Wednesday, January 29, 2014

Money Crisis

Ben is out and Janet is in at the Fed.  The Turks and South Africans are raising interest rates.  We have a global money crisis.

My favorite green gasoline boondoggle KIOR is hitting the skids and Vinny Cost Us is still fuming at 60 Minutes for outing him as a thermodynamic neophyte.  If you are plain dumb you got to love that KIOR stock and you have to believe that Vinod and his buddy Bill Gates will breathe life into the still born wonder child of gasoline from pine. 

Vinny Cost Us is probably looking to buy Pine-Sol  and combine it with KIOR and resurrect his green dream as a company that makes solar panels from pine trees using his bottle of special catalyst he held in his hand for the Leslie My Car Is Stalled 60 Minutes show and tell.

Robert Rapier (Rsquared) the very smart and astute Chemical Engineer in the 60 Minutes piece has written a piece on Vinod Khosla.   Here is the link to Rsquared’s piece.

I think Rsquared was being kind to the man who brought us Cello, Range, KIOR, and Calera.  Lsquared the Green Machine would not have been as kind to Vinny.   I would simply have said to Vinny “Pine-Sol is the powerful scent of real clean, Vinny I smelled the gangrene rats at Cello, Range, KIOR, and Calera and those rats emitted a powerful scent of the use of public funds for utter thermodynamic nonsense.”   Gas Gangrene is a disease called myonecrosis.  Vinod’s green flops are simply called money-crisis.  Vinny maybe the Turks and the South Africans will buy your green stories.  Pine-Sol may smell good and clean but it is ineffective at treating Money Crisis.

Saturday, January 25, 2014

The Ipad Saves Electric Power

EPRI the Electric Power Research Institute issued a report on how much power an ipad uses in a year and how much it costs to power the ipad.

Only $1.36 per year for the 11.86 kilowatt hours a year the ipad needs.   My friend Dr. P in Anaheim with his 100 miles a day commute in his Tesla that uses 40 kilowatt hours a day of AC electricity could power his ipad for more than 3 years with the power he uses in a single weekday going to and from work.

A Starbucks store has machines that make steam and espresso that use a lot of electricity.  The stores also have lighting and air conditioning.   In 2012 Starbucks stores used 6.36 kilowatt hours per square foot permonth.  If the average store is 800 square feet, the average store will use 61,056 kilowatt hours per year and could power 5,148 iPads all year long.

I wrote about Starbucks in 2007 and Omninerd picked it up.

The iPad only uses 5% of the power of a desktop computer so my hat goes off to Apple for the ipad.  Starbucks has a long way to go before becoming pale green.

Thursday, January 16, 2014

More on 60 Minutes

More folks are opining on the 60 Minutes Greentech piece.   The discussion is important.   A green reporter who has a spent a lot of time following the industry posted this link on Gigaom

She has many valid points in her blog.  But certainly got the Ivanpah project wrong when she stated:

“Even within the loan program, there were more wins than the 60 Minutes piece let on, like the Ivanpah solar farm that created a lot of jobs outside of Las Vegas. The U.S. government needs to give more support to next-generation energy technologies, not less.

Ivanpah is a concentrated solar thermal project that has turned out to be expensive and has been significantly delayed in startup.  Ivanpah is also battling a problem of killing birds that fly through the concentrated sunlight and get burned.   It is not the next generation in solar electric power it is probably the Betamax of solar electric power.

The Phase 1 of the Ivanpah project sells power to PG&E at approximately 20 cents per kilowatt hour.   PG&E can now purchase power from a similar sized PV farm for half this price without ant dead birds.  We the customers of PG&E are stuck with an above cost long term power purchase agreement.   Of course it is our monthly money that will keep the Ivanpah project solvent and pay back the DOE loans.

Ivanpah is only a “success” because we the people will continue to subsidize an overpriced contract for the purchase of the power.   The DOE will chalk it up as a successful project and folks like Ms. Ferenbacher will extol the virtues of the jobs created.

Let us assume that 30 permanent jobs are associated are associated with Phase 1 that will generate 129 megawatts.  The entire project with three phases will create 86 permanent jobs. Let’s assume the capacity factor is 25%.  Doing the requisite math the extra 10 cents per kwh of overpayment by the customers of PG&E amounts to $28,251,000 per year.  We the customers of PG&E are paying approximately one million dollars a year for the next twenty years for each permanent job the project created.  When folks like Ms. Ferenbacher can actually do arithmetic they should report that the US DOE should never repeat a project like this.  Not only do the birds get burned we the customers of PG&E got really burned

Tuesday, January 14, 2014

Vinod Responds To Sixty Minutes

60 Minutes did get it a little wrong.   They should have asked Vinod about Cello as well as Range.   They should have asked him about Calera.   They should have asked him why Condi Rice has resigned from Kior and the CFO left or was dismissed without any explanation.   They should have asked him about him hosting Obama at a fund raising dinner at his house.

Obama quipped that Vinod has two very big dogs.   Actually Vinod's pack of dogs include Cello, Range, Kior, and Calera.   Cello faked bio fuel when in fact it was fossil.   Range was completely deranged.  Kior is the story of the day.   And Calera was the company that was going to make cement from CO2 in the sea.   Bechtel and Peabody Coal believed that crap I never did.

I posted this over a year ago

The poster child of the gangrene greenwashing of pure junk is Calera.  This was to be the “jewel in the crown” of Khosla’s green portfolio.  The company claimed to sequester CO2 in cement it made from power plant emissions.  Bechtel said it was great, Peabody Coal was an investor, the US Government gave it money.  All the company could do was turn expensive chemicals into less expensive ones,  They added Calcium Chloride and Sodium Hydroxide two expensive chemicals to the stack gas to yield Calcium Carbonate and Salt two much less expensive chemicals.  Had anyone simply looked at the cost of the reagents and the value of the products they would have said “wow we are making sawdust out of a mahogany table”.

Old Vinod had another legal battle going on with some surfers who wanted to walk over his seaside property to go surf at the public beach called Martin's Beach.

I wonder if Obama and Khosla discussed the Martin's Beach case at the $32,400 a head fund raising dinner at Khosla's house, or the President who loves the sea given his Hawaii roots simply decided that the surfers could lean forward somewhere else as the money Vinod and his friends were bringing into the campaign was much more important than hanging ten when one could hang 32,400.

Vinod please respond to this !!!!

60 Minutes still has to do their piece about the Bloom Box fake out.

KIOR Khosla and Alberta

KIOR has dropped in value since the management call and now the Wall Street analysts are finally calling the company as it is.  I call it a zombie company with Vinod Khosla and his friend Bill Gates able to keep the corpse on life support.  The Province of Alberta that loaned the company money last year is probably headed for the door. 

One possible scenario is that Khosla and Gates may take the company into Chapter 11 and then take it private.   They will pay off the loans made by the state of Mississippi maybe in full or maybe at a discount.  The shareholders who bought stock will get bupkis except what they recover in class action law suits.   Under this scenario Khosla and Gates will keep funding slow low cost reduced operations and will say look Uncle Sam we put our money where our mouth is and we continue to try.   The labor force in Columbus is 100 strong and probably costs $600,000 a month so they will be kept on for some time and they may have attrition and some staff reduction.

The US government DOE or USDA can play no role and big oil will probably not step up to buy the gangrene company.   The Qataris or other petro wealthy folks may lend Khosla and Gates a hand but they are probably too scared to come in now with all the law suits.   The Chinese will not waste time on this but I may be wrong and some Chinese group comes in at low cost for the suite of patents Kior has.   A replay of AONE.

The story of Kior will be forgotten by most and Vinod Cost Us may finally become as quiet as Al Gore when it comes to matters green.  Condi will play her piano and continue to mis-educate a whole new generation at Stanford.  The Green Machine will focus on more positive developments in the world. 

Of course I could be completely wrong and the $10 million of new CAPEX and $23 million of research will turn the company around and each year 13 million gallons of diesel will be produced from the 500 tons a day of bone dry pine.  Of course for the sake of the 100 workers and the folks who bought KIOR at $15 a share at its IPO I hope I am wrong.  But I think KIOR as a stock stands for Keep It Operating Rarely.

Saturday, January 11, 2014

Fisker May Be Saved By A Whisker?

Folks this week saw an amazing series of events in the case of Fisker in the US Bankruptcy courts.

Inside EVs wrote a great article that details the events

Essentially the Chinese auto components company Wanxiang that bought A 123 (Fisker’s battery supplier) has entered the fray to gain control of Fisker with a plan to restart the Karma production and eventually produce the Atlantic at the assembly plant in Delaware.   The company Hybrid Technologies that bought the DOE loans at a severe discount and only wanted to pay a penny on the dollar to other creditors was rebuked by the bankruptcy judge who now wants to get more money for creditors via Wanxiang’s offer.    The US DOE loan is what it is and the US Taxpayers took their bath but other creditors may get more than one cent on the dollar.  The US got $25 million for $164 million invested with a loss of $139 million.

This could be better news for Delaware who would have lost essentially all of their $20 million “invested” in Fisker had the Hybrid Technologies deal sailed through bankruptcy court.   Interestingly the two feuding bidders are Chinese companies if one considers Hong Kong to be controlled by China.

My take is the whole thing was a set up.   Have the Hong Kong team wipe out Uncle Sam  and then play hard ball and then have a “white” knight come in and look good to get the other creditors a little more than one cent on the dollar.   The US Government had the trump card in the game with the secured position on the $164 million loan but quickly folded to walk away with a $139 million loss.   The Obama administration is a star at buying high and selling low (e.g. the sugar at the USDA).   The Chinese are the real capitalists and Moniz is looking more like what-me-worry each day.   This is one circus where the US is clown and the Chinese are the circus masters.  We the tax payers are the guys who clean up the ring after the circus animals do their plopping performances. 

Thursday, January 9, 2014

KIOR Gives An Update

A couple weeks after Condi Rice resigned from the board of directors of Kior and the CFO left abruptly, Kior held a conference call this morning.  I called in and listened.

In essence KIOR operated 70% of the time in the 4th quarter and could only process between 250 to 300 tons a day of wood versus nameplate capacity of 500 tons a day.   The CEO stated they yielded liquid fuels at the rate of the low thirties of gallons per ton.  The CEO mistakenly stated they only had $25,000 of cash at the end of the year and this was corrected to $25 million later in the call.

Kior is planning to do limited production in Q1 as well as most of the year and plans to spend $10 million to fix the plant.   A reporter from WCBI (CBS) in Columbus Mississippi asked if there would be layoffs and the CEO replied there would not be layoffs.     Kior talked a bunch how the government was creating uncertainty in the payment stream for their cellulosic based transport fuel.  Kior also said they had not raised new funding yet but were still working on it.   They said they will slow production in Q1 to save cash on things like natural gas. 

This got me thinking about why they would use natural gas in a plant that has so much wood.   Perhaps Kior has been faking a renewable story when as much as half of their BTUs may actually come from natural gas.   I will investigate this over the next couple of weeks.   This would not be a new trick for Vinod Cost Us as his first company Cello faked renewable fuel when the fuel was found to be fossil derived.

Kior also talked some mumbo jumbo about a new catalyst arriving in the second quarter and continuing R&D efforts of $22 million in 2014.   They will not provide guidance on expected production but did give historical production and it looks like they make a lot of heavy fuel oil besides gasoline and diesel and lose yield in gas and water streams.

My guess is they are prepping for Chapter 11, 7 or 13 in the event new funds are not received.   KIOR is trading down 11 cents at $1.64 based on the call.  The use of natural gas in some large measure in their process is very interesting.   It could be they make a bunch of heavy tarry type stuff that needs massive hydrotreating or they simply are a partial gas to liquids play and the wood was a cover story to pretend to be green.   No matter what the workers in Columbus Miss better brace for the worst.