Friday, July 27, 2012

Musketeers Riflemen and Being on the Mark

The world of green was turned upside down this week. Our friends at Tesla reported their quarterly results and people are now beginning to realize that the Green Machine had it right about Tesla being a touch and go company. $500 million in US DOE funding and they are now producing 10 cars a week for the super-rich out of their Fremont California assembly facility. Of course Elon the Musketeer pontificated to Wall Street in the conference call that he would produce 500 cars in the next quarter and 4,500 in the final quarter of 2012.

His losses for the second quarter were over $100 million and he produced perhaps only 30 of the Model S in the month of July. Yet he will produce 470 in the remaining two months of the third quarter and then 1,500 a month in the fourth quarter. His company is walking on the edge and he will have to raise more equity to pull off the manufacturing miracle he needs. It will be really interesting to watch the story over the next three or four months. Of course the Green Machine will report as soon as any news crosses the wire.

Here is more on the Department of Entropy and their green energy debacles. A 123, my favorite target of being the poster child of Chu chewing on too big a piece of horse meat, announced today that an important member of their Board of Directors resigned . He is Dr. Paul Jacobs who is the CEO of Qualcomm. Dr. Jacobs had been on the board of A 123 for approximately 10 years and is a well-respected high tech guru. His departure today caused A 123’s stock to drop to 49 cents at the close of trading. I have often opined over the past three or four years that this company would flat line and that all the money given to them by the Department of Entropy will be wasted.

A 123 is actually a far bigger story than Solyndra even though the money the DOE wasted will only total $129 million. The money given to A 123 was in the form of a grant and not a loan guarantee. We the tax payers have no claim on the equipment, IP, or other assets that A 123 has. A 123 took out a loan recently from some pay day sharks for approximately $50 million. The $50 million has to be repaid in $2 million chunks each fortnight. This means every two weeks the company has to come up with cash or issue stock in the value of the $2 million with each share being valued at only 82% of the closing price. As an example with the stock closing at 49 cents today and assuming the company will issue stock rather than paying $2 million in cash, the company will need to issue approximately 5 million shares to loan sharks just for the loan repayment of this two week period.

The more the shares of A 123 dive the more the existing shareholders become diluted and the more percentage of the company the loan sharks own.

OK a sad story for A 123 but what is the big deal that makes this bigger than Solyndra? The big deal is A 123 is a shareholder and supplier to Fisker. Fisker is the wonder child of Al Gore and his team at Kleiner Perkins. Fisker received over $180 million from the DOE for engineering of their Karma that is not even produced in the USA. As A 123 goes flat line, Fisker will also have to raise more money. Fisker is not public and I doubt Kleiner Perkins wants to lose more money. The equity sharks Fisker previously used to raise private equity, a Chicago company called Advanced Equity is under SEC investigation and I doubt any money can be raised for Fisker except perhaps directly through one of KLeiner Perkins in house funds. Even Chu cannot give them more money. The fitting out of Fisker assembly plant in Delaware is on hold. So who will save Fisker? I doubt Al can call DC for any further help with his DC electric car. The Chinese may not want to steal this technology for a song and the Europeans have their own problems.

What a mess. A 123 probably will trade for even less next week, Fisker will never equip the Delaware assembly plant, and Elon is walking the tightrope in Fremont, California. Had all listened to the Green Machine including my Congresswoman, the Senate Committee that I gave outside witness testimony to, and the numerous movers and shakers in Silicon Valley that I contacted, then this mess could have simply been avoided and we could have let Coda Blue simply import the few thousand electric cars from China and we could have laughed at how dumb the Chinese were to believe millions of electric cars would ever hit the road.

Before the election, there is still a chance for the President to fire Chu and for him to distance himself from this mess by saying that he the President never claimed to be the guru in thermodynamics and he was given horribly wrong advice from Stevie Wonder who was clueless at the helm of the Department of Entropy. As for the Green Machine, I admit the mistake I made. I thought these clowns who have so much political power would keep A 123 alive beyond the election and that this would just be a post script in January or February of next year. Now I think that Tesla will be that post script. If Tesla implodes, It will be interesting to see how Elon can handle the failure or whether he slinks back to the new South Africa and claims he had to leave the USA because we wanted to have him serve in the US Army to pay back the country for all the DOE money he wasted on his non tail pipe dream.

Note a Musketeer was an early form a rifleman soldier in European armies. Our Musketeer is proud to admit he ran away from South Africa at age seventeen to avoid compulsory national service in the South African Army. At age seventeen the Green Machine did not run away and served my compulsory national service in the South African army as a rifleman. I guess I got to be a marksman at picking up on thermodynamic infiltrators at a young age by being trained as a rifleman. It might have served Elon well to actually have done some National Service he may have learned some thermodynamics by taking some heat marching around under the hot African sun.

Saturday, July 21, 2012

Compressed Gas Vehicles

I have blogged previously on the merits of compressed natural gas as a transportation fuel and how Bolivia leads the United States in the number of such vehicles on the road.  Last week I read the US energy information agency’s report on Egypt and was impressed to read that in 2010 over 133,000 vehicles fueled with natural gas were operating in this poor country.  This is about the same number of vehicles operating on natural gas in the USA.  Great the US is tied with Egypt and behind Bolivia in converting vehicles to run on natural gas.

I could not find any statistics on how many plug in electric vehicles operate in Egypt.  I am pretty sure their Secretary of Energy did not spend much of the country’s wealth on this pipe dream.  The only pipes Egypt installed were pipes to transport natural gas.  Talking about the Secretary of Energy he has been very quiet of late and is probably working on his resume that should have only two lines in it.

1997 -  Won the Nobel Prize in Physics for the manipulation of neutral particles

2012 -  Blew Mega Billions on pipe dreams in the green space via the manipulation of a non-neutral and socialist inspired energy policy

My friends at A 123 saw their stock hit 69 cents this week only to rebound a little on Friday when they claimed to have won a Chinese customer for electric grid support.  The level of sales to this Chinese customer will be 2 megawatts of batteries.  The system will be used to help regulate grid frequency.

Well my friends a 2 megawatt system may be able to stabilize the grid frequency on a system with a total load of about 4 megawatts.  This is enough to stabilize the load of a village with 10,000 people.  As the Chinese have 1.3 billion people the “smart” money on Wall Street divided the 1.3 billion by 10,000 and estimated that A 123 will sell 130,000 of these systems.  133,000 is approximately the number of compressed gas vehicles in Egypt.    

I have got news for you, even with grid stabilization sales the lights in A 123’s factory that Stevie Wonder financed will go out just after the election and the Chinese will be lucky to see one unit that stabilizes their grid.  Perhaps the folks in Michigan can use the batteries to keep a few of the factory’s lights glowing when the auction is held to sell off the equipment we all paid for with our tax dollars. 

What we need is economic stabilization!  We need the Department of Energy  to wake up to the fact that we have 80 times as many vehicles on the road as there are in Egypt and we should have 80 times as many natural gas fueled vehicles on the road as Egypt.   This means 10 million natural gas fueled vehicles. 

I reported that the DOE is now funding with approximately a million dollars a couple of project in the San Francisco Bay Area to develop improved gas storage on board a vehicle.  Maybe the folks at the companies that received the DOE grants should make a trip to Cairo and see how it is done.  Stevie Wonder should accompany them and while in Egypt he can witness what happens when people realize their government favored the projects of the crony friends and did no good for the people.   

Perhaps the folks from Kleiner Perkins, Drapper Fisher, and Khosla Ventures should also go on the trip as they benefited enormously from the waste at the Department of Entropy on gangrene startups.   Of course the VCs will fly in their private jets and Chu can fly United which is perhaps the worst airline in the world.  Al Gore should also be part of the mission as he was the Architect of the Great Pyramid Scheme.  Al will tell the Egyptians he invented Hire Old Graft and Fix the first written language.

Saturday, July 14, 2012

Has the sun set on the US Green Energy Companies?

I attended the InterSolar trade show in San Francisco on Thursday.  It looks like the sun has set on US photovoltaic companies.  90% of the companies exhibiting PV cells in the show were from Asia (mostly China with a sprinkling from Japan and Korea), 8% from Europe and 2% from the US.  

The mood at the show was somber given the extremely low prices that PV systems are fetching these days.  Many companies are losing much money and there is an air of pessimism that many of the players in the PV supply chain will fold. 

The biggies in the US, First Solar, Sun Power, and Sun Edison did not exhibit.  Of course Solyndra, Hoku, and Abound could not exhibit as they are as dead as doornails.   BrightSource the US solar thermal company did not exhibit either.   GE did exhibit and so did SolarWorld.  The show should have been held in Shanghai as it simply was not a showcase of our North American PV technology.  Canadian Solar was an exhibitor but for all intents and purposes they are a Chinese company.  Attending the show made me feel sad about the current state of the US PV industry.

The most interesting item to me in the entire show was a booth that the owner had actually vacated but had left his exhibit remaining there.  It was a tiny booth perhaps 4 feet deep by 8 feet wide in a far off corner of the hall.  In the vacated booth there was a white direct current powered 14 cubic foot chest freezer that was made in China. 

This got me thinking that wow this is the right technology for a village in a poor country where a freezer is needed for a clinic or a small grocery shop.  Operating the freezer on PV power with direct connection (no inverter needed) to a brushless DC motor makes all the sense in the world.  The Freezer also acts as the energy storage (in this case cold storage) device and while the sun shines the motor will drive the refrigeration compressor  and for the rest of the time the chest that is well insulated keeps food cold without the need for power.   

No doubt that soon the Chinese will sell millions of freezers powered with brushless DC motors and the small set of PV cells that are needed to power the unit.   This like cell phones will bring enormous improvement to the quality of life of folks who live in rural villages in poor countries.

I have oft opined that A 123 will be a goner.  Well that day is getting closer and closer.  Today their stock closed at 84 cents a share and they simply cannot continue for much more than five or six months.  Of course Al Gore and his Fisker team will try to not let their battery supplier A 123 die before the Presidential election in November. 

Valence Technology another lithium ion battery company in the US went into chapter 11 bankruptcy this week, following Ener 1 that went bust a few months back.  A 123 is the sole remaining US lithium ion battery company and they are basically on life support.   

A US listed but primarily Chinese funded solar company Hoku also called it quits this week with a partially built factory in Idaho.  Hoku was pretty stealthy with Chinese backers who were building a $700 million polysilicon facility in Pocatello.   This link from the Hawaii Free Press is very revealing.

I wonder if Secretary of Energy Dr. Chu attended the Intersolar show or had some of his folks at the department of entropy attend the show.  If he or his reports attended, I wonder if they left the show as dejected as I did feeling that the state of the US clean energy companies is pretty much at full discharge.  The wealth has been spent and little to no success is evident.  

I hope there is soon a show for shale oil and gas companies that comes to San Francisco so I can get a boost of energy and feel like there is hope for us in America.  Interestingly it was reported today in the San Francisco Chronicle that the DOE is funding two Bay Area research projects for the improved storage of compressed natural gas as a transportation fuel.   The level of funding two the Bay Area companies totals about $1 million.  Given that Chu wasted about $50 billion on his other hair brain green tech schemes the natural gas research funding is a proverbial drop in the fuel bucket.  But sometimes a drop can make a difference when the underlying thermodynamics are favorable for energy to be yielded. 

Saturday, July 7, 2012

Just Born Bieber Turns 100

The big news of the week is that Just Born Bieber was caught speeding in his chrome plated Fisker Karma.  Just Born claims he had to speed away from paparazzi that were chasing him.  We now know the Fisker Dogma is capable of reaching 100 MPH.  What was not revealed was whether the car was using its battery power or the backup internal combustion engine to attain the 100 MPH velocity.  I have to think the engine was firing on all fours and the batteries were pumping electrons simultaneously.

Almost exactly five years back Al Gore’s son was caught speeding in a Prius and he too got the hybrid to reach 100 MPH.

This has me thinking of Newton’s laws of motion and how fast the Fisker or the Prius would have travelled if they were not carrying heavy battery packs?  The Fisker has a far heavier battery pack than the Prius and by my estimate Just Born could have reached 125 MPH if the Fisker was only engine powered.  The young Gore could have attained 105 MPH but his speed was also limited by the mass of the drugs found in the trunk of his Prius at the time of his arrest.  Just Born was not arrested he was just given a speeding ticket.   The California Highway Patrol could not find any of the paparazzi that were reported to be chasing Bieber in five or six other cars.

OK enough about young people who speed and let’s now think about one of America’s most well know Generals.  Yeah General Electric announced they are postponing the construction of their $600 million factory in Colorado to produce PV solar cells.  GE also had proposed cadmium tellurium chemistry on flexible substrate.  Again the US got clobbered by cheap Chinese imports of silicon based solar cells.  It is interesting that GE produced silicon solar cells many years ago and dropped that process for the promise of CdTe.

Job growth in the US last month was anemic with only 80,000 jobs added.  The President is still blaming his predecessor for the poor results in the economy 42 months after he took office.  His contender claims to have real concerns for the middle class and pounced on the bad economic news to improve his poll numbers.    

On Thursday, my Assemblyman in the State House who wants to be my Congressman in the US House finally responded to my request to investigate how Bloom Energy requested state training funds in California for the handling of hazardous Hydrogen Sulfide in their fuel cells when their General Manager stated under oath in Delaware that the cells have no Hydrogen Sulfide and that the request for California state funds was “erroneous”.   I guess after six emails over six weeks my Assemblyman finally realized there is an election in November and he had better respond to the pleas of one of the voters in his congressional district.  I will report if something actually comes out the Assemblyman’s office investigating the request for state of California training funds.

The Assemblyman and his colleagues in Sacramento were extremely busy on Friday when they passed the funding bill for the High Speed Rail Line in the Southern part of the Central Valley.  This train will reportedly travel at two hundred miles per hour.  I guess if Al’s son and Just Born combined their efforts they could keep up with the “tres grande vitesse” train as it runs side by side with the highway.  Just Born can use the defense that paparazzi on the train were trying to take his picture.   Actually Al Gore Jr. is now into boxing for charity and has got his life together so he may not join Just Born on the trip.

Wednesday, July 4, 2012

Independence and Being Independent

Today we celebrate the 236th birthday of America. I love Independence Day. During, the past few months, I have blogged quite a bit about Delaware our First State and it being the little mid Atlantic state that had the foresight to be first in ratifying our constitution. Delaware is a small state with precisely one representative in the US House for its 2010 population of 897,934. The Delaware congressional district is an at large district covering the whole state. It is the oldest unchanged congressional district in the US and has not changed shape or size since 1787. For ten years (1813 till 1823) Delaware had two representatives in the US House but they were both chosen on a general ticket from the same geography covering the entire state. I like Delaware because it is first and foremost as well as consistent. These qualities are lacking nowadays.

Talking of consistency and being independent, Bloom Energy claims to have two independent directors on its board of directors. These two people are Colin Powel and TJ Rodgers.

This from Bloom Energy’s web site

“General Colin Powell Independent Board Member

General Colin L. Powell, USA (Retired) served as the 65th U.S. Secretary of State from January 2001 to January 2005. He served 35 years in the U.S. Army, rising to the rank of Four-Star General and from 1989 to 1993, served as the 12th Chairman of the Joint Chiefs of Staff. He also served as the National Security Advisor to President Ronald Reagan. General Powell is the author of his best-selling autobiography, “My American Journey.” Since returning to private life, he has become a strategic limited partner at Kleiner Perkins Caufield & Byers, a renowned Silicon Valley venture capital firm. General Powell is the Founder of the Colin Powell Center for Policy Studies at his alma mater, the City College of New York. The Center is student-focused with a mission to develop a new generation of publicly engaged leaders. He is the Founder and Chairman Emeritus of the America's Promise Alliance, dedicated to forging a strong and effective partnership alliance committed to seeing that children experience the fundamental resources they need to succeed. General Powell is also helping to raise funds for the Martin Luther King, Jr. Memorial in Washington, DC and for the construction of an education center for the Vietnam Veterans Memorial.

T.J. Rodgers Independent Board Member

T.J. Rodgers is founder, president, CEO, and a director of Cypress Semiconductor Corporation, and Chairman of the Board at SunPower. In addition to Bloom Energy, he sits on the board of directors of high technology companies including, SolarFlare Communications, Silicon Light Machines, Silicon Magnetic Systems, Infinera, and Cypress MicroSystems. T.J. was a Sloan scholar at Dartmouth College, where he graduated as Salutatorian with a double major in physics and chemistry. He attended Stanford University on a Hertz fellowship, earning a master's degree and a Ph.D. in electrical engineering.” defines an independent director of a company as:

• An independent director is one which has no ties to the firm in any way. With an independent director, there is no chance of having a conflict of interest

On Independence Day I have to opine on Bloom’s use of the word Independent as it certainly does not correspond to’s view that the person “has no ties to the firm in any way”. TJ Rodgers by his own admission at the May 2012 meeting of Cypress Semiconductor shareholders had the following to say of his involvement with Bloom Energy.

”I have been working for eight years on a company called Bloom Energy, which is currently private. Bloom Energy makes fuel cells. I meet with Bloom Energy several times a quarter, and I help them much above and beyond the investment that I have made in them. I believe Bloom Energy will be the most important IPO ever in the high-tech [energy] sector. We’ll see if that works out, but this is a change-the-world kind of company.”

I don’t have any data on Colin Powell’s investment in Bloom Energy if any and how often he works at Bloom, but Colin is a “Strategic Advisor” to Kleiner Perkins and Kleiner Perkins is a large shareholder in Bloom Energy.

In previous blogs I had called for Colin Powell to resign from Bloom Energy’s board and for TJ Rodgers, as an independent board member, to investigate the Bloom Energy project for power generation in Delaware. It is patently obvious I was in error to consider TJ Rodgers as an independent board member. Forgive me as I only found his address to the Cypress shareholders two days ago. Now I don’t believe that Bloom has any independent board members who have no conflict of interest and I doubt that the board of directors has anyone who can impartially investigate their permit application in Delaware. Perhaps more seriously Bloom told investors in their recent round of funding that raised $150 million that Colin Powell and TJ Rodgers were independent directors. These investors were misled by Bloom’s claims of having two independent directors.

I suggest you all read the full text of TJ Rodgers’ speech to his Cypress shareholders in which he castigates Warren Buffet for suggesting the US should have invested in “shovel ready” projects. TJ is known to be an outspoken person in Silicon Valley, this time he may have just dug his own grave.