Is Occupy Wall St. Occupying the Wrong Street?

By Elisa Wood
October 26, 2011

My Dad and I have a running joke when we’re in the car together. “Look,” he’ll say. “Gas is cheap. It’s down to $3.39.” Cheap, he means, compared with the month before when it was $3.79 per gallon.

The joke illustrates a good point. A few years ago we were flabbergasted by gasoline prices that exceeded $3 per gallon. Now we’re really happy when it doesn’t hit $4 per gallon.

When it comes to energy, we’re like frogs in water coming to a slow boil. We’ve gotten so accustomed to high oil prices, we don’t notice anymore that we’re cooked.

In my two decades writing about energy, this is one of the most poignant facts I’ve run across: Oil price spikes preceded 10 of our 11 last recessions. This statistic portrays in a nutshell the grip that petroleum holds on us.

Don’t get me wrong, I’m not letting the banks off the hook. But by focusing so much passion on the banks in casting blame for today’s economic downturn, is Occupy Wall Street letting a major culprit slink off unnoticed down the alley?

The Econbowser.com, source of the 10 out of 11 stat, says that in 2008 high oil prices caused a drop in overall spending, which served as “the knockout punch for an economy that was already wobbly.” The article goes on to say that “there’s no question that more favorable fundamentals are exactly what we would have had if the price of oil had never gone over $100 a barrel.”

But there’s good news too. When oil prices are high, the innovators emerge. And that’s what is happening today. Over the last few months I’ve run into some pretty intriguing – possibly game changing – new energy technologies. Here are a few.

This week I interviewed Riggs Eckleberry, CEO or OriginOil, a company that has found a highly efficient way to harvest algae and extract its oil, a process that takes advantage of algae’s sensitivity to electrical fields. The approach promises to save both energy and water in processing algae. As Eckleberry puts it, algae is a renewable “petroleum that is being made fresh instead of fossilized.” He sees algae becoming an important part of the energy mix in the short-term and a serious competitor to petroleum in the long term.

In working on an article for an upcoming issue of Renewable Energy World magazine, I learned about Dyesol, an Australian company that uses dye sensitive solar products to generate electricity. Dyesol describes the process as ‘artificial photosynthesis.’ It uses an electrolyte, in this case a layer of titania (a pigment used in white paints and tooth paste) and ruthenium dye sandwiched between glass in a window. Light strikes the dye and excites electrons that are absorbed by the titania to become an electric current many times stronger than that found in plant photosynthesis. The window creates electricity using both the artificial light in the building and the sunshine outdoors.

Meanwhile, Swapnil Shah, CEO of FirstFuel, described to me how his company conducts in-depth energy audits on commercial buildings without ever setting foot in the building. FirstFuel’s analytics software offers a “zero touch” alternative to cumbersome building energy audits. Already being used by several utilities, the software program also provides specific recommendations for efficiency improvements. To run its analytics, FirstFuel only requires easily accessible information about the building, such as its billing history and address. The program relies on the Web and GPS to obtain the rest of the data it needs. (More on FirstFuel in next week’s blog.)

Innovators like these folks worry that when oil prices drop, investors and policymakers will lose interest in finding energy alternatives. It’s a pattern we’ve fallen into before. Just as high oil prices precede recessions, low oil prices precede periods of apathy. Maybe we’ve been cooked enough this time to reverse the pattern.

The plug instead of the pump: Will the electric car put money in your pocket?

By Elisa Wood

April 15, 2010

For consumers, discussion of electric cars tends to focus on how long the vehicle travels before needing a recharge and what it will cost to buy. But a new report backed by several large corporations takes a broader view of what the electric car will mean to our overall finances.

And the news is good.

Fueling our cars with electricity instead of gasoline – this one change – could avert a lot of economic pain, according to “Economic Impact of the Electrification Roadmap” by the Electrification Council.

The council, which includes NRG Energy, CISCO, PG&E, Nissan Motor, Fedex and other major companies, wants to see us drive electric cars by 2040 for 75 percent of the miles we travel.

In pursing this target, we could reduce our federal debt by $336 million, increase cumulative household income $4.6 trillion, improve our trade balance by $127 billion and add 1.9 million jobs by 2030, says the report.

How can an electric car do all of this? Our use of oil would fall dramatically, and we’d be spared the sharp financial blows we now experience when oil prices spike.

“Probably the single most important conclusion of the study is that by substantially reducing America’s oil dependence, the economy will be much better prepared to withstand a future oil shock such as those that contributed to recessions in 1973–74, 1980–81, 1991, 2000–01 and 2007–09. That is, the policy package can be thought of as a self-financing insurance policy that will make the economy more robust in good times and more resilient when subjected to energy shocks,” says a letter introducing the report by Robert Wescott, president, Keybridge Research and Jeffrey Werling of the University of Maryland’s Department of Economics.

The report envisions electric vehicle use reducing US foreign oil imports by 11.9 billion between 2010 and 2030. To put this number in perspective, the nation’s total proved reserves are slightly less than 30 billion barrels.

World demand for oil would fall, leading to lower oil prices, putting more money in our pockets. It’s also a lot cheaper to run a car on electricity than gasoline, about 2.5 cents/mile for an electric vehicle compared with 10 cents/mile for a combustion engine, says the report.

David Crane, NRG Energy president and CEO, says the electric vehicle represents the “next great tectonic shift in our economy, one that will transform the way we use energy both in our homes and on the road.”

The report doesn’t bring up the bad news. Bad news, that is, if the goal is to reduce carbon dioxide emissions. The US now gets about 50% of its electricity from coal, and the US Energy Information Administration does not forecast much change in coal’s dominant position over the next two decades, even with today’s rapid injection of renewable energy into the system.

The full report is available at http://electrificationcoalition.org/.

Visit Elisa Wood at http://www.realenergywriters.com/ and pick up her free Energy Efficiency Markets podcast and newsletter.

Energy Efficiency: Not a Sound Bite Business

By Elisa Wood

I’m a star at the neighborhood playground because I write about energy. Let me explain. I have a young son, and often find myself next to the swings talking with other parents. Inevitably we talk about work. Inevitably it comes up that I know a little about energy. And inevitably I'm surrounded by a crowd that wants to know-- demands to know--why the US doesn’t use more green energy.

They are looking for a sound bite answer, like “It is Bush’s fault” or “Exxon is evil.” Instead, I find myself grasping for an answer, even though I’ve been following this business for 20 years -- or more accurately – because I’ve been following this business for 20 years.

Overhauling a nation’s energy infrastructure is no easy task and far more complex than people realize. And unfortunately, this lack of understanding, among politicians and the general public, is what gets us into trouble. Since the 1970s, we have swung back and forth from urgency to complacency about energy independence. We forget about the problems created by our over-dependence on fossil fuels once gasoline prices drop. We seem to operate under the false impression we can fix our energy problems near instantly should we really need to act.

A new World Bank book underscores the complexity of revamping energy infrastructure, in this case, energy efficiency in three countries where demand is growing rapidly. Called “Financing Energy Efficiency: Lessons from Brazil, China, India and Beyond,” the book finds enormous energy savings opportunities in these countries, which are among the top 10 energy consumers in the word. But to realize the savings, the countries must develop “large numbers of relatively small projects scattered among hundreds of thousands of industries and building complexes.”

Needless to say, the logistics are daunting. Moreover, efficiency projects tend to lose when competing for up-front capital against power plants because efficiency is about saving money – a more difficult concept to sell than making money.

But interestingly, it is not lack of capital in these countries that thwarts efficiency but “inadequate organizational and institutional systems for developing projects and accessing funds.” In other words, efficiency is not on the main agenda of business and government.

The challenge for governments is to influence the broad technology choice decisions of investors and encourage them to adopt energy efficiency solutions, according to the book. The problem, the authors say, needs to be fixed on the institutional level and must consider the unique local economies. The book attempts to provide a framework for creating financing systems.

With many case studies on ways efficiency has been financed in various countries, this nearly 300-page book makes it no easier to come up with a quick sound bite for why it is a struggle to green our energy supply. But the authors do give some valuable industry perspective on how to get there as the world prepares for a 53% increase in energy demand over the next two decades. It is worth a look. Written by Robert P. Taylor, Chandrasekar Govindarajalu, Jeremy Levin, Anke S. Meyer and William A. Ward, the publication is available at http://www.esmap.org/filez/pubs/211200830655_financing_energy_efficiency.pdf

Visit energy writer Elisa Wood at www.realenergywriters.com and pick up her free Energy Efficiency Markets newsletter.