The Army To The Rescue

For the life of me I did not know why A 123 had an increase in its stock price over the past two or three days.  The news came out today that the US Army came to its rescue.  Of course after the Department of Energy wasted over $100 million on this Betamax junk, the Army needs to lend a helping hand.  The Army is testing a prototype more fuel efficient hybrid fighting vehicle that includes A 123 lithium ion batteries.  Yeah the army wants to be fuel efficient.  Did the army not read the news that an A 123 battery caused a massive explosion in a specially built lab of General Motors that injured a technician and blew out an 8 inch thick special purpose steel door in the lab?  Structural damage was also caused to the lab.  But the Army can safely deploy a fighting vehicle in a war zone with the same lithium batteries on the premise that we should be green when fighting the enemy. 

How dumb can military intelligence be!    The enemy in a combat situation will be able to make our military vehicles explode more viciously if they simply aim at the battery pack.  If the US Army wants to save fuel why not avoid unnecessary wars and simply use the vehicles during parades on the Fourth of July or Memorial Day?  Better still as we all like soldiers marching in perfect step why even have vehicles driving in the parade?  I have a suggestion for the Pentagon.  Why not equip electric bicycles with A 123 batteries and instead of soldiers being in an infantry division they could be the new first electric cavalry division and win the West in skirmishes where the enemy only uses bows and arrows to wage war.   Imagine a scene in the sequel to Blazing Saddles where the arrow fired by Chief Electron Volt scores a direct hit to the battery pack under the saddle of the cavalry officer named Major Mega What.  The army has the perfect solution for the deployment of the new lithium ion powered hybrid fighting vehicle.  Of course the GIs who will be assigned to use the fuel efficient fighting vehicle will wear bright green camouflage and the vehicles will only be deployed to protect a plantation of cane sugar that is the source of the ethanol fuel for the engine in the vehicle.  The army will claim carbon neutrality while fighting a war.  How can something be neutral and yet fight wars?

Brazil Needs Booze

Brazil leads the world in blending ethanol into gasoline for transportation fuel. Their large land mass and their large sugar cane crop helped support an industry that over the past twenty years became the darling of the lefties at Cal Bezerkeley. Many papers were written at that fine institution that ethanol from cane has a positive carbon footprint and that while ethanol from corn in the US may not have a positive carbon footprint we need not worry as ethanol from cane sugar will dominate the world stage for this bio fool. Fast forward and we now find out Brazil cannot supply their own needs of ethanol and they have become net importers of the fuel. From whom do they get the fuel? From the US of course and the ethanol certainly did not come from cane sugar in Hawaii, it came from corn in the Midwest. Brazil is so short of ethanol they have cut down the fraction of ethanol in gasoline blend from 25% to 20%.

Our government wants us to increase our fraction of ethanol in gasoline above 10% and the fuel fools at Bezerkeley are all love this as they dream of green while ignoring thermodynamics. Of course Brazil discovered large fossil fuel reserves and this is not 1979 in Brazil when they were impoverished and could not afford oil imports after the oil shock. Brazil needed to become self-sufficient in transportation fuels and the cane sugar ethanol did help. However what really helped was the discovery of massive fields of oil off shore of Brazil and exploitation of these fields allowed Brazil to become a major oil producer. The Brazilian economy has been propelled by the Chinese economy the Chinese need for Brazilian iron ore and Soy Beans. Over the past decade trade between Brazil and China has grown 20 fold. Over the past decade the only thing at Bezerkeley that has grown is the cost students must pay to attend university in our bankrupt state.

The equally dumb staff at the California Energy Commission in Sacramento mandated the need for low carbon transportation fuels and mistakenly they continue to think that natural gas is not a low carbon fuel. They still have this dream of electric vehicles and hydrogen fuel cell vehicles. While Brazil actually has had massive economic growth in the last decade, we have had nearly none except for Apple, Facebook, Google and a few other social media companies. Our Silicon Valley is depleted of all silicon and perhaps one hundred thousandth of the microelectronic circuits fabricated each year on planet may actually come from Silicon Valley where it all started. Industry has been driven away and the Fabs I designed at Intel, National Semi, VLSI, Xerox PARC, and others have been dismantled and their equipment sold to China or just sits on a scrap heap.

The team at Bezerkeley can write academic papers that cane sugar ethanol is green but even the verdant and large country of Brazil has no space to increase their crop. More and more of the world’s cane sugar is now grown on irrigated land and that irrigated cane sugar actually has massive carbon and water footprints. It had to happen that Brazil could not simply propel their fleet of vehicles on cane sugar based ethanol. Even a weed that grows fast but yet relies on photosynthesis cannot propel almost a billion vehicles on the planet and 60 million vehicles in Brazil. C’mon folks over the past decade many millions of people saw their lives improve because of economic growth driven primarily from China. These people want cars not bicycles and cars need fuel not foot power so let’s all move toward the Prius or a much smaller version of the Prius that should be called the Minus. The one thing that remains constant in Brazil is excellent football. I hope that when they all drive in cars they do not lose their innate skill to kick a ball into a net. I still have dreams of being Pele, but I certainly do not have dreams of being the governator of our decaying yet once golden state. The Kelvinator maybe, as old Kelvin was top notch in thermodynamics. One can still buy a Kelvinator refrigerator in Argentina but like Maradona was not Pele, Argentina is not Brazil when it comes to economic or football miracles.

Fracking and Elkader Iowa

A really interesting week. A One Two Three continues to stumble and caused a lab explosion and injury to a lab technician with a battery they sent to General Motors for testing. I will not dwell on this company that is a thermodynamic joke. Bright Source the other heavily funded DOE DOA company decided to pull their IPO as they simply could not get the share price they needed. That says to me investors have smartened up and won’t fork out bucks like they did on AONE, KIOR, AMRS and other want to be green companies. The Chinese continue to manufacture polysilicon and sell the starting material for many solar cells at cash production costs. I guess when your government funds you it is possible to even sell your products below cash production costs. Solar Millennium who gave up on thermal solar in favor of PV have now simply given up completely on the US projects they intended to develop and the US DOE intended to fund. I guess we will have to wait till the third millennium for them to reappear. So the Green Machine was spot on and the second law of thermo arrested these fake-outs who were going to make our lives carbon neutral. I guess we all go back to natural gas that is now very affordable and the companies that are involved in this industry have seen their share prices soar rather than tank. Such companies are WPRT, CLNE, LNG, and GTLS. I am not making any stock recommendation just simply pointing out these companies are on the right side of the second law of thermodynamics.

The President signed an executive order to set up a Whitehouse based oversight committee for the streamlined oversight of fracking reserves for production of hydrocarbons. Finally in this election year the administration wants a coordinated approach to the single industry that actually created jobs, brought down costs, helped displace coal and hence lower carbon emissions, and may provide the US with a product we can actually export. Below I have copied an article from the Washington Times that reported on this landmark event. The person chairing the oversight committee is Heather Zichal. No doubt a very intelligent fairly young woman who never studied thermodynamics but let’s give her a chance as she was born in Iowa and I was educated in thermodynamics at Iowa State. Heather now is your chance to shine unlike the PV and green energy companies the department of entropy funded. It is quite amazing that a 36 year old person who came from Elkader Iowa may actually play a larger role in real energy policy than the winners of the Nobel Prizes in Physics and Peace. I looked up Elkader and it is the county seat of Clayton County. Very interestingly back in 1846 when the town was founded it was named after an Algerian Leader of the time. Wiki lists the following: The city is named after Algerian leader Abd al-Qadir al-Jaza'iri. When the community was platted in 1846, the founders, Timothy Davis, John Thompson, and Chester Sage decided to name it for the young Algerian who was leading his people in resisting the French colonial takeover of Algeria. Heather let’s hope you are not an Al Qadaffi when it comes to energy policy. Please God your town was not named after Al Qaeda but I have to say the pronunciation is bloody close. If I was mayor of Elkader Iowa I would think about a name change to Frackville Iowa.

By Ben Wolfgang

-

The Washington Times

Friday, April 13, 2012

In a move that immediately drew praise from across the energy industry, President Obama on Friday issued an executive order to better coordinate federal oversight of “fracking,” the popular but controversial natural gas extraction method.

The order establishes an “interagency working group” consisting of members from the Environmental Protection Agency, the Interior Department, Energy Department, National Economic Council and other bodies. At least 10 federal departments or agencies are currently mulling new regulations of the gas industry, or have commissioned studies of its environmental impact.

The sheer number of potential rulemakers has caused many industry insiders to fear confusing or overlapping guidelines, which, some analysts say, could greatly hamper domestic oil and gas production. The new working group, Mr. Obama said, is designed to “ensure coordination among the appropriate federal entities.”

“By helping to power our transportation system, greater use of natural gas can also reduce our dependence on foreign oil. And with appropriate safeguards, natural gas can provide a cleaner source of energy than other fossil fuels,” the order reads in part. “It is vital that we take full advantage of our natural gas resources, while giving American families and communities confidence that natural gas and cultural resources, air and water quality, and public health and safety will not be compromised.”

Mr. Obama’s announcement comes just as the November presidential election kicks into high gear, with energy policy, and the administration’s perceived antagonism toward fossil fuels, shaping up to be a key issue in the race. It also comes as the fracking boom has produced stocks of natural gas so large that prices are now hitting record lows.

Presumptive Republican nominee Mitt Romney has lately made increased American energy production a focal point during campaign speeches, and has accused the administration of seeking to limit U.S. research and production. Many Republicans in Congress have painted the administration’s EPA as the determined enemy of natural gas, with some members accusing Mr. Obama of waging a war on the industry.

Friday’s olive branch, which could help to reduce tension between the administration and the oil and gas sector, was met with enthusiasm from industry leaders.

“We’re pleased the White House recognizes the need to coordinate the efforts of 10 federal agencies that are reviewing, studying or proposing new regulations on natural gas development and [fracking],” said Jack Gerard, president and CEO of the American Petroleum Institute. “We have called on the White House to rein in these uncoordinated activities to avoid unncecessary and overlapping federal regulatory efforts and are pleased to see forward progress.”

Barry Russell, president and CEO of the Independent Petroleum Association of America, said in a statement that the order “has a very good intent,” and he hopes the revamped regulatory framework “provides the administration with a more comprehensive understanding of the federal government’s increasing regulatory grasp on the industry.”

The Marcellus Shale Coalition, which represents drilling firms in Pennsylvania and other areas of the Marcellus, one of the richest known gas deposits in the world, is offering to work closely with the administration in the coming months.

“We remain eager to provide real-time, on-the-ground insight in an effort to ensure that common-sense regulations are in place, which is essential to leveraging the countless benefits of America’s natural gas resources,” said coalition President Kathryn Klaber.

It remains to be seen, however, whether the move lessens the potential impact of looming federal rules. Later this year, the EPA will release a long-awaited report on the environmental safety of fracking, the use of water, sand and chemicals to crack underground rock and release vast quantities of fuel. Many industry analysts expect the report to call for sharp new restraints on drilling.

Fantasy Island

News Flash Fisker Threatens the US

Has the Green Machine gone nuts? How can Al Gore’s wonder child threaten the United States? This car company has sold 500 cars in total to the rich and famous. They received over $180 million of US funding to “engineer” their Karma that weighs over 5,000 pounds. They were to receive over $500 million of US DOE funding for the factory to mass produce their second generation “affordable” car in Delaware, but that funding has been put on hold pending review of their “business plan”. Of course Al Gore’s group at Kleiner Perkins had to up their equity investment in the Flopping Fisker and now that this round of equity funding has been completed Fisker is now Frisky and full of bravado. Their CEO stated this week that if the US does not fork over the big dough to Fisker they will leave the country. That pile of dough should be used to bake American Pie for us all, but Fisker wants it for their fat cat owners and to subsidize their fat cat customers like Just Born Bieber.

Fisker unveiled the new affordable second car called the Atlantic at the New York Car Show this week and used the opportunity to exert pressure on the US to reinstate the half billion dollar funding for the Delaware assembly facility. The car used to be called the Nina but I guess they realized this was a sister ship to the Pinto and that is not good Karma for their Dogma of a company. Of course I know the Pinto was the Pinta, but I am allowed some poetic license. The Governor of Delaware claims he was caught off guard and that this was the first he heard of the Fisker declaration of war on the country and his state. Of course the Vice President who hails from Delaware, and who engineered the original deal for Fisker and his pal Al, is radio silent. Chu and the President are tight lipped and of course Gore did not personally pull the threatening stunt on the US. They used Tommy LaSorda (Tom the Sordid) their new CEO to raise the issue of vacating the US. "We're going to launch this car with or without the DOE," said Chief Executive Tom LaSorda during a media event ahead of the New York auto show. "We're proceeding where the best cost will be. We're looking for alternative options to the U.S., of course."

Fisker was founded by Henrik Fisker who was recently replaced by Tommy as CEO. Henrik was born in Denmark. William Shakespeare set his longest play and saddest tragedy Hamlet in Denmark. Sadly the modern long tragedy out of Denmark is Fisker. The Atlantic has a BMW internal combustion engine not a Chevy engine that was used in the Karma, so much for the American jobs in that regard. The Atlantic will have a far smaller battery pack than the Karma and therefore it will be limited on the range for electric drive. So this billion dollar wonder is a plug in Prius with a great looking body. I say they should choose a third name for the car using a combination of the first two names. I would call it the Panic and I would rename the Karma the Titanic. Leonardo you went down in the Titanic, played Romeo with Juliet, and your Karma needs a whole new set of A 123 batteries. This is sufficient tragedy so why not star in a comedy as your next film? That comedy can be set in the eco-friendly resort on the island you own off Belize that you plan on developing. I suggest the name of the new film be Fantasy Island. Maybe Fisker can assemble their eco-friendly Atlantic on this Atlantic Fantasy Island? Do you all remember Ricardo’s TV ads for the 1975 Chrysler Cordoba? Do you all know that Tommy LaSorda led Chrysler as its CEO? Do you all know Leonardo’s middle name is Wilhelm (German for William)? All of these do you knows can be weaved into the Fantasy Island plot.

Gore Likens Carbon to Subprime Debt in Plan to Repair Capitalism

This week I simply am providing you all an article from Bloomberg from 6 weeks ago. The Architect of Fisker now has performed the math to correlate carbon to sub prime loans. Oh yes Al, the Chinese who have increased their carbon emissions four fold in 15 years have no economic activity. The Greeks who have not increased their carbon emissions over the same period have a wonderful economy. Yes Al you did invent the internet! Yes Al you did a great job as Vice President! Yes Al you deserved your Nobel Prize. And yes Al you managed to make mega millions without even buying a lottery ticket by being so green. I hope you all get the same chuckle I did in reading the article below. PS does David Blood have green blood? Also as he was from Goldman Sachs how did he fare in the subprime crisis?

By Simon Clark
Feb. 16 (Bloomberg) -- Former U.S. Vice President Al Gore said investors in oil and gas companies who ignore the cost of emitting carbon dioxide and other greenhouse gases are making a mistake similar to those who invested in subprime mortgages.
“The value of the subprime mortgages was based on a false assumption,” Gore said yesterday in an interview. “In almost exactly the same way, the value of all of these carbon fuel reserves is based on a similarly absurd assumption.”
Gore made the analogy as Generation Investment Management LLP, the asset manager he founded with former Goldman Sachs Group Inc. executive David Blood, published a five-point plan titled “Sustainable Capitalism” to reform the investment industry. They want the proposals to help combat climate change and poverty as well as boost profit in the long term.
Gore and Blood recommended investors identify “stranded assets” whose value would change significantly under certain scenarios, such as a price being set for carbon or for water. Second, they said investors should use environmental, social and governance data as well as financial data to value companies. Third, companies should end quarterly earnings guidance to remove pressure for short-term gains. Fourth, companies should reward managers for long-term performance, and fifth, investors should be rewarded for holding shares longer with “loyalty- driven securities,” Gore and Blood said.
“The bitter experience that the subprime mortgages caused should be a reminder that stranded assets have the potential for doing a great deal of damage,” Gore said in a video link between Generation’s New York and London offices. The firm manages about $6.5 billion.
“These subprime carbon assets have an asserted value based on the assumption that it’s perfectly OK to put 90 million tons of global warming pollution into the atmosphere every 24 hours,” he said. “Actually it’s not.”
‘Absurd Assumption’
Gore, a Democrat who won a Nobel Prize in 2007 for his efforts to raise awareness of climate change, said the “absurd assumption” that he sees underpinning energy stocks may collapse in the next decade.
Gore said energy companies also aren’t properly valuing the water resources they use for hydraulic fracturing, or fracking -- technology that releases gas trapped in shale rock by injecting water, sand and chemicals underground.
Gore’s comparison of carbon and subprime debt comes a month after a group of U.K. investors and environmental campaigners wrote to Bank of England Governor Mervyn King urging a probe into whether the U.K.’s holdings of investments in greenhouse gas-emitting industries poses a risk to financial stability.
U.K. Study
“There is clearly scope for further evaluation of these issues,” King wrote in his Feb. 1 reply, posted on the website of Climate Change Capital Ltd. “We will endeavor to include this in the list of topics we regularly discuss with market participants to assess whether or not this is a risk of which they are aware and the extent to which they are taking it into account in their investment decisions.”
The U.K. government in 2006 published a now widely cited study by its top climate economist at the time, Nicholas Stern, which said spending 1 percent of economic output on combating climate change could avert future expenses of between 5 percent and 20 percent of gross domestic product.
Gore and Blood said adoption of their proposals was necessary to restore public faith in capitalism, which they said had been eroded during the financial crisis, in which taxpayer funds were used to bail out banks and insurance companies.
“There are rather glaringly obvious problems with the way capitalism is operating today, in spite of its great virtues,” Gore said. “There are very big problems that should cause all participants in markets to think long and hard about how those problems can be remedied.”
--With assistance from Alex Morales in London. Editors: Steve Bailey, Robert L. Simison

A 123 trades for $1.20

For several years I have opined that A123 the lithium ion battery manufacturer will go to a flat line of zero electrical activity and that its share price will eventually reach the value implied in its name. That is $1.23 a share. Well today my forecast has come true. The Department of Entropy funded company is trading at $1.20 a share (AONE on the NASDAQ) based on the news that they produced $55 million of defective batteries that now must be replaced. Of course these defective batteries made their way into the Fisker cars that have failed on the road and even during the recent Consumer Reports road test. Fisker also received Department of Entropy funding in a pyramid scheme where AONE owned part of Fisker. The whole house of cards that Chu Chu built as the architect of green is collapsing rather rapidly. Mr. President if you have the guts to admit failure please fire Chu Chu !!

I can live with midgrade gasoline costing me $4.55 a gallon. I can live with cheese and meat costing over $20 a pound at the Whole Paycheck. I can live with Korea testing long range missiles. I can live with the Afghanis protesting how “little” we have done for them. I can live with the Greek economic crisis. But I cannot live with a dead battery in my pace maker! It is time for a new Secretary of Energy who need not have a Noble Prize in Physics but one who can actually avoid wasting billions of dollars that simply transfers wealth from the poor to the rich. Even Sam the Sham Bodman did not have the chutzpah to execute this level of massive wealth transfer with his hair brain hydrogen and ethanol ideas. Jimmy Carter was once a nuclear engineer and he really wants to help. Maybe Mr. President he can fill the role of Energy Secretary until Al Gore learns thermodynamics. By the way where is Al Gore we have not heard from him in a while. He might be hiding in a cave on the Afghanistan Pakistan border? I say we send a team of Navy Seals to find the slippery green eel.

Decoding the Coda

The latest electric vehicle to hit the store shelves here in California is the Coda. A few months back I compared the cost of a Coda to a Mercedes C320 and blogged that there was no comparison between the two cars and that I would buy the Mercedes hands down. Well Coda managed to lower their base price a little by using fewer batteries with a less amount of power stored and hence less range for the plug in heap of junk. The car now has 31 kilowatt hours of battery storage and a range of 88 miles in perfect weather with neither the heater nor the air conditioner operating. The Coda is brought to us courtesy of the republicans and without so called “Obama Money”. Hank the electron in the tank Paulson who was GW’s Secretary of the Treasury is an investor in Coda. Of course Coda tried to get Chu Chu to hand over hundreds of millions for the project to bring a Chinese electric vehicle to US. The company claims that the Coda is US produced as the finally assembly of the vehicle is done here in Northern California. Coda also states that the electric motor is made in the US and also inserted into the car in the final assembly here State side. The car will retail for something like $38,000 and perhaps some $4,000 is value added performed in the United States so I suggest we call the Coda a 10% US made vehicle that is targeted to serve 0.001% of the motorists out there. Good job Hank you will only lose private money on this endeavor.

I do have to applaud Coda for their honesty in setting their range. Unlike Tesla who flat out fib on their website about their range, Coda actually provides a calculator that does set the 88 mile range in real conditions. Maybe the Republicans do tell the truth? Mitt has finally asked Obama to fire Chu Chu and several other cabinet secretaries. Good job Mitt you must have read the Green Machine and now that you have basic thermodynamics etched in your sketched mind we are going to have a coherent energy policy if you win the upcoming election. As Steven Tyler said “dream on”.

Stealing the words of Steven that may well apply to the November election

“Half my life's
in books' written pages
Lived and learned from fools and from sages
You know it's true
All the things come back to you”

We have this blue and red State thing. Blue for Democratic and red for Republican. In Steve Tyler's mind there was a verse in the song Dream On that was dropped, and went as follows:

“Listen, dream on , dream on, dream on

Dream until the dream come true

Yea dream on, dream on, dream on

Dream until your body getting blue”

Perhaps when the slate is cleaned after the Republican primaries and Mitt can play etch a sketch with his policies, his body will be getting blue and his tilting to the right will swing like a pendulum to the left. As for Coda I think they will remain in Coda Blue even though their P&L statement will be perfectly red.