 mpg or more is predicted for the car. Though GM would have you think it's breakthrough technology, it isn't, really. Every diesel locomotive ever made operates on the same principle: generate electricity to power the electric motors pulling the train. They are the most fuel efficient system in the world. When were they invented? 1920. So the Volt, we discover, is an old technology that GM finally decided the American driver was ready for.

The conclusion we come away with is that there is some kind of collusion between oil companies and domestic Detroit Iron. And somehow the wild and wacky speculation in oil futures (which was solely responsible for the dramatic gasoline price hike earlier this year), threw things out of control and drivers got spooked.

The car companies have known about the threat of high gas prices and shortages since the mid 1970's, but to hear the CEO's of these companies talk today, you would think that this problem suddenly occurred in the last few weeks. In a separate story we will talk about the real purpose of GM's introduction of the Chevy Volt - and it's not about getting good gas mileage or lowering our carbon footprint. Stay tuned.

The Company That Killed the Electric Car Brings It Back

Bill Georgevich reporting

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General Motors, after having re-introduced the electric car as the E-V1 then sending every one of those cars to the crusher, is now pretending it never happened. Ten years after the death of the E-V1, GM has gone green again, perhaps this time not as begrudgingly. The Chevy Volt, a plug-in hybrid, is being touted by Chevrolet as not just "gas friendly" but "gas-free", since the first 40 miles can be traveled without the use of any fossil fuel.

Below is a review of the Chevy Volt from Bryan Walsh.

I can see the future of the automobile — I just can't quite hear it. I'm riding around General Motors' secure proving grounds in Milford, Mich., in what from the outside looks like an ordinary Chevrolet Malibu. But inside it couldn't be more different. The test car isn't powered by a gasoline-fueled internal combustion engine, like nearly every automobile since the first Model T rolled off Henry Ford's assembly line in 1908. Nor is it a hybrid like Toyota's fuel-efficient Prius with a gas engine assisted by an electric motor. This Malibu is electric, powered by a 400-lb. lithium-ion battery nestled beneath the floorboard — an energy source that is not only silent but entirely emission-free.

Actually, what we're driving is not a Malibu at all but a "mule," a stunt double for what will become the Chevrolet Volt, a new plug-in electric car that could save a struggling GM and, not incidentally, change the way we drive — just as long as they can make it work in time. "Developing this car is not something for the lighthearted," says Alex Cattelan, the Volt's assistant chief vehicle engineer, from behind the wheel. "But it's so much fun."

To understand why the Volt could be so important to two once dominant institutions that have hit hard times — General Motors and the United States — all you need to do is visit your nearest gas station, where a gallon of unleaded now costs an average of $3.64. We're spending around $700 billion a year to import oil, with much of that money being shipped to countries that don't like us very much. When we burn all that imported oil, we release nearly 2 million tons of carbon dioxide into the atmosphere each year, heating up the planet. Those twin trends can't continue, and the solution "is to move away from oil as quickly and as devastatingly as possible," according to former CIA director turned green warrior James Woolsey.

GM is hardly the only major automaker to explore electrics as the way to make that happen; in recent months every major international automaker has announced plans to produce plug-in hybrids, semi-electric cars that can be recharged from a wall socket, like the Volt. But it is GM — which has seen revenues vanish as Americans stampede away from SUVs and other gas gluttons — that is pursuing the most ambitious program. The company does not have a happy history with electrics, having produced the battery-powered EV1 in the 1990s only to discontinue it in 1999. But this time GM has staked its future on the Volt, promising to have it in showrooms by the end of 2010 — far quicker than the pace of development for a standard car, let alone one whose battery does not technically exist yet. "This is not a choice," says Rebecca Lindland, an auto analyst for the research firm Global Insight. "This is necessary for their survival." And in a warming world, perhaps ours too.

Under the hood, Bob Lutz is not your typical green. The former Marine pilot — who owns a pair of surplus military jets he likes to fly — probably has a carbon footprint half the size of Michigan. But it is the gravelly Lutz, GM's vice chairman for global product development, who is the driving force behind the Volt. Lutz worked in the auto industry for decades, left to run the battery company Exide Technologies and returned to GM in 2001 full of ideas. His dream was to develop an all-electric car that would be powered by lithium-ion batteries similar to the kind now used in cell phones and laptops. Most current hybrids use nickel-metal-hydride batteries — less expensive, but also less powerful. In 2003 a Silicon Valley start-up named Tesla Motors announced it would produce a $100,000 lithium-ion-powered sports car, and that helped galvanize Lutz. "If some guy in California can do it, to me it shows that this is certifiable technology," he says.

GM as a whole shared that confidence and at the 2007 Detroit Auto Show unveiled an early concept-car version of the Volt. To the surprise of even Lutz, it was the hit of the show. Other hybrids may offer fuel efficiency, but the Volt would go several steps further. A traditional hybrid like the Prius has two means of propulsion: one electric motor run by a battery and one engine run by gasoline. The battery can't take you very far — maybe 7 or 8 miles — which is why the gas engine kicks in so often. But as you drive, the battery does pick up extra juice, mostly courtesy of what's known as regenerative braking — collecting the heat generated every time you hit the brakes, converting it to electricity and storing it in the battery. The result: less gas used on every trip.

The Volt will rely on its electric motor, powered by its new battery, and will go up to 40 miles without using a drop of gas. For the nearly 80% of Americans who drive less than 40 miles a day, that would mean they could effectively eliminate gasoline from their lives. After 40 miles, the Volt's gas engine switches on, but unlike the Prius', it doesn't make the car move an inch. Rather, it generates electricity and feeds it to the battery, much the way an emergency generator in a hospital keeps the lights on during a blackout. This allows you to go an additional several hundred miles before you need either a fill-up or a charge-up. "With [past electrics] people had to change the way they lived," says Andrew Farah, the Volt's chief engineer. "I want a vehicle that doesn't ask them to change at all."

Is global warming dead?

Bill Georgevich reporting

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Many Republicans who already thought carbon cap and trade regulation was bad for the economy, now say that with the growing global economic crisis, American energy companies cannot afford to be green. Like the “Drill, baby, drill!” hysteria promoted by Governor Sarah Palin in the Vice Presidential debate, Republican congressmen and senators are warning that global warming will just have to wait.

The AP reports:

Democratic leaders in the House and the Senate, and both presidential candidates, continue to rank tackling global warming as a chief goal next year.

But the focus on stabilizing the economy probably will make it more difficult to pass a law to reduce carbon dioxide and other greenhouse gases. At the very least, it will push back when the reductions would have to start. As one Republican senator put it, the green bubble has burst.

"Clearly it is somewhere down the totem pole given the economic realities we are facing," said Tom Williams, a spokesman for Duke Energy Corp., an electricity producer that has supported federal mandates on greenhouse gases. Duke is a member of the U.S. Climate Action Partnership, an association of businesses and non-profit groups that has lobbied Congress to act.

Just months ago, chances for legislation passing in the next Congress and becoming law looked promising. The presidential candidates support mandatory cuts and a Democratic majority is ready to act on the problem after years of the Bush administration resistance.

But the most popular remedy for slowing global warming, a mechanism know as cap-and-trade, could put further stress on a teetering economy. Under such a system, the government would establish a market for carbon dioxide by giving or selling credits to companies with operations that emit greenhouse gases. The companies can then choose whether to invest in technologies to reduce emissions to meet targets or instead buy credits from other companies who have already met them.

In an interview with The Associated Press, Representative Rick Boucher (D-Va.), said that in light of the economic downturn, a bill that would give polluters permits free of charge would be preferable. "The first way we can control program costs is by not charging industrial emitters," said Boucher, who released a first draft of a bill this past week with the chairman of the House energy and commerce committee, Representative John Dingell ( D-Mich.). Giving away right-to-pollute permits was one of the options.

Other Democrats, however, see a cap-and-trade bill - and the government revenues it would generate from selling permits - as an engine for economic growth. Democratic presidential nominee Barack Obama supports auctioning off all permits, using the money to help fund alternative energy.

"If you see this as a job creation opportunity for the U.S. to develop the products that are then sold around the world, then you should be optimistic about what the impact of passage would mean for the American economy," said Representative Edward Markey (D-Mass.).

Conservative Republicans, who were never fans of a law to curb greenhouse gases, have used the economic downturn as a rallying cry. Oklahoma Senator James Inhofe, the senior Republican on the Senate environment and public works committee, in a blog entry this month, criticized 152 House members for releasing a set of principles to tackle global warming in the midst of the economic turmoil. "The current economic crisis only reinforces the public's wariness about any climate bill that attempts to increase the costs of energy and jeopardizes jobs," Inhofe said.

Representative Joe Barton (R-Texas) took the argument a step further when he said the Boucher-Dingell bill could lead the country "off the economic cliff." Even supporters of federal regulation of greenhouse gases acknowledge the difficulty given the state of the economy.

Senator John Warner (R-Va.), a lead sponsor of a Senate bill to curb greenhouse gases that failed this year, acknowledged that the economy could delay when reductions in carbon dioxide would start. Warner told The AP that any bill should allow the president to decide. "We must continue to think and devise a piece of legislation that will enable the president of the United States to control timing ... dependent on the president's analysis for the ability of the economy to assume the financial burdens," he said.

The U.S. is not alone. As the economic crisis has spread to markets across the globe, work to curb greenhouse gases elsewhere has stalled.

Earlier this past week, Rajendra Pachauri, head of the UN climate panel, said discussions about global warming solutions were "on the back burner."

Pachauri shared the 2007 Nobel Peace Prize with former U.S. vice-president Al Gore for their work on climate change."I'm absolutely sure that climate change will be the last thing people will think about at this point in time," he said. "Sooner or later, they will come back to it."

The upside is that in hard economic times, and with high energy prices, the amount of pollution in the air tends to decline. But environmentalists say it won't be enough to stop temperatures from rising.

Hey, T. Boone, the WindWing is here

Melanie Pahlmann reporting

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While oilman T. Boone Pickens installs thousands of turbines on his massive wind farm in Texas, a small California company is unveiling an invention that may revolutionize wind power production.

The "WindWing" may prove to be a superior alternative to the wind turbine, for an impressive variety of reasons:

• It can capture energy with low-velocity wind (as little as 6 mph, roughly half the mph necessary for wind turbines)
  
  
• Its wing-shaped design makes it a more efficient energy generator than the propeller turbine (40-60% compared to 5%)
  
  
• It poses no threat to bird populations
  
  
• It is quiet, unlike the propeller design
  
  
• It can be installed virtually anywhere, which reduces the need to transport the power over long distances
  
  
• Its small size and low cost make wind generation possible for individual homeowners and small communities, helping to decentralize ownership of the power source

While we welcome the enormous amount of clean energy Pickens' 4,000 megawatt wind farm will disseminate to the masses (1.3 million households when the project is fully operational), we do well to remember that Pickens will personally earn billions in revenue from this endeavor.

WindWing inventor Gene Kelley is a tireless, enthusiastic visionary who believes that renewable energy can be produced locally and inexpensively.

Wind energy, in particular, can be made far more efficiently than it currently is (and will be at Pickens's farm). Propeller-driven turbines are only about 5 percent efficient in converting available wind to actual energy. The 3-blade design offers a very small surface for wind contact. The wings of Kelley's WindWing offer a much larger surface, which increases its efficiency rating to 40 to 60 percent.

Wing units can be stacked vertically and their size can be customized in manufacturing, ranging from small models the size of a conference room table to large units the size of a jumbo jet. A small single unit could be installed in one's backyard, a "mini-cluster" of a few small units could power a neighborhood, and a "macro-cluster" of many large WindWings could power a shopping mall or factory.

Remarkably, the WindWing is not limited to wind as an power source. It can be placed upside down in a stream, river or aqueduct and catch the force of the moving water. The weight and constant flow of the water could create 800 times the force available from wind, according to Kelley.

Kelley and his company W2 plan to launch a prototype this fall at the Santa Barbara Harbor. Meantime, W2 has signed a contract with Hawaii's Natural Energy Laboratory (NELHA), where the WindWing is being tested for performance in a variety of wind environments. Breadth of application is also being researched; the NELHA successfully powering electric vehicles, batteries and other energy needs with the WindWing. They are also playing with a wind-solar combo. Photovoltaic cells have been mounted on the wings, which create 24/7 dual power generation.

One final adulation about the virtues of the WindWing: the cost. A WindWing unit comes in at about one-tenth the cost of a propeller turbine. Kelly also tells us that a single WindWing can do the work of 12 propellers.

The W2 web site is fairly sparse, but you can learn more here:

The W2 web site latest news

West Hawaii Today article

Ventura Country Star article