Green Tech

Gasoline prices this week reached a new record average of $4.02 per gallon, according to the AAA Fuel Gauge Report.

Two-thirds of Americans have already changed how much they drive due to high prices at the pump, according to a poll commissioned by Access America Travel Insurance and Assistance.

Seventy-four percent of those polled said they would drive less, once gas hits $4 per gallon. Eighty-five percent said $5 costs per gallon would motivate driving changes.

The median price to spark a shift in driving habits was $3.20 per gallon, which was near the average several months ago. Gas prices have risen by 29 percent in a year, according to the American Automobile Association.

However, 9 percent of respondents said no amount of sticker shock at the pump would change the way the drive.

To save money, 26 percent of people surveyed said they'd reduce recreational driving, and 21 percent said they would try to run multiple errands at once. Only 7 percent named carpooling as an option, followed by 6 percent claiming that they would walk or bicycle more.

Among the first people to adjust the way they get around are those in homes earning less than $50,000, as well as Southerners, parents of children younger than 18, and "those saying the country is headed on the wrong track," according to Access America. Public transportation was favored most by people earning less than $25,000.

The telephone survey of 1,000 adults was conducted by Ipsos Public Affairs between May 30 and June 2.

Soaring gas costs could bring a boost to the makers of hybrid cars and of electric vehicles, which remain in limited production.

Dealers report a short supply for hybrids, which people are waiting months to buy.

In January, 44 percent of respondents to a survey told trade group Hybrid Owners of America that they would consider buying a hybrid, once gas topped $4 per gallon.

Diesel, at $4.79 per gallon, costs even more than gasoline, according to the AAA.

Prices have also skyrocketed in the past year for biodiesel and other biofuels, which are increasingly demonized for driving up food prices. Waste vegetable oil, which restaurant owners used to beg green gearheads to haul away for free, is fetching high prices.

Web sites including GasBuddy.com help locate less-expensive gas- and diesel-filling stations.

Despite providing the largest portion of alternative fuel in the US, corn ethanol gets a lot of flack in the circles Cleantech Blog runs in. The usual culprits go something like this: Corn ethanol is heavily subsidized (yes it is). Corn ethanol does not reduce greenhouse gas emissions (sort of, it really, really depends on your assumptions). Corn ethanol contributes to the fertilizer driven "deadzone" in the Gulf of Mexico (maybe, another complicated topic). Corn ethanol drives up the price of food (a topic for another day).

But the main argument for supporting corn ethanol production has always been about energy independence and fuel switching. Enabling a new source of supply into our gasoline supply chain should in theory, put some some downward pressure on gasoline prices at the pump, and keep those energy dollars at home rather than send them overseas.

So the real question is, does it?

A very interesting paper was published at Iowa State last month says yes, US ethanol production (almost all from corn) has reduced gasoline prices at the pump $0.29-$0.40 per gallon, depending on the region. Further, that the reduction came largely at the expense of profits the refining industry would otherwise have made (indicating perhaps that our ethanol production helped US consumers at the pump, but did not impact world oil prices).

In their paper entitled The Impact of Ethanol Production on US and Regional Gasoline Prices and on the Profitability of the US Oil Refinery Industry, authors Xiaodong Xu and Dermot Hayes analyzed the impact on price at the pump and refining profits of adding ethanol to the US gasoline fleets by separating the impact of ethanol from the major variables like gasoline imports, refining capacity, refining utilization rates, hurricanes, market concentration in refining, stocks, and seasonality, that generally affect gasoline price.

I find their $0.29 to $0.40 per gallon results a surprisingly large number, indicating that ethanol production, while providing on average well less than 5% of our gasoline supplies over their study period, could have affected prices at the pump downward to the tune of greater than 2 to 3 times that percentage level. That result is a huge win for ethanol proponents, as it suggests that adding ethanol to the US fleet has significantly benefited consumers (as one would expect), and also suggests that the ethanol subsidy program (at about $0.40 per gallon for 5% of the US gasoline production works out to around a 1 to 2 cent effective tax on gasoline at current levels) may well have paid for itself up to 20x over or more. The studies authors are careful not extrapolate too much from the results, but they are certainly interesting enough to warrant significant further research, and argue a strong case for further corn ethanol support.

Neal Dikeman is a founding partner at Jane Capital Partners LLC, a boutique merchant bank advising strategic investors and startups in cleantech. He is founding contributor of Cleantech Blog, a Contributing Editor to Alt Energy Stocks, Chairman of Cleantech.org, and a blogger for CNET's Green Tech blog.

San Francisco may have shaken some flowers from its hair since hosting the first Earth Day 38 years ago, but the city continues to be named one of America's greenest. Satirists mock its politically correct "smug cloud" of eco-hipness, but many other regions tend to follow the city's environmental lead. For instance, more than a handful of U.S. cities are now mulling a ban on plastic grocery bags, first passed in San Francisco last March.

Fresh into his second term, San Francisco Mayor Gavin Newson in January set goals for the city to become carbon-neutral by 2020 by retooling laws and taxes related to energy, transportation, buildings, wildlife, waste, and environmental justice. He has come under fire for dedicating more than two dozen city jobs to fighting climate change. However, the mayor maintains that government can't be aggressive enough in cleaning up its part of the planet. Newsom discussed the promises and pitfalls of green technology with CNET at City Hall on Friday.

Q: You talked at the Cleantech Forum (last week) about how much work remains to be done, that we're "playing in the margins."
I was just down in L.A. talking to an environmental crowd and Indiana Jones, Harrison (Ford) was there. He was sort of the original celebrity on environment. Now everyone's trying to get on the cover of Vanity Fair. Right now we're almost seeing the movement increasingly trivialized by everything turning green...every single magazine and newspaper and TV program.

It's important and powerful because it raises awareness, but it misses the point that needs to be raised, one of accountability, transparency and measurement, the hard work that needs to be done. And it's not just buying organic cereal with a recycled tote bag. So when I talk in terms of (San Francisco's) 70 percent recycling rates, the highest in the nation, I feel good about that but not great.

When I talk about how we have the most aggressive green building standards of any city in the United States of America I feel good but not great.

When we think about what we've done a day or two ago, the solar incentives we just passed--it's really landmark--I feel good but not great.

When we do what we've done with plug-in hybrids or alternative fuel and biodiesel and hybrid buses--and partnerships with information communications and technology with Cisco--and all the things we've done on hybrid taxis and congestion pricing that we've been fancying, it just feels still in the margins.

I get a little nervous when I show up at these conferences and everyone's jumping all over me to give me their plans and talk in global terms. The 'what' is never measured, the 'how-to' is never measured. Everyone's got a plan. Who cares about these damn plans? What are you doing and how did you get there? How did you really roll back your (carbon dioxide) emissions?

It's great to have green building standards but how do you get (them) into those older buildings? It's more than just lights and tailpipes of the car. It is about deforestation, which is potentially 20 percent of the CO2 problem in the world. That's pretty profound, as much as the automobile and plane and travel CO2 problem.

A big study came out about (carbon emissions of raising) cattle and meat. At all these environmental events they're all eating meat and drinking bottled water.

Not at the Cleantech Forum.
Last night--I don't want to say which bottled water because they'll get offended, but it traveled a long way. How are we environmentalists when a billion of these go into our waste stream and they last 10,000 years? Plus, there's the environmental footprint of packaging this stuff, all the oil consumption of producing the bottled water, let alone transport it.

We say we have offsets and then I find out maybe that tree was never planted...That's why we're creating a local offset thing.

Shai Agassi is an old friend. He used to be at SAP and he's doing this incredible thing. He raised a couple hundred million bucks to take the entire country of Israel and take every single automobile out of the country, converting an entire country's fleet to electric vehicles. Now we're having a conversation about real change.

We're starting to make bolder advances on (tidal and wave energy). The plug-in hybrid commitment in terms of open orders, saying. "Look, we'll commit 250 vehicles. What will you commit Oakland, San Jose, Larkspur, Corte Madera, Greenbrae, Novato and Sonoma?" And how do we get the U.S. Congress of Mayors to say, "We'll (order) 100,000 plug-in hybrids to create a market?"

What other regions or cities in the United States or around the world are getting it right? If San Francisco's a leader, who are you looking to?
Look what Berlin's done on solar. I never see the sun in Berlin but Germany has leapfrogged us. With congestion pricing in Singapore, they're getting it right. Portland's doing some progressive things. In Chicago Mayor Daley's done a lot of wonderful things, like work on green roofs, really raising the bar, taking an old industrial city and really increasing awareness.

Austin's done some exciting things, and New York. What Mayor Bloomerg's offering is real exciting. Mayor Nickels in Seattle, what he's trying to do is connect the dots with our local climate plans.

What kinds of "green" things do you do in your life?
My last car was an electric car, I was one of those EV-1 sad souls. We watched it get stolen, or taken back, or returned to its owner GM, and destroyed.

My next new car is the Tesla, the new green one. I can't believe I spent that much money on a car. I did it purely for the technology, out of appreciation...I'm not sure if I want to be seen driving it.

The house is energy-efficient. I got rid of water bottles not just for the city--and plastic bags--but I do that at home...I buy offsets and couldn't figure out where they were going so we set up a local offset plan, to give it back to the city.

There have been so many efforts by mayors and other regional leaders to pick up where Washington has left off. What do you hope to see with the next administration (in Washington)?
I'd like to see a prolific foreign policy that goes like this: That we are going to be energy-independent in five years. That would be the most profound foreign policy commitment that would dominantly change the face of our planet.

How likely is that?
I don't think it is. I don't care who we've got. You could have Nader or Obama or whoever you want, I'm not convinced they can do that.

Look, Democrats were jumping up and down...on CAFE standards that get our miles per gallon up to where China has been in a few years, and that's great progress and historic? We've got some problems here. You've got to be kidding me. We're talking 30, 35 miles per gallon. Technology can get us to 125 miles per gallon on these plug-in hybrids today. It's real.

We've got the biggest plug-in hybrid fleet in America, by on--a whopping three vehicles. Three. That's embarrassing. To me the big game changer will be plug-in, if you can get on the grid. We have 65,000 vehicles a year the federal government purchases. As president, open order: all plug-in hybrids.

Do an executive order: We want all LEED Gold (ratings), not Silver, on every municipal building in the United States of America. We want a carbon tax to replace the payroll tax in this country.

That's fundamental today. You get serious about a massive investment, not $5 billion--although Hillary has been specific about (that), more than others--but even more massive R&D in green tech. Get serious about subsidies in solar, wind, tidal, geothermal exploration expansion.

That's how you start. Require every gas station in the United States to offer a menu of alternatives. A gas tax, ladies and gentlemen, yes a gas tax. There's the end of my political future. Now you're getting serious.

With the Bay Area being the epicenter of clean-tech start-ups, do you see any danger of a clean-tech bubble?
It's the third largest venture capital market. It's exciting, the promise, but I don't know if we've caught up to where the money is. I'm not sure if there's a bubble per se, but we might be overexuberant in all things green.

With new technologies there may come unanticipated side effects.
You're seeing that (with the growth of biofuels)--corn's gone up by X percent and we're hurting poor people.

What new technologies might give you pause and concern that down the road there may be harmful side effects?
We should encourage failure because that's how we learn.

Now we're talking about cellulosic ethanols, switchgrass. We're getting a little smarter about it so it's not corn-based. We may not have gotten there if we hadn't made a big mistake and gotten a little crazy on corn subsidies.

I love the debate. Five years ago, we had Gov. Schwarzenegger saying, "I want to do a hydrogen highway." I went out and drank out of the tailpipe. It didn't taste that great but it was trying to make the point that hydrogen's the future. That doesn't look like it makes any sense now. But it was exciting.

Environmental justice was one of the key items on your roadmap last month. The Bay Area is an extremely expensive place to live. What kinds of things could be done here?
The key is workforce training. As we spend all this VC money, we have billions of dollars, disproportionate up here in Northern California. Where's that money going? Who's the beneficiary? Who are the folks on the frontlines? Green-collar could replace that blue-collar job that's outsourced. Someone's got to install it, someone's got to install it here.

We're doing it with our City Build Academy, with our partners in community colleges really focusing on clean tech.

I want to create new tax incentives for businesses that hire folks coming out in these green-tech fields, not just a payroll tax incentive if you're a green-tech company, but specific credits...with heavy recruitment, emphasis, heavy focus, getting it in the high schools....I work with Van Jones, he's just the best on these things.

Four out of five toxic waste dumps are in African-American neighborhoods in this country. Even in San Francisco, where's our sewage treatment plant, our power plant? Where is the shipyard and all the contaminants?...It's an outrage.

The fact that you go (out) to dinner tonight, the meal has traveled 1,800 miles to get to your plate, is ridiculous in agriculture-rich northern California. We've got to create a narrative of health and well-being, you know, with edible schoolyards, and getting our kids good salad bars this year.

What do you wish reporters would ask more about? You talk about running the numbers.
Even people like me, I don't believe some of my own numbers. It's not as if it's intentional. It's not as if my folks are just making it up--they're not.

We had this whole focus on cap and trade. You can't have a cap-and-trade system unless you have measured what you're going to trade and cap, and how you independently determine with veracity what you're admitting. There are a lot of fits and starts but how do you aggregate it?

There's the California Climate (Action) Registry and we're the first city to participate. It's not perfect but it's a great start.

(You should) say, look: "I'm impressed that you came up with a global climate action plan in 2008. Now show me the implementation plan."

We've got to walk our talk and support these emerging economies in leapfrog technologies so they don't make the same mistakes we did. But we can't do it with a straight face unless we demonstrate leadership, and this country has not.

(China is) building these green cities that are completely 100 percent net neutral carbon, hell, with some generating energy. They've still got too many power plants, too many cars now but in many respects they are leading.

With threats looming of stagflation and global recession, what role could Silicon Valley play?
What's the primary force of inflation right now? It's gas, oil. I mean, jeez, if you want to deal with stagflation, get back to the energy independence thing and not $102 dollars per gallon.

You want to deal with stagflation, then let's get serious around sustainability, about building homes where energy costs are not higher, they're lower, so people can stay in their homes even when their mortgage goes up.

To play devil's advocate, even at the Cleantech Forum some people were saying, "Maybe global warming isn't happening." If it's not true, then what good is all of this new technology?
Why should we breathe the fumes of other people's cars? Why not clean the air? Even if there's not global warming, there's an inherent benefit that accrues in terms of health care costs. Taxpayers are all the beneficiaries.

Why wouldn't we do green buildings to reduce our energy costs? Do we like not being able to develop on Hunter's Point Shipyard? Why wouldn't we want to invest in technologies to clean up toxic waste so that at least we can create an economic stimulus and take back some of those problems?

There's nothing we're doing that we shouldn't be doing anyway. Period.

What kind of gadgets do you have?
The only thing I have is an iPod, which is my iPhone, for no other reason than I really think it's cool. I used to have a BlackBerry but then the press sunshined my e-mails. I got rid of it: no computer, no BlackBerry.

We had everything exaggerated with the Wi-Fi thing with Google. On the front page of the newspaper was the actual e-mails between Google and myself. It was horrible. Now they won't e-mail back here, I can't even communicate, it was that bad..

Are you going to get a Macbook Air?
I am. I want that.

MENLO PARK, Calif.--The global rise in power consumption isn't bad for all species, it turns out.

Sun Microsystems is seeing increased customer interest in its Sun Ray, a thin desktop client, as electricity prices climb, said Subodh Bapat, vice president and chief engineer in the Eco Responsibility office at Sun. Bapat's comments came in a presentation during Sun's global media day taking place Wednesday.

Thin clients like the Sun Ray consume far less electricity than conventional desktops, he said. A Sun Ray on a desktop might consume 4 to 8 watts of power. That's because most of the heavy computation is performed by a server. (An individual server, meanwhile, can handle 10 to 50 thin clients, depending on the application they are being used for.) By contrast, a desktop might consume 100 to 150 watts of power, he claimed.

PC makers might argue with the scope of the difference, but PCs do have more powerful processors as well as hard drives, something thin clients don't have. Thus, PCs invariably are going to consume a substantially larger amount of power. New, more stringent Energy Star specs say that desktops need to consume 50 watts or less in idle mode to qualify for Energy Star certification.

The price of electricity, meanwhile has been steadily rising 13 to 14 percent per year during the decade, Bapat said. In 2000, electricity cost 2 to 3 cents a kilowatt-hour in 2000. Now it goes for 11 cents or more a kilowatt-hour in many locations, and in places like Japan, power costs far more. In the past, this was overlooked.

"In the past, people really haven't factored in power in TCO (total cost of ownership) calculations," he said.

Thin clients also last longer. "You only have to replace it every 80 years. It is more eco-friendly than a PC," he said. "It doesn't get obsolete as fast." PCs get replaced on average in 4 to 5 years. Mandatory fees for electronic recycling--which many states are contemplating--could thus add some luster to thin clients.

Sun, among other companies, has been touting thin clients as alternatives to PCs for over a decade. First, thin client backers touted the machines as cheaper, easier-to-manage systems--then later, as a way to undermine Microsoft. (Attention, old timers: remember the Javastation?) PCs, however, continued to come down in price, eroding the appeal of alternatives. Some early thin clients also didn't provide fantastic performance. While many companies have adopted thin clients for retail stores or repair shops, the PC still rules in most offices and homes. Chances are you're reading this on a PC.

Like other computer makers, Sun also has a host of energy-efficiency initiatives under way: processors that consume less power than predecessors or competitors, data center design services, or virtualization to make individual servers do more work per watt, etc.

One interesting factoid: data center owners such as Google are building data centers in places where power is cheap. A decade ago, the main consideration was where broadband would be cheapest, he said. Current data centers, he added, can take up 500,000 square feet of floor space and require 40 to 50 megawatts of power.

By 2010, Wal-Mart and its suppliers are going to be a lot more energy efficient.

The retailing giant has set a goal of getting suppliers to increase the energy efficiency of its products by 25 percent in three years. For some suppliers, the standards are a little more stringent. By 2010, the company will only sell Energy Star-rated air conditioners. Flat panel TVs will have to be 30 percent more energy efficient than they are now.

"If we achieved our 25 percent goal just in the U.S. we would save enough electricity to power 3 million homes per year or the equivalent of 10 million barrels of oil," said CEO Lee Scott in a speech to employees earlier this week. "We do not know exactly how we will get there. We do not even now if our suppliers can make times like hair dryers that user 25 percent less energy. But we do know that our approach works--to partner with suppliers, to help customers make better decisions, and to use our business model to drive out waste."

The company might also start building charging stations (powered by solar panels) so that customers can charge up their plug-in hybrids or electric cars, Scott said. General Motors has been working with Wal-Mart to install ethanol pumps, which ordinary gas stations recoil from. Families in the U.S., he asserted, spend on average 17 percent of their income on energy.

Wal-Mart has been one of the leaders among large corporations to cut its carbon footprint. The company, for instance, has tested out solar lighting and electricity at certain stores and is swapping out conventional lights for LEDs in freezer cases. It saved a $1 million a year in power bills just by taking out the light bulbs in coke machines.

It has also encouraged suppliers to change their packaging and distribution techniques to cut energy consumption as well. Wal-Mart's mandates don't work. A few years ago it told suppliers to start using RFID tags or else, and only some have. Still, the company can have a big impact because of the sheer number of products that flow through its doors.

The company's also not shy about telling its suppliers about its goals. "We will favor--and in some cases even pay more--for suppliers that meet our standards and share our commitment to quality and sustainability," Scott said.

Wal-Mart, he further added, will also try to keep the price of energy-efficient cost-competitive with standard products. The company, for instance, cut the price of some 3M air filters by $2.

"Our goal is to double the sale of products that help make home more energy efficient," he said.

Consumers won't pay more for cars that would meet new, stricter emissions standards.

That was the message sent last week by Susan Docherty, Western Region general manager of General Motors, as a handful of automotive journalists (including yours truly) sat scattered at a very large table in a private room in the back of one of Santa Monica's poshest hotel restaurants during a GM-sponsored holiday dinner.

The proclamation erupted out of a somewhat heated debate with one of the print journalists at the table, sparked in part by news that a U.S. District Judge had dismissed a lawsuit filed by automakers over a California law that would require car manufacturers to reduce new car emissions over the next several years.

The statement was especially curious coming from someone who had worked for one of the most expensive automotive brands in the U.S. Prior to her previous position, Docherty worked as head of marketing and sales for Hummer. According to her biography, her launch of the H3 increased Hummer's sales by more than 70 percent. If there are obviously plenty of people who will pay more than $30,000 for SUVs that get 13 miles per gallon in the city, why wouldn't there be a market for a $30,000 midsize car that gets 40 miles per gallon (or better)?

Some of us aren't so quick to underestimate the increasing savvy of the American consumer. While there are still people who will buy the biggest vehicles they can afford without regard to long-term consequences, the average car buyer is getting smarter. Even putting questions of social responsibility aside, basic economics tell us that the financial implication of buying a car goes far beyond the sticker price; it's about the overall cost of ownership. And we think you get that.

What do you think?