Cash for clunkers was a bust

I have opined a few times that the cash for clunkers program that our pres and congress touted so much did nothing to save the planet. Now a large organization Edmunds has reported the very same analysis of this dumass program from DC. Here is the Edmunds report

SANTA MONICA, Calif. — October 28, 2009 — Edmunds.com, the premier resource for online automotive information, has determined that Cash for Clunkers cost taxpayers $24,000 per vehicle sold.
Nearly 690,000 vehicles were sold during the Cash for Clunkers program, officially known as CARS, but Edmunds.com analysts calculated that only 125,000 of the sales were incremental. The rest of the sales would have happened anyway, regardless of the existence of the program.
Ironically, the average transaction price for a new vehicle in August 2009 was only $26,915 minus an average cash rebate of $1,667.

"This analysis is valuable for two reasons," explained Edmunds.com CEO Jeremy Anwyl. "First, it can form the basis for a complete assessment of the program's impact and costs. Second—and more important—it can help us to understand the true state of auto sales and the economy. For example, October sales are up, but without Cash for Clunkers, sales would have been even better. This suggests that the industry's recovery is gaining momentum."
"Our research indicates that without the Cash for Clunkers program, many customers would not have traded in an old vehicle when making a new purchase," Edmunds.com Senior Analyst David Tompkins, PhD told AutoObserver.com. "That may give some credence to the environmental claims, but unfortunately the economic claims have been rendered quite weak."

To conduct the analysis, the Edmunds.com team of PhDs and statisticians examined the sales trend for luxury vehicles and others not included in Cash for Clunkers, and applied the historic relationship of those vehicles to total SAAR to make informed estimates. These estimates were independently verified through careful examination of sales patterns reflected by transaction data. Once the numbers were determined, Edmunds.com's analysts divided three billion dollars by 125,000 vehicles to arrive at the average $24,000 per vehicle.

Of course the pres the congress and their supporters are arguing that cash for clunkers was an enormous success and Edmunds was invaded by the GOP. But now the pres will give mega bucks to the smart grid for dumb Americans. How many dumasses will rid themselves of six TVs, three refrigerators, and their 2,000 watt hair dryer just because they have a smart meter that the utility company will install on their incoming electric line. Why don’t we just charge more for electricity, more for gasoline, more for natural gas and give the added money to folks who actually will help save the planet? Who are these people? They are children who need a real education and may not be as dumb as the generation of adults who bought SUVs, large houses miles from nowhere, and have to have six TVs and three refrigerators for their beer to watch TV. Let’s get real big brother does not need to watch an electric or gas meter spin, it needs more of your money. It should just admit that a $10 per million BTU energy tax is needed. We use 80 quadrillion BTUs of fossil fuel and doing the math the government can raise $800 billion a year right there to pay for real education for the future generation that will also need to be good at breathing carbon dioxide.

Congresswoman Woolsey will take my letter to her house subcommittee

Folks: I received an email Friday from my Congresswoman's chief of staff. She has extended an offer to deliver a letter from me to all house members who sit on the house science subcommittee on energy. Here is the letter I sent to my Congresswoman today:

October 10, 2009

Congresswoman Lynn Woolsey
US House of Representatives
Via Fax 707 542 2745


Re - House Science Subcommittee on Energy

Dear Congresswoman Woolsey

Thank you for granting me this opportunity to write this letter that you will forward to all the members of the House Science Subcommittee on Energy. The representatives who sit on this science subcommittee have an awesome responsibility. Our standard of living as well as our national security and well being are based on good policy coming forth from this subcommittee. Unfortunately the record on energy policy ever since the Department of Energy was created in 1977 has been dismal. Without boring you with detail I list the failures in chronological order: Coal to Liquid and Gaseous Fuel; Energy Deregulation; MTBE and Reformulated Gasoline; Cold Fusion; Hydrogen; Fuel Cells; Corn Ethanol; Clean Coal; and Cellulosic Ethanol.

A new Administration and a new Congress will now be spending even more money on the “energy problem”. Most energy technologies are Betamax technologies from a thermodynamics perspective. A little about my background and why think I can help. I graduated in 1973 with a degree in Chemical Engineering from the University of Witwatersrand in Johannesburg S. Africa. I received my MBA from the same university in 1975 and went to work on coal gasification in South Africa. I came to the USA on a fellowship from the Monsanto Corp to study for my MS in Chemical Engineering at Iowa State University and my field of graduate work was in Thermodynamics. I graduated with a MS Chemical Engineering in 1977. I worked for 12 years in cryogenics and became well versed in hydrogen. I then spent 16 years becoming an expert in microelectronics fabrication leading teams in the design of chip, LCD and nonmaterial making facilities the world over. For the past four years I have worked at Genentech and lead teams in the chemistry, manufacturing and control of biopharmaceuticals. My education and work experience is deep in the fundamental technologies that relate to energy past and present. I am not a registered Democrat yet Andrew Tobias, the Treasurer of the Democratic National Committee, has referred to me on his blog as me being “frighteningly bright”. Enough said on qualification to opine on matters before your subcommittee.

The single point I wish to communicate is that very few technologies have a “Moore’s Law” rate of learning. I had the good fortune to lead the design of Intel’s chip fabrication facilities in the Silicon Valley for six years and lived Moore’s Law. I have written and lectured extensively that fuel cells will never approach a high rate of learning and hence cost reduction. I have written and lectured that the same slow rate of learning will hold for photovoltaic cells. I have written and lectured that corn ethanol would be a bust.

I told the National Hydrogen Association meeting in 2005 that hydrogen was a great chemical and a pathetic energy carrier. At this very meeting Secretary of Energy Sam Bodman handed out $100 million to GM for their science fictional fuel cell. I was one of the few antagonists to MTBE back in 1989. I have said that cellulosic ethanol will be a bigger bust than corn ethanol. And I now say that lithium ion batteries will not become sufficiently inexpensive for the Volt to stand a chance against a Prius. Carbon sequestration will also not happen in sufficiently large measure to do much and will remain prohibitively expensive. I say to you the House Science Subcommittee on Energy that these assertions you hear that economies of scale and mass production will drive down the cost of these technologies are not realistic.

What is realistic from a thermodynamics perspective are improvements to wind farms, improvements to geothermal, improvements to solar thermal, improvements to nuclear power generation, improvements to pumped hydro and compressed air energy storage. Certainly improvements in the rate at which we consume energy can and should be made. I also have prognosticated that is possible from a thermodynamic point of view to develop gasoline engines that operate at the same high compression ratio and in the same un-throttled mode as diesel engines. Running all engines in a mode that mimic diesel engines will yield massive improvements in fuel economy. Simply promoting the use of diesel for private vehicles will also make a big difference in fuel consumption.

You may ask why did computer chips and LCD screens enjoy a rapid learning rate and why won’t these other technologies improve in likewise manner? I would like the opportunity to address that fundamental question by detailed explanation of Thermodynamics, Learning Rates, System Fabrication, Reaction Kinetics, and Resource Limitations. This of course cannot be accomplished in a simple introductory letter. I remind you all of a sign that hanged in Albert Einstein’s office in Princeton. The sign read “Not everything that counts can be counted, and not everything that can be counted counts “. Likewise the laws of thermodynamics will prove that hope is not a strategy for a realistic energy policy and if what we do is going to count let’s allow the laws of thermodynamics to take precedence over our man made laws.

Sincerely,


Lindsay Leveen

Can Lithium batteries solve our oil addiction?

I have thought long and hard and read all I can on whether there will be cheaper lithium batteries in five years that make plug in cars affordable. Alas my friends the lithium plug in hybrid or all electric plug in is another thermodynamic dead end. A company A 123 went public this week and their stock soared. Their hype is that they will make affordable lithium batteries for vehicles. If I was a stock analyst and I am not I would say short this stock. They will short circuit and be a goner in a few years. This is not about Google or a wonder drug company this all about electrochemistry and thermodynamics and the truth is one needs a certain mass of electrolyte, anodes, cathodes, spacers, housing , wiring etc. to get a certain amount of stored energy. My research shows that the raw materials make up 75% to 80% of the total cost of the lithium battery. The materials will actually have inflationary pressure on their prices and if anything 80% of the battery cost will trend upward. The other 20% that is labor, capital, and non raw material inputs may experience a learning rate and economies of scale may lessen this small fraction of the total battery cost, however the raw material costs are just too large a fraction of total cost to allow a learning curve.

Technological novices will argue that alternate cheaper materials will be found and that there will be a way of reducing the quantity of raw materials. I argue that we have found the least expensive materials that actually work electrochemically and that less materials just means less power stored in the battery. Last week A123 put a Google ad on my site. I have no control over who advertises. A 123 has this battery pack as an after market add on for a standard Prius to make it plug in and capable of going 15 miles on the battery. I called the company and got the following information. The battery is a 5 kilowatt hour battery. It costs $11,000 and if I drove 12,000 miles a year with their system I would save approximately 180 gallons a year of gasoline compared with the base Prius. OK I will need to pay the electric company something like $200 per year for the electricity and I save $540 a year in gasoline at $3 per gallon. So my net savings are $340 a year. I need more than 30 years to pay for the batteries. But the story gets worse the batteries are only good for a maximum of 8 years. So every 8 years I pay $11,000 to get back $2,720. I think A123 should change their name to the Made Off Battery Company.

I have been trying for four months to see my congresswoman Lynn Woolsey, the ranking democrat on the house sub-committee on energy technology. I have been blocked and stonewalled by her staffers. Just today I wrote to the Committee Against Government Waste http://www.cagw.org/ as their head had commented on the waste of tax payer dollars money that the Feds just gave to Fisker a plug in hybrid company funded by Alfalfa Gore and his VC group. Here is a copy of my email to CAGW:

I am outraged by the waste of tax payers’ dollars on plug in vehicles. I am a chemical engineer and a pretty well known expert in thermodynamics. I blog at http://www.greenexplored.com/ The Lithium plug in will be as big a waste as Fuel Cells, ethanol and bio-diesel. I am convinced that batteries will cost more not less in ten years. These proofs of concept are just pure ways of giving money away. Lithium Ion batteries are expensive because the raw materials are expensive. Raw materials account for 80% of the cost and the other 20% may have some economies of scale but the inflation in raw material costs will simply overwhelm the decrease in costs from economies of scale. The plug in electric vehicles or hybrids are a betamax technology. Great play things for a few rich folks. We need many diesel vehicles, we need many basic hybrids with small batteries, we need an energy policy based on the laws of thermodynamics not the laws of the Washington pig farm. I think I can help you with the supporting science, engineering, thermodynamics and get our voice out there. For four months I have been asking for an audience with my congresswoman. One Lynn Woolsey who is the ranking democrat on the house sub-committee for energy technology. I have been given the run around. No doubt because she has to follow her party and follow her guru one Alfalfa Gore. please go to http://www.greenexplored.com/ and then let's chat. I have no commercial interest in any technology, business, or organization involved in energy. I only care about the country and the planet. Lindsay Leveen The Green Machine

Can the US lower carbon emissions by 17% by 2020?

The House of Representatives narrowly passed a bill to drive the US economy toward a less carbon intensive future. President Obama is pushing the Senate to likewise pass this bill that he would like to sign into law soon. The bill intends to cut US carbon emission by 17% in 2020 compared with a base year of 2005. The part of the bill that may actually accomplish its intended target is the part that steers Americans toward smaller and lighter personal vehicles. Consumers may actually save money in buying smaller cars as their first cost and ongoing operating costs are certainly lower than larger vehicles. The part of the bill that is real tricky is in electric power generation where incentives will be given to operate geothermal, wind, PV, solar thermal, biomass, and nuclear power stations and taxes will be imposed on coal, natural gas, and hydrocarbon liquid fired stations.

The least costly methods for power generation are coal and natural gas and the most costly is PV. The office of management and budget has estimated that the average consumer will pay approximately $100 extra per year for their energy as a result of this bill. I have no real data that confirms this. PV electricity is much more expensive to generate than natural gas and it is also intermittent. The power grid will need additional transmission lines and point of use energy storage to overcome the interruptible nature of PV or even wind. Nuclear, geothermal and biomass are base-load generators that can operate 24 by 7. The wildcard in all of this is whether plug in hybrid or pure plug in vehicles will be deployed on a large scale in the next decade. This hinges on the cost of lithium batteries and a good deal of government money is being thrown at this area.

My chemical engineering experience leads me to believe that the cost improvement in lithium ion batteries a decade from now will be moderate and nowhere near the rate of cost improvement in devices such as semiconductors or LCD TVs. Unfortunately a fractional Moore’s Law will hold for lithium batteries. The underlying limitation to the learning curve is that the electrochemistry requires a certain mass of anode, cathode, and electrolyte to store a certain quantity of energy and deliver a certain instantaneous amount of power. My prognostication is that ten years from now the cost of a lithium ion battery system will drop from approximately $900 per kilowatt hour of storage to approximately $650 per kilowatt hour of storage.

The Tesla Roadster has some 55 kilowatt hours of battery storage, the Prius only has 1.5 kilowatt hours of storage as the Prius is primarily powered by its gasoline engine. The Volt plug in hybrid GM is proposing has approximately 16 kilowatt hours of battery storage. Because of the high cost of the batteries my forecast is that plug in hybrids that are capable of 40 miles of electric travel will still be too expensive in ten years from now to capture more than a very small share of the market. Traditional hybrids will capture a third of the market in a decade and small lighter cars will also capture a similar fraction. Bigger cars will still be common with a similar market share to traditional hybrids. A plug in hybrid that goes 8 to 10 miles may be more commercially successful than the targeted 40 mile range battery intensive vehicle. If we do have plug in hybrids with 3 or 4 kilowatt hours of onboard batteries then it is quite plausible that one would recharge at night at home and the operating cost for the 10 miles that one would travel on the batteries will be perhaps 25 cents. If there are five million of these vehicles perhaps some 20 million kilowatt hours of night time power can be stored. Let’s assume the nightly charging last 8 hours, this means some 2.5 million kilowatts or some 2,500 megawatts of power generation capacity will be needed. This is a miniscule fraction of the approximately 800,000 megawatts of power generation that are in place presently in the USA.

The success of the whole plug in program hinges on the lightest metal in the periodic table and this is Li, which are incidentally the first two letters in my name. I wish I could help the planet by inventing a new less expensive material called Lindsayium but alas this is not possible and my suggestion to help meet the 17% reduction goal is to walk, bike, carpool or take the bus.

Can the US bust its gasoline addiction?

I did not have time for a blog but this comes to you from the US Department of Energy

President Obama Announces a Comprehensive National Fuel Economy Policy


President Obama acknowledged Alan Mulally, the chief executive officer of Ford Motor Company, while announcing the new auto policy. Nine other auto executives, the president of the United Auto Workers, and three administration officials joined the president for the announcement. Enlarge this photo. Credit: Samantha Appleton, White House
President Barack Obama announced a new national policy on Tuesday that will increase the fuel economy and reduce the greenhouse gas (GHG) emissions of all new cars and trucks sold in the United States. The policy includes proposed new fuel economy standards will cover model years 2012-2016, achieving an average fuel economy of 35.5 miles per gallon (mpg) for model year 2016. That exceeds the requirements of the Energy Independence and Security Act of 2007, which required an average fuel economy of 35 mpg by model year 2020. The standards will also reduce carbon dioxide emissions from new vehicles by 30% by 2016. Over the lifetime of these new vehicles, they will save an estimated 1.8 billion barrels of oil and will avoid the emission of 900 million metric tons of carbon dioxide. Cars and light trucks cause 17% of the carbon dioxide emissions in the United States.
The groundbreaking policy represents an unprecedented collaboration among the U.S. Department of Transportation (DOT), the U.S. Environmental Protection Agency (EPA), 10 of the world's largest auto manufacturers, the United Auto Workers (UAW), leaders in the environmental community, the State of California, and other state governments. Because the policy combines fuel economy regulations with GHG regulations for vehicles, it addresses the EPA's need to set GHG regulations for vehicles while also addressing California's request to set its own GHG regulations. Thirteen other states and the District of Columbia had planned to adopt California's GHG regulations. Meanwhile, 10 major car companies and the UAW have embraced the national program because it provides certainty and predictability to 2016 and includes flexibilities that will significantly reduce the cost of compliance.
To put the new policy in place, the EPA and DOT intend to initiate a joint rulemaking for new vehicle standards. The proposed standards are expected to be divided into categories of vehicles, based on the size of the vehicles, and they are expected to include a variety of measures to allow flexibility in meeting the standards, including credits earned for actions such as implementing advanced air conditioning technologies and using additional technologies that reduce carbon dioxide emissions. Such credits would be tradable among the auto manufacturers. See the White House press release and fact sheet

Does the US department of entropy really care?

A weekly newsletter from the U.S. Department of Energy's (DOE) Office of Energy Efficiency and Renewable Energy (EERE). The EERE Network News is also available on the Web at: www.eere.energy.gov/news/enn.cfm
February 18, 2009
News and Events
Economic Stimulus Act Provides $16.8 Billion for EERE Programs
Renewable Energy and Smart Grids Spurred by Economic Stimulus Act
Economic Stimulus Act to Result in Greener Federal Buildings and Fleets
High-Speed Rail and Transit Boosted by Economic Stimulus Act
Economic Stimulus Act Extends Renewable Energy Tax Credits
Stimulus Act Expands Clean Energy Tax Credits for Homes and Businesses
Clean Energy Bonds Expanded by the Economic Stimulus Act
News and Events
Economic Stimulus Act Provides $16.8 Billion for EERE Programs


President Barack Obama signed the American Recovery and Reinvestment Act of 2009 on Tuesday. Credit: Pete Souza, White House
President Barack Obama signed the American Recovery and Reinvestment Act of 2009 yesterday, and the measure includes $16.8 billion for the DOE Office of Energy Efficiency and Renewable Energy (EERE). The funding is a nearly tenfold increase for EERE, which received $1.7 billion in fiscal year 2008. While the bulk of the new EERE funding is supporting direct grants and rebates, $2.5 billion will support EERE's applied research, development, and deployment activities, including $800 million for the Biomass Program, $400 million for the Geothermal Technologies Program, and $50 million for efforts to increase the energy efficiency of information and communications technologies. An additional $400 million will support efforts to add electric technologies to vehicles. And separate from the EERE budget, $400 million will support the establishment of the Advanced Research Projects Agency—Energy (ARPA-E), an agency to support innovative energy research, modeled after the Defense Advanced Research Projects Agency (DARPA). See the White House announcement and pages 58-60 and 63 of the American Recovery and Reinvestment Act of 2009 (PDF 13.4 MB), as well as pages 24-26 of the accompanying joint explanatory statement of the conference committee (PDF 10.3 MB). Download Adobe Reader.
The economic stimulus act also stipulates that $5 billion will go towards the Weatherization Assistance Program, and the act also increases the eligible income level under the program, increases the funding assistance level to $6,500 per home, and allows new weatherization assistance for homes that were weatherized as recently as 1994. A complementary measure in the act provides $4 billion to the Department of Housing and Urban Development (HUD) to rehabilitate and retrofit public housing, including increasing the energy efficiency of units, plus an additional $510 million to do the same for homes maintained by Native American housing programs. HUD will receive an additional $250 million to increase the energy efficiency of HUD-sponsored, low-income housing. See pages 59, 79, 254-261, and 275-278 of the act, as well as pages 24, 28, 84, and 86-87 of the accompanying joint explanatory statement of the conference committee.
The act also directs $2 billion in EERE funds toward grants for the manufacturing of advanced battery systems and components within the United States, as well as the development of supporting software. The battery grants will support advanced lithium-ion batteries and hybrid electric systems. Another $300 million will support an Alternative Fueled Vehicles Pilot Grant Program, and an additional $300 million will support rebates for energy efficient appliances, while also supporting DOE's efforts under the Energy Star Program. The act also stipulates that $3.2 billion will go toward Energy Efficiency and Conservation Block Grants, which were established in the Energy Independence and Security Act of 2007, but were not previously funded. The grants will go toward states, local governments, and tribal governments to support the development of energy efficiency and conservation strategies and programs, including energy audit programs and projects to install fuel cells and solar, wind, and biomass power projects at government buildings. For background on the program, see pages 176-183 of the Energy Independence and Security Act of 2007 (PDF 821 KB).
The act also stipulates that $3.1 billion of EERE funds will go toward the State Energy Program for additional grants that don't need to be matched with state funds, but the act only allows such grants for states that intend to adopt strict building energy codes and intend to provide utility incentives for energy efficiency measures. To help states implement the measures, a separate portion of the act allocates $500 million to the Department of Labor to prepare workers for careers in energy efficiency and renewable energy. See pages 59, 81-85, and 147-148 of the act, as well as pages 24, 28, and 51 of the accompanying joint explanatory statement of the conference committee.
Renewable Energy and Smart Grids Spurred by Economic Stimulus Act
The American Recovery and Reinvestment Act of 2009 includes $6 billion to support loan guarantees for renewable energy and electric transmission technologies. The funds are expected to guarantee more than $60 billion in loans. The act requires the DOE Loan Guarantee Program to only make loan guarantees to projects that will start construction by September 30, 2011, and that involve renewable energy, electric transmission, or leading-edge biofuel technologies. See pages 63 and 76-78 of the American Recovery and Reinvestment Act of 2009 (PDF 13.4 MB), as well as pages 26-27 of the accompanying joint explanatory statement of the conference committee (PDF 10.3 MB). Download Adobe Reader.
The act also directs DOE to analyze the nation's electrical grid to determine if significant potential sources of renewable energy are locked out of the electrical market by a lack of adequate transmission capacity. DOE must then provide recommendations for achieving adequate transmission capacity. To help achieve those recommendations, the act includes a provision allowing the Western Area Power Administration to borrow up to $3.25 billion from the U.S. Treasury for transmission system upgrades, particularly for facilitating the delivery of power from renewable energy facilities. See pages 65-71 and 80-81 of the act and page 28 of the joint explanatory statement of the conference committee.
In addition, the act provides $4.5 billion for the DOE Office of Electricity Delivery and Energy Reliability for activities to modernize the nation's electrical grid, integrate demand-response equipment, and analyze, develop, and implement smart grid technologies. The funds will also support research in energy storage technologies, efforts to facilitate recovery from energy supply disruptions, and efforts to enhance the security and reliability of the nation's energy infrastructure. A complementary section of the act opens smart grid demonstration projects to electric systems in all areas of the country and establishes a smart grid information clearinghouse to share data from the demonstration projects. See pages 60-62 and 72-76 of the act, as well as pages 25 and 28 of the accompanying joint explanatory statement of the conference committee.
Economic Stimulus Act to Result in Greener Federal Buildings and Fleets
Federal buildings and fleets will become greener under a measure of the American Recovery and Reinvestment Act of 2009. The act provides $4.5 billion to the U.S. General Services Administration (GSA) to convert federal buildings into high-performance green buildings, which generally combine energy efficiency and renewable energy production to minimize the energy use of the buildings. The act also directs $4 million toward the establishment of an Office of Federal High-Performance Green Buildings within the GSA. In addition, the act provides $100 million for the Energy Conservation Investment Program within the Department of Defense, as well as another $100 million for energy conservation and alternative energy projects at facilities of the U.S. Navy and U.S. Marine Corps.
For federal vehicle fleets, the act provides $300 million to cover the costs of acquiring greener motor vehicles, including hybrids, electric vehicles, and plug-in hybrid vehicles, once they become commercially available. Buying plug-in hybrids will be an iffy proposition, however, as the funds must be spent by September 30, 2011. See pages 88-91 and 195-197 of the American Recovery and Reinvestment Act of 2009 (PDF 13.4 MB), as well as pages 30-31 and 73 of the accompanying joint explanatory statement of the conference committee (PDF 10.3 MB). Download Adobe Reader.
High-Speed Rail and Transit Boosted by Economic Stimulus Act
High-speed rail corridors and intercity passenger rail service will gain significant new funding under a measure of the American Recovery and Reinvestment Act of 2009. The act provides $8 billion for the Federal Railroad Administration to provide capital assistance to such rail projects, placing priority on projects that support intercity high-speed rail service. The act also provides $1.3 billion to the National Railroad Passenger Corporation, better known as Amtrak, with the majority of funds going toward the repair, rehabilitation, or upgrade of passenger rail assets or infrastructure, and for capital projects that expand passenger rail capacity.
Transit in general gains significantly under the economic stimulus act, which allocates $6.9 billion to the Federal Transit Administration for capital assistance grants. The act directs $100 million of those funds to help public transit agencies reduce their energy consumption and their greenhouse gas emissions, with priority given to those projects that save the most energy. An additional $750 million is provided by the act to support infrastructure investments in "fixed guideway" systems. A fixed guideway refers to any transit service that uses exclusive or controlled rights-of-way or rails, entirely or in part, running the gamut from heavy rail to high-occupancy vehicle lanes. Another $750 million is available for grants to "New Starts" and "Small Starts" projects, which include fixed guideway systems, system extensions, and bus corridor improvements. The act also provides $1.5 billion in supplemental discretionary grants for capital investments in surface transportation infrastructure, which could include transit systems. See pages 226-229 and 237-247 of the American Recovery and Reinvestment Act of 2009 (PDF 13.4 MB), as well as pages 80 and 82-83 of the accompanying joint explanatory statement of the conference committee (PDF 10.3 MB). Download Adobe Reader.
Economic Stimulus Act Extends Renewable Energy Tax Credits
The tax section of the American Recovery and Reinvestment Act of 2009 provides a three-year extension of the production tax credit (PTC) for most renewable energy facilities, while offering expansions on and alternatives for tax credits on renewable energy systems. The extension keeps the wind energy PTC in effect through 2012, while keeping the PTC alive for municipal solid waste, qualified hydropower, and biomass and geothermal energy facilities through 2013. In addition, a two-year extension of the PTC for marine and hydrokinetic renewable energy systems will keep that tax credit in effect through 2013. The PTC provides a credit for every kilowatt-hour produced at new qualified facilities during the first 10 years of operation, provided the facilities are placed in service before the tax credit's expiration date. For 2008, biomass facilities fueled with dedicated energy crops ("closed-loop biomass"), as well as wind, solar, and geothermal energy facilities earned 2.1 cents per kilowatt-hour, while other qualified facilities earned 1 cent per kilowatt-hour. See pages 33-34 of the American Recovery and Reinvestment Tax Act of 2009 (PDF 5.9 MB), as well as PDF pages 105-112 (labeled as pages 103-110) of the accompanying joint explanatory statement of the conference committee (PDF 24.9 MB). Download Adobe Reader.
Unfortunately, the current slump in business activity means that fewer businesses are seeking tax credits, which means that renewable energy producers are having trouble taking advantage of the PTC. With that in mind, the act also allows owners of non-solar renewable energy facilities to make an irrevocable election to earn a 30% investment credit rather than the PTC. The option remains in effect for the current period of the PTC, that is, through 2012 for wind energy facilities and through 2013 for other qualified renewable energy facilities. See pages 34-36 of the American Recovery and Reinvestment Tax Act of 2009, as well as PDF pages 112-113 of the joint explanatory statement of the conference committee.
Alternately, the facility owner could choose to receive a grant equal to 30% of the tax basis (that is, the reportable business investment) for the facility, so long as the facility is depreciable or amortizable. The grants are also available for renewable energy facilities that would normally earn a business energy credit of 10%-30%, including systems using fuel cells, solar energy, small wind turbines, geothermal energy, microturbines, and combined heat and power (CHP) technologies. To earn a grant, the facility must be placed in service in 2009 or 2010, or construction must begin in either of those years and must be completed prior to the termination of the PTC. For facilities that would normally earn a business tax credit, construction must be completed prior to 2017. The grants will be paid directly from the U.S. Treasury. A separate measure in the act removes limitations on the business credit based on how the systems are financed and also removes a business credit limit on small wind energy systems. See pages 36-39 and 153-158 of the American Recovery and Reinvestment Tax Act of 2009, as well as PDF pages 113-117 of the joint explanatory statement of the conference committee.
Stimulus Act Expands Clean Energy Tax Credits for Homes and Businesses
The American Recovery and Reinvestment Act of 2009 provides greater tax credits for clean energy projects at homes and businesses and for the manufacturers of clean energy technologies. For homeowners, the act increases a 10% tax credit for energy efficiency improvements to a 30% tax credit, eliminates caps for specific improvements (such as windows and furnaces), and instead establishes an aggregate cap of $1,500 for all improvements placed in service in 2009 and 2010 (except biomass systems, which must be placed in service after the act is enacted). The act also tightens the energy efficiency requirements to meet current standards. For residential renewable energy systems, the act removes all caps on the tax credits, which equal 30% of the cost of qualified solar energy systems, geothermal heat pumps, small wind turbines, and fuel cell systems. The act also eliminates a reduction in credits for installations with subsidized financing. See pages 41-47 of the American Recovery and Reinvestment Tax Act of 2009 (PDF 5.9 MB), as well as PDF pages 125-129 (labeled as pages 123-127) of the accompanying joint explanatory statement of the conference committee (PDF 24.9 MB) Download Adobe Reader.
For businesses and individuals buying electric vehicles, the act simplifies and expands the available tax credits. For electric low-speed vehicles, motorcycles, and three-wheeled vehicles, a 10% tax credit is available through 2011, with a cap of $2,500. For vehicles converted into qualified plug-in electric vehicles, a 10% tax credit is also available through 2011, with a cap of $4,000. And starting in 2010, full-scale commercial plug-in electric vehicles can earn a maximum tax credit of $7,500, depending on their battery capacity. The credit will phase out over a year for each manufacturer after they sell 200,000 plug-in vehicles. See pages 50-68 of the act, as well as PDF pages 138-141 of the joint explanatory statement of the conference committee.
The act also provides a bonus to homeowners or business owners installing clean fuel refueling systems at their homes or businesses. For businesses, the maximum credit for installing such refueling systems increases to $50,000 for most systems, up from $30,000, and it increases to $200,000 for hydrogen refueling stations. For homeowners, the credit is doubled from $1,000 to $2,000. Homeowners might install their own natural gas refueling system for a natural gas vehicle, or they might install recharging systems for plug-in electric vehicles. The credit is available through 2010 for most refueling systems and through 2014 for hydrogen refueling systems. See pages 47-48 of the act, as well as PDF pages 130-131 of the joint explanatory statement of the conference committee.
The economic stimulus act has also added a new tax credit to encourage investment in the manufacturing facilities that help make such clean energy projects possible. A new 30% investment tax credit is available for projects that establish, re-equip, or expand manufacturing facilities for fuel cells, microturbines, renewable fuel refineries and blending facilities, energy saving technologies, smart grid technologies, and solar, wind, and geothermal technologies. The credit also applies to the manufacture of plug-in electric vehicles and their electric components, such as battery packs, electric motors, generators, and power control units. The credit may also be expanded in the future to include other energy technologies that reduce greenhouse gas emissions. The Secretary of Treasury must establish a certification program within the next 180 days and may allocate up to $2.3 billion in tax credits. See pages 101-110 of the act, as well as PDF pages 142-144 of the joint explanatory statement of the conference committee.
Clean Energy Bonds Expanded by the Economic Stimulus Act
Two bonding mechanisms for financing renewable energy and energy efficiency systems have been expanded under the tax section of the American Recovery and Reinvestment Act of 2009. The act authorizes the allocation of as much as $1.6 billion in new Clean Renewable Energy Bonds (CREBs), which are tax credit bonds for financing renewable energy projects. CREBs were previously limited to a maximum of $800 million. The act also authorizes the allocation of $2.4 billion in qualified energy conservation bonds, up from the current limit of $800 million. These tax credit bonds are allocated to states and large local governments to finance a variety of clean energy projects.
Unlike normal bonds that pay interest, tax credit bonds pay the bondholders by providing a credit against their federal income tax. In effect, the new tax credit bonds will provide interest-free financing for clean energy projects. But because the federal government essentially pays the interest via tax credits, the U.S. Internal Revenue Service must allocate such credits in advance. However, tax credit bonds require the investment of a bondholder that will benefit from the federal tax credits, and those investors may be hard to find during the current business downturn. To try to draw more investment, a separate measure in the tax bill will allow regulated investment companies to pass through to their shareholders the tax credits earned by such bonds. Yet another measure adds a prevailing wage requirement to projects financed with CREBs or energy conservation bonds. See pages 39-41 and 143-149 of the American Recovery and Reinvestment Tax Act of 2009 (PDF 5.9 MB), as well as PDF pages 100-101, 118-123, and 148 of the accompanying joint explanatory statement of the conference committee (PDF 24.9 MB). Download Adobe Reader.
This newsletter is funded by DOE's Office of Energy Efficiency and Renewable Energy (EERE) and is also available on the EERE Web site. If you have questions or comments about this newsletter, please contact the editor, Kevin Eber.
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Can nukes save us?

The people have spoken and we have a new government. A new government means a new energy policy. President Elect Obama is less warm to nuclear power than was John McCain. Therefore it is doubtful we will build scores of thermonuclear power plants in the next decade. The new administration has two very important appointments to make. These are the Secretary of the Treasury and the Secretary of Energy. I believe energy policy will either support or break our economy and that the secretary of energy will be possibly the single most important appointment that the new President will make.

Barak Obama has committed to increasing funding for alternative energy and has pledged to wean the country off of oil imports from unfriendly countries. This is all election talk and now the real work has to begin. Bio-ethanol is a bust and just this week Verasun, a NYSE traded ethanol company, entered into Chapter 11 of the thermodynamics text book. Many of the other ethanol producers are teetering on bankruptcy and only survive on government subsidies and high tariffs on Brazilian ethanol imports. Had the present Secretary of Energy Dr Sam Bodman heeded my sage advice that Mother Nature did not intend photosynthesis to propel 250 million vehicles in the good old USA we may have embarked on a real and appropriate energy policy a while back and not have to have endured the disaster we are experiencing.

Ethanol, whether corn based, cane based or somehow miraculously cellulose based is a dead end and not the solution to our energy needs. The government should focus on rebuilding a new “Detroit” with auto companies engineering, producing and selling efficient smaller vehicles that are also profitable for the manufacturer. A good way to help kick start this would be for the Feds to provide a $3,000 subsidy to the automakers for each vehicle they produce and sell that achieves more than 35 mpg. The subsidy could be a direct grant or a subsidy toward the pension and medical expenses these companies are liable to their workers by contract. The foreign automakers rely on their governments for national healthcare for their workers, and US automakers suffer a significant cost disadvantage.

My one concern is that the UC Berkeley based academics led by one Prof Kammen are the President Elect’s energy policy gurus. These misguided academics have been on the wrong side of the argument in many instances and in particular on ethanol and hydrogen. Their academic publications have erroneous and often non-thermodynamic claims of how ethanol and hydrogen were the saviours. They have already caused much more harm than good and much money, time and human effort has been expended on these dead ends.

I do feel confident that there has been a sea change in our fellow Americans attitude toward energy and the environment, and that we will not return to the misguided belief that there are inexhaustible and abundant energy and natural resources to drive around in behemoth SUVs. I do hope that we can succeed in mass production of lithium battery systems for hybrids and plug in hybrids and by the end of President Obama’s first term, and that we have a couple of vibrant US based auto companies who can compete on the world stage. As for the Secretary of the Treasury, that person will have to understand the color green as it relates to money.

Thank Gore It's Wednesday

Thank Gore It’s Wednesday

Yes our old friend has raised his head out of the alfalfa patch and has provided his green vision of the energy policy that our next president and congress should adopt. Is it realistic to think we can replace all of our electric power generation with renewable energy within a decade? The department of energy reported that the US used 4.065 billion megawatt hours of electricity in 2006. The peak installed capacity is approximately 906,155 megawatts. Dividing the 4.065 billion megawatt hours by 8760 hours in a year the average load is some 464,041 megawatts or some 48.2% of peak power.

The following are the fractions of the electricity generated in 2006 by the various sources of fuel: Coal 49.0%; Petroleum 1.6%; Nuclear 19.4%; Natural Gas 20.0%; Other Gases 0.7%; Hydroelectric 7.0%; and Other Renewable 2.4%. Hence 73% of all electric power generated in 2006 had associated carbon emissions as the fuel contained carbon. Coal and nuclear are baseload plants which means they run all the time. Replacing coal fired power generation station with renewable sources such as wind or solar cannot be done simply by replacing one megawatt of coal capacity with one megawatt of wind capacity, as the wind is intermittent and is at best available one quarter of the hours in every year. Therefore we will have to have massive energy storage capability to remove the=2 0baseload coal fired plants.

Assuming we can install wind turbines for a cost of $2,000,000 per megawatt, if one does all the tedious mathematics to replace the 73 % of the US generation capacity that is carbon based with wind power would cost. $1.32 trillion. However we would need twice as much wind generation facilities to replace baseload carbon fired plants and the cost of the wind generators will equal $2.64 trillion. To store the wind energy so it can be dispatched when it is needed will cost a similar amount, so we are talking about an investment of $5.28 trillion before we add in the cost of the transmission lines that are needed. Let’s assume the transmission system together with the controls needed for dispatching all this wind generated energy cost $0.72 trillion we have a cool $6 trillion needed to be spent over the next decade. This would be significantly higher if PV cells were used instead of wind turbines. Therefore using a mix of wind and PV as well as tidal, r un of the river, solar thermal, and geothermal we may need to invest $10 trillion for the carbon free electric generation replacement system.

We import a total of 12 million barrels a day of crude oil and refined petroleum that costs us $130 per barrel or approximately $570 billion per year. Assuming the world has a savings rate and banking system to allow the US to divert $10 trillion of investment into the alternate electric energy sector, this investment without interest or profit equals 17.5 years of oil imports at present rates and present prices. As I am neither a magician nor the chief economic advisor of the next president, I cannot forecast the price of oil or the level of imports over the next two decades. However, I do believe that the level of imports will drop and the price of oil is presently unaffordable and possibly unsustainable. This being said it will take 20 years or more to recoup the dollars we ship overseas for oil for the total replacement of carbon based electric power generation.

It is not completely infeasible that the system could be replaced, but it will simply place a major economic burden and will also substantially increase the cost of electricity to the consumer. My vote goes to the proposition to replace one quarter of the carbon fired power generation with renewables, as well as reducing our electricity consumption by a total of 10% in ten years time through demand side management and deployment of more efficient technologies. We certainly should spend a couple of trillion dollars over the next decade on alternative energy. This amount matches the total of the lowered home values and subprime mortgages losses we are experiencing and it is not going to divert all of global savings and investment to renewable energy but will leave some money for, social security, schools, hospitals, high-tech, biotech and of course old Al who makes millions on his speaking engagements that he flies to in his private jet.

Thank Government

Green Machine

Thank Government It’s Wednesday

Today my column gives a tongue in cheek thanks to the governments of the G8 countries as well as those of India, China and Korea. Yes, these eleven countries met in Japan to discuss the greening of their economies that account for two thirds of global oil consumption. For the very first time we did not hear a communiqué that sprouted the hope of hydrogen or bio-fuels, but rather stated the path forward is via conservation. http://www.managenergy.net/products/R2251.htm Hallelujah, this is precisely what I have said for the past decade much to the dismay of the UC Berkeley gangrenous crowd who are all aboard the five hundred million dollar British Petroleum gravy train of bio-fuels.

The good news is that the ministers of energy of the world’s leading economies will now form an International Partnership for Energy Efficiency Cooperation (IPEEC) that will meet and share best practices and technologies for minimizing energy use while keeping healthy economic growth. There is no doubt in my mind that Japan should chair this partnership as Japan is a shining example of thermodynamic efficiency while the good old USA is the laggard in the group. Sadly our energy secretary, Dr. Sam Bodman, should have been the star of the show given he has a ScD in Chemical Engineering and also taught this subject at MIT early on his career. Sam was a reluctant participant in the new drive for conservation. He would have preferred the old method of greenwashing over the subject and pretending photosynthesis or the lightest element would rush to the rescue of the faltering big three. Sam finally got it that we have an energy supply problem and the solution is right there in his conservative roots. Yes the words conservative and conservation are related. http://en.wikipedia.org/wiki/Samuel_Bodman

Let’s not let the liberals off the hook either. Their nonsensical energy policies will also lead us down the yellow brick road. Enough of pointing blame at politicians, it is we who have to change our lifestyles to lower energy consumption. The first changes we need to make are changing deep rooted habits. Driving less, walking more, taking the bus or ferry, turning down the heat, combining clothes washing loads, hanging the clothes out to dry, and running full dishwasher loads are simple ways to save energy in the short term. It is very interesting that a new dish washer uses one sixth the amount of water compared with hand washing the dishes. As most of the water is warm, washing dishes by hand also uses more energy. Hanging washing out to dry though is a great green idea, and we could partially irrigate our green lawns with the water dripping of the clothes and linens. http://www.newscientist.com/blog/environment/2007/08/freds-footprint-green-laundry.html

My suggestion is that neighbors offer each other a ride on the weekend to jointly do their grocery shopping. Also join a carpool or take public transportation. Longer term we need to buy smaller more efficient vehicles and retool our houses with more efficient insulation, windows, appliances, furnaces, water heaters, and government forbid air conditioners to cope with global warming.

Thank Government

Green Thursday TGIT Thank Government It's Thursday

Today we thank the government because they have finally smelled the roses and agree there is global warming. Yes the President was smelling the blooms in the Rose garden today when he acknowledged that the US will need to curb greenhouse gas emissions by 2025 in order to save the world. http://news.yahoo.com/s/ap/20080416/ap_on_go_pr_wh/bush_climate

Yes the leader of the free world, with the legacy of no other commander in chief, wants to curb CO2 emissions in the year he will turn 80. Hello Houston we have a problem and we need to address it now! Dubya smelled the roses but it is now reported that bees and other pollinators cannot smell the sweet aroma of roses because of ozone pollution. It turns out that the aromatic chemicals in roses are now being oxidized by ozone pollution that primarily comes for vehicles. http://www.foxnews.com/story/0,2933,350968,00.html

So what do we do about ozone pollution near the ground. Well Volvo and Engelhardt had an idea that is now used on some of Volvo's vehicles. They applied a ozone depleting catalyst on the radiators of their vehicles and as the air passes through the radiator the catalyst converts ozone into oxygen. http://www.patentstorm.us/patents/6190627-description.html

My friend Paul in Australia alerted me to a new engine technology that promises to be almost 30% more efficient. Using very smart microelectronic controllers the engine can be rapidly switched from four stroke cycle to two stroke cycle allowing a smaller and lighter engine to have the power of a far larger engine. This out of the cylinder thinking is what is needed. http://puregreencars.com/Green-Cars-News/Technology/Ricardo-Prototype-

Now that we have our good news story we have to return to sad state of affairs caused by the completely misguided policy of bio-fuels. Food prices are up in the USA but at least we have food http://biz.yahoo.com/ap/080414/inflation_squeeze.html

Poorer countries in Asia and Africa have food shortages and people are starving thanks to the Department Of Entropy's misguided policy. This week I award the Gangrene Award for the dumbest energy idea to our Secretary of Entropy - Sam Bodman. Regimes around the world could be toppled much like the royalty in France in the late eighteenth century. Yosemite Sam was quoted as saying to the masses "if you have no corn for bread just eat rum cake with your bio ethanol"

http://news.yahoo.com/s/time/20080414/wl_time/howhungercouldtoppleregimes

Unfortunately most of this week's Green Thursday is pretty depressing news so I will leave you with the word's of a great president who also had to deal with troubled times. When JFK had to remind folks of the need for commitment to solve pressing problems he did not fumble for words in the Rose Garden, instead he said these remarkable words:
"There are risks and costs to a program of action. But they are far less than the long-range risks and costs of comfortable inaction." - -- John F. Kennedy


Could someone please convey the message to our leaders that the long range risks and costs of an overheated earth without food is pretty important and worth action now.

Government Interest in Thermo

Green Thursday – TGIT - Thank Government It’s Thursday

Yeah today with tongue in cheek we thank our Government for their new found interest in Thermo. Today the Senate will not take up a vote on the energy bill as it stands with added taxes on oil companies. The end to the filibuster was one vote short http://www.cnn.com/2007/POLITICS/12/13/congress.energy.ap/index.html

The thermodynamic genii will take up the vote minus the added taxes provision. Hopefully the part on increased efficiency in energy use will remain intact.

While Congress was debating our energy future a global meeting was held in Bali and the US remained the sole holdout on the Kyoto Protocol http://news.yahoo.com/s/ap/20071206/ap_on_re_as/bali_us_under_siege

I had suggested the Gangrene Award for politicians and celebrities who pretend to be green while spewing more than average amounts of carbon dioxide. Steve Malloy of Junk Science must be a reader of TT. He blogged about the Greenest Hypocrites of 2007. He listed old Alfalfa as his numero uno pick. His number ten pick is the California Hypocritenator http://www.foxnews.com/story/0,2933,315721,00.html

Enough about cold hearted politicians who pretend photosynthesis was intended to propel 800 million vehicles that weigh on average 3,000 pounds. Talking about cold Oklahoma got nailed with an ice storm of epic proportions. Can you see the truck that is hidden in the ice covered tree in the photo below?



For precipitation to occur as ice a warm front actually has to traverse over and above a cold front and then thermo takes over and it rains water in a solid form.

http://www.foxnews.com/story/0,2933,316271,00.html

I am glad to inform the TT readership that Smell Oil is getting into the Algae to BioDiesel game. I hove opined that algae to BioDiesel is a far better thermodynamic and social idea than using corn to produce BioEthanol. A lot of the research is being performed in Hawaii so I may just have to take a trip out there to investigate. I am asking TT readers to donate their frequent flier miles so I don’t use my personal Lear JET and increase my carbon Bigfootprint. The US DOE reports as follows:

Shell and HR Biopetroleum to Grow Algae for Biofuels
A researcher examines algae cultures at the Natural Energy Laboratory Hawaii Authority. See a larger version of this photo.Credit: Shell
Royal Dutch Shell plc announced yesterday that it will work with HR Biopetroleum to build a pilot facility for growing algae as a source of biofuels. The facility will cultivate algae in seawater ponds, then harvest the algae and extract oil from them for conversion into fuels such as biodiesel. Construction of the facility will begin immediately on a parcel of land leased from the Natural Energy Laboratory of Hawaii Authority (NELHA), which is located on the shore of the Hawaiian island of Kona. The NELHA site is ideal for the project because it pipes in a constant supply of clean, fresh ocean water. NELHA was originally built to support a DOE project for ocean thermal energy conversion, and it continues to employ the project's seawater supply pipes to support a variety of research projects and commercial enterprises, including facilities that currently grow and harvest algae for pharmaceuticals and nutritional supplements. Shell and HR Biopetroleum have formed a joint venture company, called Cellana, to develop the biofuels project.
Algae grow rapidly and can have a high percentage of lipids, or oils. They can double their mass several times a day and produce at least 15 times more oil per acre than alternatives such as rapeseed, palms, soybeans, or jatropha. Moreover, algae-growing facilities can be built on coastal land unsuitable for conventional agriculture. The Cellana facility will grow only non-genetically modified, marine microalgae species in open-air ponds using proprietary technology. It will also use bottled carbon dioxide to test the algae's ability to capture carbon. To support the facility, academic research programs at the University of Hawaii, the University of Southern Mississippi, and Canada's Dalhousie University will screen natural microalgae species to find the strains that produce the highest yields and the most oil. See the Shell press release and the NELHA Web site.
Shell isn't the only oil company that's exploring the potential of algae. In late October, Chevron Corporation and DOE's National Renewable Energy Laboratory (NREL) announced that they had entered into a collaborative research and development agreement to produce biofuels from algae. Under the agreement, Chevron and NREL scientists will collaborate to identify and develop algae strains that can be economically harvested and processed into transportation fuels such as jet fuel. See the NREL press release.



The word of the day is cacophony. This is the sound of the phonies in Congress disagreeing on how much to tax the poor oil companies. Interestingly the opposite of cacophony is euphony I guess the European Union (EU) had something to do with this definition


cacophony \kuh-KAH-fuh-nee\, noun:1. Harsh or discordant sound; dissonance.2. The use of harsh or discordant sounds in literary composition.
New York was then a cacophony of sounds -- a dozen accents ricocheting off surrounding buildings as immigrant mothers called their children home for supper, noon whistles blowing, vendors hawking their wares on the streets, children shouting, horses whinnying, and people yelling.-- Herbert G. Goldman, Banjo Eyes
The mammoth central station towered over the platforms, and with the cacophony from whooshing steam, shrill whistles, shouts and the heaving of hand and horse carts, not only was it the biggest, noisiest, most confusing experience any of them had ever encountered, but the city was almost unimaginable.-- Christopher Ogden, Legacy: A Biography of Moses and Walter Annenberg
Cacophony comes from Greek kakophonia, from kakophonos, from kakos, "bad" + phone, "sound." The adjective form is cacophonous. The opposite of cacophony is euphony.