Domestic Fuel

Sen. Chuck Grassley (R-IA) is hoping to avoid a vote in the Senate on the amendment introduced last week by Sen. Tom Coburn (R-OK) that would repeal the Volumetric Ethanol Excise Tax Credit (VEETC).

Grassley said today during his weekly agricultural media conference call that there are two ways the vote can be avoided. “Either talking him out of it, or denying unanimous consent to bring it up, and I think we can do the latter,” he said. Grassley say he is trying to “reason with” Coburn and urge him to take up the issue within the context of energy legislation so to “have ethanol be viewed as part of an overall energy program” instead of having it be part of the spending bill debate.

According to Grassley, Coburn says he has 55 votes. “He probably needs 60 votes. I think we can probably keep him from getting 60 votes. But, quite frankly, I don’t want anybody on record, if we can avoid it, on the ethanol issue until we get down to discussing it as part of the energy debate.”

Listen to Grassley’s comments in answer to a question by Dan Looker of Successful Farming. Sen. Grassley

Meanwhile, as the future of the VEETC remains unsure in Congress, ethanol interests are reportedly in negotiations on a proposal for moving beyond the VEETC. According to DTN/The Progressive Farmer, representatives from the American Coalition for Ethanol, Growth Energy, National Corn Growers Association and Renewable Fuels Association have been working on a compromise proposal this week, getting input from lawmakers in Washington.

The Environmental Protection Agency (EPA) has named Washington D.C. as the leading EPA Green Power Community. Combined, government, businesses, institutions, and residents in the nation’s capital are collectively purchasing nearly 756 million kilowatt-hours (kWh) of green power each year. This is enough to meet 8 percent of the city’s total electricity use. All voluntary, this feat catapulted the city into the number one spot in the country on EPA’s rankings.

District leaders kicked off a District Green Power Challenge today during the District’s EPA Green Power Recognition Ceremony that was held at Phelps Career High School in northeast DC to encourage more residents and businesses to switch to green power. The first goal of the challenge is to increase citywide green power purchases by 33 percent by August 31 of this year in hopes of keeping their #1 ranking. This increase would also mean that the city’s electricity users are purchasing 10 percent from green power or 1 Billion kWh each year.

“This is a huge honor for Washington, D.C. and we are proud to be recognized by the U.S. Environmental Protection Agency,” said Mayor Vincent Gray. “The purchase of green power by our citizens and businesses is cleaning our air and supporting growth of the clean energy economy. When we clean the air, we improve the health of our residents, and particularly our children. We are sending a message to other communities across the country that supporting clean power is a sound business decision and the right thing to do. I’m proud that the District of Columbia government is leading the way, purchasing 50 percent of our electricity through the Washington Gas Energy Services, Inc. wind power program.”

There are currently 36 Green Power Communities across the country. To be given the designation, a city, town or village must have government, business and residents that commit to purchasing green power in amounts that meet or exceed EPA’s Green Power Community purchase requirements. Qualifying energy sources include wind, solar, geothermal, biogas, biomass, and low-impact hydro-electric power.

“The District of Columbia is setting an excellent example for the nation by harnessing clean energy,” said Elizabeth Craig, Acting Director of EPA’s Office of Atmospheric Programs. “We hope the city will continue to increase its use of green power and that other communities will follow suit.”

Canada is now the home to a giant renewable energy company. Vancouver-based Magma Energy, a geothermal company, has purchased wind, solar and hydro energy company Plutonic Power, also based in Vancouver, to form Alterra Power Corp. The deal is worth around $190 million but when the two companies are combined, their net worth is estimated to be worth $575 million.

In a financial analyst call this week, Ross Beaty, Magma’s Chairman and CEO said that “size matters” and “the power business is all about the cost of capital.”

In a press statement Beaty commented, “This merger will strengthen both companies and will create a larger, more diversified renewable energy company with assets across a broader spectrum of the clean energy industry. It has the potential to lower the cost of capital to develop each company’s existing growth assets, to enable those assets to be developed more quickly, and to better attract new opportunities for future development. Geothermal will remain a core focus of the new company, but hydro, wind and solar assets will be solid business platforms for future growth. In the renewable energy business, bigger is better and this combination will achieve that while enhancing returns to each company’s shareholders.”

The new company, Alterra Power Corp, intends to develop new energy sources either within Canada or globally, whatever projects will provide the best return on investment for shareholders. Magma already operates projects in the U.S., Iceland, and Latin America while Plutonic has wind projects in Canada and is looking to acquire some solar projects in the U.S.

Donald McInnes, Plutonic’s Vice-Chairman and CEO said, “2010 was a breakout year for Plutonic having completed the transition into an operating company. To continue to build on the success of our history as a project developer, a merger with Magma will provide our shareholders with the best path to further value creation achieved through a larger market size, greater liquidity, better access to capital, and diversity of geography and technology with a healthy development pipeline that provides significant growth opportunities.”

In conjunction with General Electric (CE), Plutonic Power operates Canada’s largest wind farm, the Dokie Wind project. Under a 25 year Electricity Purchase Agreement with BC Hydro, the now fully operational wind farm will is expected to generate 320,000-340,000 MWh per year – enough energy to power about 34,000 homes. It is comprised of 43 wind turbines and located in the foothills of the Canadian Rocky Mountains. As part of the project, Plutonic Power also built seven kilometres of transmission lines and an electric substation.

According to a new report from Pike Research, “Geothermal Power,” geothermal capacity could double in 10 years. The report concludes that increasing investment in geothermal power could result in a 134 percent increase in total geothermal power between 2010-2020. In other words, an increase from 10.7 gigawatts (GW) to 25.1 GW worldwide when based on a high-growth scenario. Using a more moderate growth scenario closer to the current rate of growth, the report estimates capacity would increase 34 percent to 14.3 GW by 2020. Geothermal energy offers many benefits including the ability to provide almost 24 hour per day electricity production with little to no emissions.

“Worldwide potential for geothermal energy is immense but geothermal remains an underutilized resource and represents only a small fraction of the global renewable energy portfolio,” said senior analyst Peter Asmus. “Improved access to resource data, more efficient drilling processes, increased understanding about the industry’s potential, and improving access to financing are driving expanding interest in the sector.”

According to Asmus, the current geothermal capacity is spread across 26 countries with a combined output of nearly 67 terawatt hours (TWh) of electricity. The U.S. is the global leader with 3.1 GW of installed capacity while seven countries represent 88 percent of the global geothermal capacity. Although traditional geothermal resources make up the majority of installed capacity, enhanced geothermal systems (EGS) and co-produced wells both offer opportunities for expansion.

The high-growth scenario used in the study assumes continued and persistent volatility in the price of oil, tightening carbon regulations, improved access to capital, standardization of geothermal exploration data, contribution from EGS-enabled and co-produced resources, technological breakthroughs in exploration and drilling equipment, improved access to drills and skilled labor, and sustained policies supporting renewable energy mandates, grants, and tax subsidies.

Asmus added, “Even if progress falls short in these areas the potential for geothermal market expansion remains strong, and even our conservative business-as-usual forecast is consistent with growth rates observed in the industry since 1990.”

Two, four, six, eight, who do we love to hate? The oil companies!

Despite my story lead, I was not a cheerleader in another life but I couldn’t get that cheer out of my head while I read this week’s book, “Why We Hate The Oil Companies Straight Talk From An Energy Insider,” by John Hofmeister. I recently gave Mr. Hofmeister some ink when he predicted that the country would see $5 per gallon of gas within the next 10 years so I thought, hey, I should read his book. See what’s he’s all about. He is, after all, the former president of Shell Oil Company.

What is Hofmeister all about? Bringing affordable, clean and sustainable energy to all Americans. He writes, “The truth is that affordable energy is essential for American economic growth. It is essential for our national security and position in world leadership. And it is necessary to maintain our quality of life.” He continues by saying affordable energy and environmental sustainability are challenges that require immediate attention.

Who is in charge of leading the way to affordable energy?  The oil and utility companies? Government? American Citizens? The answer is not so black and white as Hofmeister explains. No one believes the oil companies – they are ranked 24 out of 24 in the industry “Who do you trust” poll and the government is ranked at 22. Not swell by any standards. Then we have American citizens who have been fed “information, misinformation and no information” and they are still electing politicians who have spent 40 years not making good energy policy decisions. We Americans have bad voting histories.

So what do we have? Hofmeister says “there is an energy shortage, but there is no shortage of energy.”
Read the rest of this post…

According to an analysis performed by Battelle Memorial Institute and R&D Magazine, the global research and development (R&D) outlook for 2011 will be more stable and positive and is emerging from one of the worst recession eras in recent times. With this in mind, R&D managers are prepared to see moderate, but sustainable growth and more global competition for resources and market share.

In more tangible terms, R&D spending is expected to increase by 3.6 percent in 2011 to $1.2 trillion; however, in the U.S. this number is only expected to climb by 2.4 percent over the 2010 numbers reaching just over $405 billion in 2011. Regardless of a number that appears to be minor, the U.S. is positioned to be the dominate region for research and investment.

When you hone in on energy R&D, the report notes that in this category, overall R&D budgets are low compared to the percent of R&D versus revenues of companies in other categories. The companies spending the most in R&D are: Exxon Mobil, Chevron, ConocoPhillips, USEC, First Solar, Cree, McDermott International, A123, SunPower, and FuelCell Energy.

The authors write, “Unlike defense, outcomes and benefits from federal energy research are realized largely in the private sector. Moreover, DOE’s research investment fills a critical gap in private sector innovation capacity. The relatively low level of R&D spending in the regulated, capital-intensive energy sector is unlikely to achieve the affordable, abundant, sustainable, secure energy supply that will be necessary for the U.S. to maintain global economic leadership in this century.”

“At the same time, public-private collaboration and commercialization are necessary to deploy energy innovation at scale, since the government controls little energy production or distribution capacity (except fossil reserves on federal lands).”

The conclusion in this sector by the report authors is that the private sector lacks the full scope of resources to accomplish the necessary research that is required to meet the demand for sustainable and affordable energy. They also note that the government lacks the means to deploy energy innovation at scale to meet policy goals and stresses that collaboration and commercialization are essential to see success.

You can download a copy of the 2011 Global Funding R&D Forecast here.

Private funds have been difficult to secure in the U.S. for clean energy programs for the past year; however, on a global scale, private investments in G-20 clean power projects could total more than $2.3 trillion by the end of this decade alone. This figure was released as part of a new report from the Pew Charitable Trusts this month: Global Clean Power: A $2.3 Trillion Opportunity. The majority of investments will be made in Asia, led by China and India, as driven by massive energy demand and strong clean energy policies. However, the report continues, by countries adopting such policies, every G-20 member has an opportunity to attract more private funds in clean power projects and compete more effectively for business.

The report examined projected private investment in wind, solar, biomass/energy from waste, small hydro, geothermal and marine energy projects. To predict the levels of private investments into projects, the report modeled three policy scenarios to determine future growth through 2020:

• * Business-as-usual – no change from current policies: total investment projected to be $1.7 trillion by 2020
• * Copenhagen – policies to implement the pledges made at the 2009 international climate negotiations in Copenhagen: total investment projected to be $1.8 trillion
• * Enhanced clean energy – maximized policies designed to stimulate increased investment and capacity additions – total investment projected to be $2.3 trillion

“The message of this report is clear: countries that want to maximize private investments, spur job creation, invigorate manufacturing and seize export opportunities should strengthen their clean energy policies,” said Phyllis Cuttino, director of the Pew Climate and Energy program.

The report found that the clean energy sector continues to be an immense economic opportunity and Asia became the top regional destination for clean power finance in 2010. Within the region, China and India are leading the way (in all energy demand, not just clean energy demand) and by 2020, the report anticipates that 40 percent of global clean power project investments will be made in China, India, Japan, and South Korea.

Michael Liebreich, CEO of Bloomberg New Energy Finance, the company that compiled the underlying data for the report said, “Strong and consistent policies in Asia have helped double private investment over the past two years. Asia is now the leading region for clean energy investment, and its lead is set to extend in the near future unless Europe and the US make a step change in their support for the sector.”

While the U.S. is currently lagging far behind in private investments in clean energy, the report found that they are among those with the most to gain from passing strong clean energy policies. The report cites an example that says the U.S. has the potential to attract $342 billion in clean power project investments over the next 10 years under the Enhanced clean energy scenario.

You can download a copy of Global Clean Power: A $2.3 Trillion Opportunity here.

The U.S. Department of Energy (DOE) has drummed up $20M in funding for seven geothermal projects that will focus on technical and economic feasibility of unconventional geothermal energy technologies. The seven companies awarded funding include Energent Corporation, GreenFire Energy, Modoc Contracting, Oski Energy, ElectraTherm, Louisiana Geothermal, and NRG Energy. Each of these companies will be focused on one of three core areas: low temperature fluids, geothermal fluids recovered from oil and gas wells, and highly pressurized geothermal fluids.

In a statement, U.S. Energy Secretary Steven Chu said, “These innovative projects have the potential to expand the use of geothermal energy to more areas around the country. The development of these technologies will allow us to tap into additional renewable energy resources, reduce carbon pollution and create new jobs.”

Chu hopes that these research projects will help lower the cost of geothermal energy and help make the operational deployment of low temperature geothermal units more economical.

Earlier this month, the 25x’25 Alliance released a progress report on where the nation is in terms of the goal of meeting 25 percent of our energy needs with renewable resources by 2025, and they held a press conference with representatives of all the major renewable energy sectors to talk about the report and what still needs to be done.

In this edition of the Domestic Fuel Cast, we will hear from each of those representatives – Tom Buis with ethanol group Growth Energy; Bob Cleaves of the Biomass Power Association; Brad Collins with the American Solar Energy Society; Karl Gawell from the Geothermal Energy Association; and Rob Gramlich with the American Wind Energy Association – as well as 25x’25 steering committee co-chairman Reid Smith.

Listen to the Domestic Fuel Cast here. Domestic Fuel Cast

You can also subscribe to the DomesticFuel Cast here.

A new report says America’s warfighters are leaders in the use of alternative fuels.

This story from ExecutiveGov.com says a Pew Charitable Trust report has good news about the U.S. Department of Defense’s use of solar, geothermal and biodiesel:

According to [Phyllis Cuttino, director of Pew Charitable Trusts’ climate and energy programs], DoD accounts for 80 percent of the U.S. government’s energy consumption, which amounts to 330,000 barrels of oil and 3.8 billion kilowatts of electricity per day for more than 500 major military installations. However, she said, the department is working to meet its stated goal of having one-fourth of its energy come from renewable sources by 2025.

Additional examples of how the Navy is going green include developing a carrier strike group that will run completely on alternative fuels; powering the Naval Air Weapons Station China Lake by geothermal sources; and commissioning the USS Makin Island, a large-deck amphibious ship propelled by both gas and electric engines.

And don’t forget, it was just last month that the Air Force flew for the first time an A-10 Thunderbolt II, better known as the Warthog, on a biomass-based jet fuel.

“When do we stop investing in OPEC and start investing in America?”

That’s the question that oil tycoon T. Boone Pickens asked at a House Ways and Means committee hearing Wednesday on “Energy Tax Incentives Driving the Green Job Economy.” Pickens told the panel that he’s for “anything that’s American” when it comes to energy -including wind, coal, solar, hydro, nuclear, geo-thermal, ethanol, propane, or natural gas.

The straight-talking Texan and chairman of BP Capital Management addressed those who discourage tax incentives for renewable energy on the basis of letting the free market work. “If you think OPEC is a free market, you’re a sap,” he said.

Pushing natural gas as an alternative, Pickens said that skeptics say there is no natural gas fueling infrastructure. “If you create the market, the private sector will build it,” he said. “Can you imagine what would have happened if we had told Henry Ford, forget about building the Model T, there’s no filling stations?”

Pickens strongly stressed the need for America to develop an energy plan now. “I’m running out of time, I’m 82 years old next month, and I’ve got to get an energy plan fixed for America because we cannot leave this to generations in the future,” noting his 13 children and grandchildren.

Pickens’ whole opening statement is well worth watching here on the Ways and Means Committee website.

According to a new report from the Geothermal Energy Association (GEA), geothermal energy showed 26 percent growth in new projects under development in 2009 in the US. According to the new report, “2010 US Geothermal Power Production and Development Update,” 188 projects are underway in 15 states which could eventually produce as much as 7,875 MW of new electric power per year. Nevada is leading the way with over 3,000 MW under development. Other fast growing states include Utah, New Mexico, Idaho, and Oregon with Louisiana, Mississippi and Texas all reporting their first geothermal projects.

“Geothermal power can be a critical part of the answer to global warming,” said GEA’s Executive Director, Karl Gawell. “For example, California could achieve its 2020 goal for global warming emissions reductions just by keeping energy demand level and replacing its coal-fired generation with geothermal.”

Once these projects are completed, they will add over 7,000 MW of baseload power capacity, which is enough to provide electricity for 7.6 million people, or 20 percent of California’s total power needs. This is also roughly the amount of total power used in California from coal-fired power plants.

“These geothermal power projects will create substantial sources of new employment across the country,” said Gawell. “Not only are we seeing more and more development and hiring in places with a long history of geothermal like Nevada and California, but for the first time these jobs are being created in the Gulf Coast, in states such as Louisiana and Mississippi. Along with a huge number of new construction jobs, geothermal power also creates many permanent positions that can never be outsourced.”

Together, the direct, indirect and induced employment created by these projects is estimated by GEA to be 29,750 permanent jobs and 112,000 person-years of construction and manufacturing employment. In addition, the projects under development will represent capital investment of more than $35 billion when completed. The full report is available by clicking here.

Farmers and small business have found a crop to make them more money – clean energy. This according to a recent report from the Environmental Lay & Policy Center (ELPC) which just released “Farm Energy Success Stories” that demonstrate how a farm or small rural business adopted clean energy technologies and cut energy costs. Examples cited in the report include a Montana brewery that runs on solar power and an Illinois dairy that generates electricity from manure. Much of the monies that made these projects possible came from the Farm Bill’s Rural Energy for America Program (REAP).

“With the help of farmers, ranchers and rural small businesses, America can make great strides toward solving its energy problems.” said Andy Olsen, Policy Advocate for ELPC. “REAP is creating economic development, energy independence and a cleaner environment one farm at a time.”

Since 2003, REAP has funded over 3,000 clean energy projects, in 50 states that cover the clean energy spectrum – wind, solar, geothermal, biomass and energy efficiency. The United States Department of Agriculture (USDA), which oversees the program receives applications for more than three times the amount of funds available, and in February, President Obama raised the funding levels to the highest amount ever to $109 million.

ELPC has been a public supporter of the program since its inception and notes that the program,”leverages billions in private investment, reduces pollution, builds interest and awareness about the benefits of clean energy.” Many legislators support the program as well and Represenative Colin Peterson (D-MN) commented, “This is the kind of common sense program that will help transform rural America into an energy resource for the entire nation.”

You can download Farm Energy Success Stories here.

While alternative energy continues to get a boost from the Obama administration, geothermal still doesn’t seem to be garnering much of the spotlight. However, the energy sector is growing and recently the state of Idaho announced that it will increase its percentage of energy output from wind, solar and biomass and is looking to add more geothermal derived energy.

Photo Credit: U.S. Geothermal Inc.

Based its 20 year Integrated Resource Plan (IRP) filed with the state last December, the most promising form of geothermal energy for Southern Idaho is binary cycle geothermal development. In this type of plant, the hot geothermal water is passed through a heat exchanger which then heats a binary liquid. From there, the liquid is vaporized and the vapor spins the turbine-generator unit where it is then reliquefied and reused in the heat exchanger. After a portion of geothermal water is used for heat, it exits the plant and is returned back to the reservoir.

The first project, Raft River, is already producing electricity and Idaho Power is looking to develop additional projects over the next decade. To date there are only 12 binary cycle geothermal plants in operation in the US.

In the near-term, Idaho Power plans on adding 266MW of wind capacity in 2010 through long-term power purchase contracts and plans to have over 600MW of wind by the end of 2012. In addition, they have hired Black and Veatch to conduct a feasiblity study for solar techologies.

In an effort to increase geothermal funding and projects across the US, the industry is gathering in San Francisco next week for the GeoPower Americas conference where the goal is to raise more attention to this promising form of alternative energy.

About 2,000 Utahns who need good jobs will get some training in fields looking to hire: alternative fuels, renewable energy, wind, solar and geothermal power.

The Deseret News reports that a $4.6 million stimulus bucks grant will pay for training for displaced workers, disadvantaged youths and veterans:

“We’re still working out some of the details,” department spokesman Curt Stewart said Wednesday. “But we have formed a coalition” to settle details on what will be free tuition for workers training for specific types of jobs related primarily to emerging energy industries.

The Southwest Technology Center will have 100 slots focused on working with wind, solar and geothermal power, Stewart said.

This State Energy Sector Partnership and Training Grant is part of the $440 million in stimulus grants nationwide.