The End of Advanced Equities

Advanced Equities the Chicago based firm that raised money for Bloom Energy and Fisker is going out of business

This operation raised money from wealthy private individuals who thought they were getting a great deal following Al Gore’s and Colin Powell’s lead in being involved in one or both of these Kleiner Perkins funded companies.  Many of my readers were mad with me for castigating Colin and lambasting Al.  Now their thermodynamic house of cards built with these two gangrene companies is collapsing.

The Forbes article linked above also states the following:

“In September, Advanced Equities was charged with misleading prospective investors on a pair of private placements for private fuel cell maker Bloom Energy. Among the lies were that the company had more than $2 billion in order backlogs (it only had $42 million) and that it had a $1 billion order from a national grocery store chain (it was only $2 million). AE settled the charges by, among other things, agreeing to pay a $1 million penalty.”

The Forbes article goes on to state “I have also heard rumors that AE recently received subpoenas related to its fundraising efforts for another well-known cleantech company, but have not yet been able to get confirmation.”   The Green Machine asks Could this be Fisker?

Also stated in the Forbes article is the implication that Advanced Equities raised money for companies owned by Vinod Khosla.  I have blogged about Vinod being involved with Range, Calera, Kior and Amyris who are failed or soon to fail companies.

My brother and my nephew won’t read my blogs as they think I am a right wing nut.  A person I mentored has asked to be taken off the distribution list of my blog because he thought I was outrageous to question Colin Powell’s green intentions.  I have been punished for my heartfelt belief that Bloom and Fisker are thermodynamic fakes.  But guess what? In the end the second law of thermodynamics prevails and having Al Gore, Colin Powell, John Doerr,  and T J Rogers in your company simply won’t make junk good. 

Advanced Equities is the first shoe to drop.  Watching this all unfold is going to be fun.  The photo is of the burned out and flooded Fisker Karmas at Port Newark post Hurricane Sandy.  For Fisker Sandy was just the beginning of the end.

We Could Be Stuck With Chu????

Guess What?   My worst nightmare may become reality.  President Obama may have to keep Steven Chu as Energy Secretary.  It is not because Mr. Obama is pleased with Dr. Chu’s job performance.  It is because the US Senate may not approve any other person the President nominates to replace Chu.  Talk about Hobson’s Choice where the choice is a free choice but only one option is offered.  Wiki tells us “The phrase is said to originate with Thomas Hobson (1544–1631), a livery stable owner in Cambridge, England. To rotate the use of his horses, he offered customers the choice of either taking the horse in the stall nearest the door or taking none at all.”

Old Hobson at least had some horsepower while Chu is simply a killer what of cluelessness. 

The National Journal wrote this of the Options for Energy Secretary this past week.

“In his first term, Obama had sweeping ambitions for the Energy Department, as signaled by his pick of Nobel physicist Steven Chu to lead the department. The idea was that Congress would pass a cap-and-trade climate-change bill and Chu would oversee a transformation of the once-backwater department into a driver of clean-energy development. Instead, cap-and-trade failed, a solar company called Solyndra got a $535 million Energy Department loan and went bankrupt, Chu was tarred with the controversy, and prospects for a climate bill are bleaker than ever. It’s widely known in Washington that Chu wants to leave his post, but people close to the White House say that the president may ask him to stay. One reason: In the fiercely partisan Senate, it could be tough to get a new secretary confirmed.

One candidate who might make it through that process is former Sen. Byron Dorgan of North Dakota. Respected by his Senate colleagues, the mild-mannered Dorgan formed many strong working relationships across the aisle. He's also steeped in energy policy and the inner workings of the Energy Department; he served for years on the Senate Energy and Natural Resources Committee; and he chaired the Appropriations subcommittee that oversees Energy's budget. Although a big advocate of clean energy, Dorgan supports the oil and gas fracking boom that has brought an economic revival to his home state.

Also on the list are two former Clinton administration officials. One is Dan Reicher, who served as Clinton’s assistant secretary of energy efficiency and renewable energy, and from 2007 to 2011 was Google’s director of climate-change and energy initiatives. He currently heads the Center for Energy Policy and Finance at Stanford University, where Chu was once a professor of physics. Of all the possible candidates, Reicher would likely offer the strongest continuation of Chu’s legacy. The other former Clinton official is John Podesta, chairman of the liberal think tank Center for American Progress, who was Clinton’s chief of staff. Their progressive pedigrees could be stumbling blocks to Senate confirmation for both of these men, but Podesta, certainly, would be well suited to navigating the political vagaries of the top Energy post, which was widely seen as Chu’s greatest failing.”

President Obama if Chu wants to leave please show him the door!!  I will write each and every US Senator to confirm whomever you nominate for energy secretary even if you choose Al Gore.  Actually if Al Gore became energy secretary he would do less harm to the world as he would actually have some constraint on the thermodynamic nonsense he espouses and he would have to expose all of his investments in companies that received US tax payers’ money.     Yeah I say Al Gore for Energy Secretary. 

Like a three year old I am reciting my ABCs over and over and it goes like this “Anybody But Chu, Anybody But Chu, Anybody But Chu,………….”

Cap and Trade California is the New Greece

California Assembly Bill 32 (AB 32) becomes law this week.  This far reaching bill will enact a cap on greenhouse gas emission in the once Golden State.  The bill is modeled after similar legislation in the European Union that established a Cap and Trade system for greenhouse gas emissions.  California will now become the second biggest market for Cap and Trade after the EU. 

Sounds like a great idea to cap greenhouse gas emissions and then force those who cannot eliminate their emissions to pay a fee for those emissions that were not eliminated.  Our local newspaper the Marin IJ carried a very informative article today on the mechanism of implementation of the Cap and Trade bill.  In a nutshell the intent of the Bill is return California to its 1990 levels of emissions of greenhouse gasses by 2020.   I think that we will reach that level simply by the continued decay of our economy and the flight of businesses and citizens from the once Golden State.  We are the Greece of the United States.

For a motorist paying the pass through effects of the bill it will be an additional tax of 12 cents a gallon with a present futures market price of $12 per ton of CO2.  The $12 per ton is actually a “fair” price for the market value of a ton of CO2 emissions.  I have previously blogged that plug in electric vehicles actually impose a cost of over $500 per ton of avoided CO2 to the motorist.  The real cost of the Bloom Box fuel cell technology that Al Gore is invested in, is an infinite carbon tax as the Bloom Box is dirtier and much more costly than power generated in a combined cycle power station.  The math shows that dividing added costs by increased emission means an infinite tax from this rubbish technology.

Based on the above, a California motorist paying only $12 per ton of CO2 emissions is getting a “bargain”.    My worry with the Cap and Trade system is that it will get gamed and the State will not have the resources or the intelligence to know they are being taken for a ride.  Remember the deregulation of electricity under Governor Davis and how Enron were the much smarter guys in the room compared with the California Energy Commission. 

As the Green Machine is all for conservation and energy efficiency I actually am not sad we citizens of the once Golden State will test this Cap and Trade system at a low price.  If it gets out of hand and the real cost is above $20 or $25 a ton of carbon dioxide then I think we will simply be overtaxed.  I am also all for California abandoning the tax credits given to Al Gore’s Bloom Box as that is simply the most idiotic waste of tax payers’ money.  But AB 32 did not end those massive tax credits to the owners of Bloom Boxes.  The state assembly should now revoke the tax credits given to the fully discredited Bloom Box and I will not lodge any complaints about paying an extra 12 cents a gallon of gasoline.

What I do not want to do is pay over $200 per megawatt hour of dirty power from a Bloom Box when I could have paid $70 per megawatt hour of power from a cleaner combined cycle power station.  The fools in Delaware are doing this with their 47 megawatt Bloom Power station in the coastal zone.   But wait Al Gore the father of the Bloom Box is going to give a talk in New York City linking dirty energy to dirty weather.   I wonder if the opportunistic environmental carpet bagger will discuss his Bloom Box as being the poster child for dirty energy?  Hell no he stands to make many more millions out of Bloom Energy and his hypocritical speeches

No doubt California is the new Greece and Al Gore is not Plato who said “there must always remain something that is antagonistic to good”.  That is precisely why we have Al Gore and His Bloom Box.

GMO Foods and GMO Fuels

A very interesting week has passed.  First we had the elections, then the news of the Iranians firing on a US drone, and then the resignation of the general who heads the CIA.  I simply have no comment on these current events as the big news for the week was about a small company called Ceres and another small company called Kior.

Ceres trades on the NASDAQ as CERE.  CERE had its IPO earlier this year and traded at $18 shortly after its debut in March.  Yesterday it traded at $4.15.  Ceres is in the business of selling genetically modified seeds.  The stock did not drop because Whole Foods decided against stocking GMO foods.  Ceres was touting their GMO seeds to grow switchgrass and other fast growing biomass crops as sources for cellulosic ethanol and other advanced biofuels.  We all now know the advanced bio fuels industry is in disarray and most of the biofuels companies like Amyris, Gevo, Codexis, and Solazyme have seen their stocks hit rock bottom. 

In the USA the advanced bio fuel industry is about in as bad a shape as the lithium ion battery industry, and the solar industry.  The advanced bio fuel companies do not have Chinese competition to blame, they simply tried to do the impossible from a chemical engineering point of view.  The cost of production of advanced bio fuels is approximately $4 per liter and the fuels have a wholesale value of $3 per gallon.  Perhaps the chemical engineers at Amyris, Solazyme, Codexys, and Gevo were doing their cost calculations in the metric systems and forgot to make the conversion to US gallons.  I kind of remember in 1999 NASA made a similar mistake of mixing up metric and imperial units with a failed Climate Orbiter probe to the planet Mars.

But now the story of the biggest bio fool of all.  That is Kior (KIOR on the NASDAQ) the Vinod Khosla creation that hopes to bio mimic in seconds what mother-nature took several hundred million years to perform.  Kior claims to turn wood into diesel in an instant in their famous fluidized bed reactor with their proprietary catalyst.  I think Kior turns wood in mostly soot, carbon monoxide, and carbon dioxide in their reactor and their claims that at commercial scale they will produce 72 to 80 gallons of liquid fuels per ton of bone dry wood are vastly over inflated.    Kior will be lucky to have a full production cost of $4 per liter of diesel.  Vinod Kholsla had a hand in bringing us the defunct Range Fuels, the carbon sequestration fake out Calera, and the almost defunct Amyris.  Vinod is still regarded by some blind followers as the green guru of Sand Hill Road.  I think Vinod will soon be forgotten.

You may ask who buys diesel at $4 per liter?  Actually the US Department of Defense and the newly greened navy, army, and air force are quite happy to defend us by buying diesel at $19 a gallon or just about $5 per liter.  Yes in the times of budget cuts and austerity the defense forces are quite willing to pay six times the market value of diesel to save a few tons of carbon emissions.  Maybe the four star generals who are the joint chiefs have the same problem as NASA has back in 1999 and are still mixed up between liters and gallons?

Incidentally California voters turned down the opportunity to label GMO foods.  Now California voters have to also tell the Governor to turn down overpaying for GMO fuels and to start developing the shale hydrocarbons that are sitting right underneath us in the once Golden State.

Working Together For The Common Good

The election is over and now is the time for the country to work together.  We need to add well-paying jobs and we must use energy and other resources wisely.  Yeah better jobs and smaller hybrid cars are going to be in our future.  These hybrids will be micro-hybrids as well as standard hybrids.  We will also have more people carpooling, taking public transportation, or even riding bicycles to get around. 

I feel really confident that energy consumption in the US transportation sector will continue to drop by at 1% each year over the next two decades.  I am certain that in four years President Obama will be able to claim real success in reducing the quantity of gasoline used to move Americans around.   In 2007 the US used 9.3 million barrels a day of gasoline.  Year to date in 2012 we are averaging 8.6 million barrels of gasoline a day.  I predict that by 2030 we will use approximately 7 million barrels a day of gasoline. 

I also think that purely electric vehicles will remain a small niche market and that the real savings in transportation fuel usage will come from improved vehicles with internal combustion engines with or without hybrid assist.  I also think that advanced bio fuels will fizzle out and that the quantity of ethanol and other fuels made from biomass will remain pretty level with the peak reached in 2011 when corn ethanol peaked.

There is going to be a period of several years of drought with a warm Atlantic and a cold Pacific.  Corn based ethanol will be limited by the availability of sufficient corn.  Bio diesel might reach a production limit of 100,000 barrels a day.  It too diminishes the availability of edible vegetable oils.   Bio diesel and bio butanol from genetically modified algae and bacteria will pretty much be dead end technologies with only a very limited amount of these fuels ever produced.  Cellulosic liquid fuels are simply dead on arrival.

The real winner in the coming two decades will be domestic production of shale oil and shale natural gas and the US must exploit the shale bonanza for the good of us all.  I pray that President Obama will not kill this goose that is laying the golden egg.  The shale gas will also have widespread usage in the supply chain for producing high value added chemicals as well as steel. 

Nucor the leading US steel company announced a massive deal to buy working interests in shale gas reserves in the US in partnership with Encana.  Nucor uses natural gas to convert iron ore to direct reduced iron (DRI) that is then converted into steel.  Between the investment in shale gas and the DRI facilities Nucor is investing over $5 billion in the USA during the next decade.  President Obama should take note of this project and should now come out in full support of projects like this.  Nucor’s carbon footprint in steel making will be half that of the Chinese mills.  Nucor you make me proud.

Over the next few weeks we will see if President Obama sticks with Steven Chu for energy secretary.  I pray he does not and I hope that the President fills this post with someone much more capable than Chu.  Chu’s predecessor Sam Bodman who was President Bush’s choice for Energy Secretary was equally incompetent as Dr. Chu.  The President should let me interview the next Secretary of Energy so we do not get a third thermodynamic stooge in a row filling that very important job.

Clowns to the Left of Me Jokers to the Right - Here I Am Stuck in the Middle with You

The election is in two days.  Please go out and vote as you please but do not do it for revenge.  After the election we have to come together and really start to solve our problems.  The problems we have are a lack of jobs, cleaning up after Sandy, cutting the massive deficit, and simply not having an energy policy.  Our biggest long term problem though is most Americans are plain dumb when it comes to science, engineering, and technology.  All these problems will still be with us on November 7 and beyond inauguration day of the president.  The inauguration will be on Monday January 21, 2013.  Normally inauguration day is January 20 but if the day is a Sunday it is pushed back by a day.  The problem of a scientifically ill-educated population will take decades to remedy.

Excuses are over and it is time to get working.  We have to work on winning strategies rather than hopeful strategies.  We have to stop wasting time and money on junk science and hopes that the laws of thermodynamics disappear.  As an example of this junk science I will discuss in this blog is a company called Via.  Via is the resurrection of the bankrupt Raser Technologies and they like their predecessor are still at it fibbing about miles per gallon for their plug in Trucks.

David West was the Raser executive I had as a guest on my radio show three years back and he was the guy who claimed their plug-in Hummer that Arne and Senator Hatch drove achieved 100 MPG.  David West is back as the chief marketing officer for Via and is still claiming that his large plug-in SUVs get 100 MPG.  He even claims his volt plug-in achieves 500 MPG.  Check out this video.

He may be able to fool two thermodynamically impaired reporters in Salt Lake City that you divide all the miles driven on electricity and gasoline by the small volume of gasoline you use to determine the miles per gallon.  He and the two reporters believe that the electricity used for the majority of their driving has no energy content.   I would have simply ignored Via and Mr. West’s fibs about MPG.  But Via has Bob Lutz the ex -vice chairman of GM on their board.  Lutz and Via got plenty of exposure this month for the “100 MPG” trucks on the Jay Leno Garage show.

I guess Lutz like Obama need a fool like Leno to make their case.   Please watch the Leno video of the Via truck that is in the above link.  Leno and Lutz think I am a Putz!  They think I am going to believe that Leno’s Volt achieved 1,250 MPG and the electricity Jay placed into the Volt had no BTUs associated with those electrons.  Leno may want Obama to continue as President as he is worried that Romney may actually call him out on his thermodynamic stupidity.  Also Romney claims he is about creating jobs not shedding jobs.  Leno is a champ at shedding jobs.

OK enough about Jay.  Mostly what got my goat about the video from Salt Lake City is that one of the reporters is named Lindsay and it is simply unacceptable that someone with my name can be so gullible.   But my namesake is the poster child for just how easily most Americans can get fooled by folks falsely promoting green products.  It is not her fault.  It is the fault for the FTC to allow all this greenwashing to continue.  As to Jay Leno he simply is the court jester.  I expect he will never learn how to count BTUs as he simply has too much money to count and too few brains to count them with.

Solyndra Haunts Obama in Bankruptcy This Halloween

The president got tricked not treated this Halloween.  Judge Mary Walrath, the bankruptcy judge for the Solyndra bankruptcy, ruled that the US department of energy will simply lose most of the $527 million in tax payers’ money Obama and Chu risked in betting on Solyndra.   The judge also ruled against objections that the US Internal Revenue Service had against the chapter 11 bankruptcy plan.  The third strike against the administration happened when the judge also ruled against a third US agency, the Office of the US Trustee as well.  Obama is batting like the Detroit Tigers when it comes to the Giant Judge Mary Walrath.  I love the Giants and they are world champs!!  I guess Obama used a new Halloween mask and costume when he went out last night.  Instead of dressing as Santa Clause and handing out freebies to his bundlers he dressed as himself in the first debate and looked lost, tired, and dejected. 

Dow Jones Daily Bankruptcy Review reported on the bankruptcy court’s decision that basically gave Obama three strikes.  The silver lining in the gangrene company however will be for George Kaiser, the Obama bundler, and large investor in Solyndra.    Two private equity groups that George Kaiser has a hand in, will keep most of the money they got back from Solyndra for a $77 million loan they made to the company.

The irony of Steven Chu’s Department of Energy fighting in court for the money the private equity groups will get should not be lost.   There is no doubt that Dr Chu favored investing in Solyndra because he was both partial to Mr. Kaiser his boss’s benefactor and to the exotic chemistry of copper, indium, gallium, diselenide that the Nobel Prize winner still believes is how solar cells should be made.   Perhaps it is Dr. Chu who got tricked as well as treated?  He got tricked by his own brilliance in the physical sciences and he got treated to a shellacking by the Chinese who went with simple silicon chemistry to dominate the solar cell market.

Chu and Obama as well as the taxpayers were told by the judge that if and only if Solyndra prevails in the collusion and price fixing case against three of its Chinese competitors will the DOE funds that were lavished on Solyndra be returned.  I have opined that this lawsuit Solyndra has filed against the Chinese competitors is rather bizarre.

It was reported that Obama Halloween masks outsold Romney masks by a margin of 60% to 40%.  Where I come from people buy masks of a celebrity they want to lampoon.    Some will argue however that the mask sales are an indication of the results of the upcoming election.  Those who argue this way also believe that Secretary Chu has the Midas touch.  I tried to find a Halloween mask of Dr. Chu but none were available.  Instead I dressed as Big Bird with a sign that says “if Dr. Chu had not wasted $90 billion, Romney would not be cutting my funding.”  Big Bird was a very popular costume this Halloween.