Burning Bush Edicts, Obama Shows "Surest mean to American Prosperity", Real PV Case Study

"And we will make clear, as we go forward, that diplomacy and development are essential tools in achieving the long-term objectives of the United States. And I will do all that I can, working with you, to make it abundantly clear that robust diplomacy and effective development are the best long-term tools for securing America's future," said Secretary of State Hilary Clinton in a speech to her State Department staff upon her arrival at the Department of State offices. President Obama also visited "the building" the same afternoon, the second day he was in office, a demonstration of this policy. Secretary Clinton also referenced "the building" as one that is known as "this living, organic creature" in terms of the strong commitment and the culture of the State Department, but emphasized too, that USAID was a partner in the mission of the Department, and planned to visit them the following day. She also said that the tone had been set in President Obama´s Inauguration Speech.

In particular President Obama "rejected" the "false choice between our safety and our ideals," in what some commentators called a "strong rebuke" of the Bush Administration´s assaults on our constitutional rights in everything from the use of torture, and the suspension of habeus corpus, to the Patriot Act and the Warrantless Wiretap bill. But on the issues of energy and environment and our relationship with the rest of the world, he was also quite clear.

"The success of our economy has always depended not just on the size of our Gross Domestic Product, but on the reach of our prosperity; on our ability to extend opportunity to every willing heart - not out of charity, but because it is the surest route to our common good." I believe, because our President is an accomplished writer, those words have a specific implication for his vision of our role in the world. Particularly because he contrasts outreach of opportunity to charity, I believe he is speaking in the broadest terms about advancing the world economy as the surest means of assuring American prosperity. That is not to say, of course, that some "charity" (through USAID and other agencies) may also be necessary, but that extending opportunity to "every willing heart" does not draw a line at the borders of the United States. It implies fair trade with nations where human rights and health are treated fairly. "And so to all other peoples and governments who are watching today, from the grandest capitals to the small village where my father was born: know that America is a friend of each nation and every man, woman, and child who seeks a future of peace and dignity, and that we are ready to lead once more," President Obama also said in his Inaugural Speech, and although that statement was in the paragraph that began with the criticism of the Bush Administration, I think it is fairly clearly not just talking about the moral failures of the military prisons and treatment of prisoners, but of taking the lead in issues of both conscience and commerce.

In the Inauguration Speech, the President also said, "To the people of poor nations, we pledge to work alongside you to make your farms flourish and let clean waters flow; to nourish starved bodies and feed hungry minds. And to those nations like ours that enjoy relative plenty, we say we can no longer afford indifference to suffering outside our borders; nor can we consume the world's resources without regard to effect. For the world has changed, and we must change with it." The juxtaposition of these statements makes it fairly clear that it is a call of further "flattening" of the gap between rich and poor nations, especially in terms of resource consumption, but also in terms of those "opportunities" for "every willing heart."

"And so to all other peoples and governments who are watching today, from the grandest capitals to the small village where my father was born: know that America is a friend of each nation and every man, woman, and child who seeks a future of peace and dignity, and that we are ready to lead once more," President Obama also said in his speech. I genuinely believe that the greatest hope for the future of America as a strong and prosperous nation is to seek to globalize the prosperity we have come to enjoy. This may be a time of economic crisis in America, but when you look at the relative scale of "suffering" of the prisoners in our jails to most of those imprisoned in underdeveloped countries; of the families dependent on welfare in America compared to the beggars in the streets of Brazil or India; is it not fairly obvious that "[our] problems … don´t amount to a hill of beans" on that disproportionate scale?

Take a moment, if you will, to imagine with me a program of "foreign development" that might cost about the same as the US$10 billion that was poured down the drain trying to "rescue" Wall Street firm Merrill Lynch, which failed anyway, was sold to Bank of America, and where, it was revealed this week, the CEO arranged to spread around US$4 billion worth of staff bonuses just weeks before the sale took place. (And incidentally, Bank of American is moaning that they need another "bailout" of another US$10 billion because the "toxic" assets that the purchase of Merrill Lynch brought into their company were far worse than they ever suspected.)

Take a breath and (don´t hold it, but) breathe out and count to 10, then let´s continue on my little journey of imagination into deepest darkest Africa. Actually, not "deepest" or "darkest", but just some of the towns struggling to survive against desertification at the fringes of the Sahara Desert, or against dismal economic times lasting into the decades now since stable government led their country. Imagine, now, with me (and my company) that we "give" these towns an investment, which is to say that we invest by building a for-profit enterprise of mixed green fuel operations including biodiesel production, biooil production (either jatropha or algae or other non-food source), electric generating, and potentially other operations which can benefit from integration with other similar "green technology". They, the locals, participate in equity ownership via a "sweat equity" contribution that includes rapid local government approvals and tax or other business incentives, effective liaison to (or avoidance of) other levels of government (to avoid corruption and extortion) as well as community involvement and providing both labor and a customer base for the products. We estimate that such enterprises could be established for capital costs of about US$7.5 million each and produce between 750,000 and 1,000,000 gallons of biodiesel or biojet fuels each year, in addition to providing electric power to much of, if not the entire, town, for lighting, commercial buildings and even light industries. Perhaps, more importantly this could provide the town with electricity for schools, student computers, communications and more. A million gallons of fuel, sold at even just today´s American-type prices would amount to US$2,000,000 which would easily amortize US$7.5 million on a 6% loan over 10 years, (payments would be about US$1 million/year) while providing jobs and profits as well.

Now, reflect for a moment on the fact that a million is just one one-thousandth of a billion. So similarly, for US$7.5 billion dollars, we could build 1000 instances of this kind of locally rooted enterprises all over the continent. Compare that number to the Merrill Lynch bailout loan. Remember too that M-L was purchased by Bank of America, regardless of its poor performance, even though BofA is now complaining that they "really" need another US$10 billion to cover losses in the worse-than-expected M-L mortgages, but that is in addition to the US$10 billion M-L already received (no wonder, since they handed out US$4 billion of that in "bonuses") and in addition to the US$25 billion BofA has already received from the TARP funds too.

I´d like to turn now to the subject of power. Electric power, not political power. Here is an excerpt from a Nov. 5, 2008 revision to a report to the President on the subject:

"… the Congressional Budget Office (CBO) estimated nuclear power capital costs in a high capital-cost scenario to be about $4800 per kilowatt capacity (CBO 2008), which is near the upper end of current industry estimates (NEI 2008). For this same case, CBO estimated the levelized cost of electricity from a new nuclear plant to be $0.12 per kilowatt-hour (kWh), compared to $0.08 per kWh for coal and $0.07 per kWh for natural gas, assuming that these sources are also subjected to the high-capital-cost condition. This presents a financial challenge for the industry. While future carbon regulation could narrow the cost gap between nuclear power and fossil fuel sources, these estimates suggest that construction of a 1 gigawatt (GW) nuclear power plant would require a utility to make perhaps a $6 billion financial commitment, including the costs of financing."

A good friend visited last night and brought with him a proposal given to him by a vendor of Photovoltaic solar panels for his home. The paperwork actually offered several options but the one the vendor was pushing was a US$33,950.00 package that delivered a nominal 4350 watts. His cost, therefore was $7,804.59 per kilowatt. Now, mind you, the federal government was reportedly (according to the vendor) offering a 30% tax credit (remember, tax credits are dollar for dollar taxes paid for you, not just deductions from your adjusted gross income). Additionally there was a state tax credit of US$1,000.00 and a rebate from the local power company of US$3.00 per watt. So that brings us a figure of US$23,765.00, minus another US$1,000.00 for US$22,765.00 and the APS rebate of US$13,050.00 and we arrive at a net cost of US$9,715.00 to him. Since the increase to the value of his home in his neighborhood is estimated at about US$17,000.00 I couldn´t see any reason (other than checking references on the particular vendor) not to recommend it. But the one important number that one can derive from the above calculations is that APS is rebating US$3,000 PER KILOWATT (presumably this amount is equivalent to their minimum "avoided cost" in not having to construct additional generating facilities, though NOT actually the incremental cost of supplying "green power" generating capacity). With all those subsidies from 2 governments and the local utility company, the net cost per kilowatt my friend will pay is just US$2,233.33 per kilowatt, which appears to be less out of pocket to him than it would be to shell out the actual cost to build the same amount of power generation.

Of course, that´s a silly fictitious number. It costs him a NET out-of-pocket of US$2,233.33 per kilowatt, but meanwhile he has to shell out the entire Federal tax credit amount of US$10,200 and the state rebate of US$1000 in addition to the lump sum of more than US$9,700, so this is not a big help to folks in the lower income brackets. The increase in value of his home is highly theoretical at this point since the mortgage crisis has devalued a lot of property, and in any case, he doesn´t realize that increase until and unless he actually sells the home, solar PV panels and all.

Theoretically my friend will save about US$75.00 per month on his electric bill once he installs these panels. Let's see, that's 12 x $75 = 900/year which means slightly MORE than 10 years payback, but that's assuming power stays as cheap throughout the next 10 years. The one BAD, BAD, BAD part is that APS (like some other power companies) will allow you to accumulate net negative billing amounts throughout the year, but only UP TO your ACTUAL ANNUAL BILLING AMOUNT, at which point, January 1st your balance resets to ZERO, and all credits are lost with no means of recovery. That is a completely unfair and inequitable system, especially since as a "sunshine periods only" provider, you are always only providing peak period net flow, and drawing on the lower off-peak rates. That's when the term monopoly must smell the sweetest to them that owns one.

January´s frosty bite (at least for those in the Northern Hemisphere) is probably beginning to feel like an attack by a blood thirsty bulldog by now to many of you, and apparently it is especially chilly this winter in much of British Columbia. There, the British Columbia Truckers´ Association (BCTA), "states that its concerns range from: biodiesel´s effect on engine warranties (some of which are only valid for up to B5 blends, for specific models and years); its wear on engine components (especially for pre-2002 engines); fuel filter plugging; the consistency of supply (since there are still no guarantees regarding production levels of biodiesel or other blend components); methods for ensuring biodiesel quality compliance within the province; lack of requirements for labeling at the fuel pump, which prevents consumers from making an informed choice; lack of blend choice to aid operators of older vehicles whose engines may not be compatible with biodiesel; to additional administration for International Fuel Tax Agreement (IFTA) carriers that qualify for a biodiesel or carbon tax refund, " says the article I was reading on the Truck News website. I certainly like the idea of custom blending at the pump, but I also recognize that such facilities are likely to add significantly to the costs for a retailer to implement biodiesel in any form. It does seem like those 3 grades of gasoline pumps currently in use could easily provide 3 grades of biodiesel blends (say, B5, B20 and B50, perhaps?). I would like to see standard gas replaced with biobutanol or at least high percentage blends of biobutanol as rapidly as the technology matures enough to allow that to take place. Claims that fuel filter clogging is a widespread problem seem greatly exaggerated since many (if not most) said that a simple change of filter was all that was needed. Similarly, gelling at low temperatures is recognized shortcoming of biodiesel that even some fleet users in Northern British Columbia claim was not a problem for them when they switched to the lower concentration B5 blend. Diesel motor makers, and those that put them into their vehicles are reluctant to certify higher concentrations not due to any known problems, (other than poor quality consistency from backyard, home brewers of biodiesel) but simply out of caution that not a lot of long term testing has been done on blends richer than the 5% organic alternative. I have to agree that enforcement of quality standards much be maintained, and that to be sure they are being followed, additional inspections and enforcement personnel may be required, but at this point in the worldwide economic crisis, I would be inclined to perceive additional job creation as generally desirable, and reasonable cost of the transitional period toward a much higher percentage use of the renewable fuels.

With the popularity of older model Mercedes diesel passenger cars among biodiesel users, I must protest that I smell a red herring in supposed worries that, "its wear on engine components (especially for pre-2002 engines);" and "lack of blend choice to aid operators of older vehicles whose engines may not be compatible with biodiesel;" are concerns, perhaps there is even an outright "barnyard" taint to such odors.

Indeed calling those flimsy claims B.S. is a disservice to B.S. since manure can be treated to fermentation in an anaerobic digester to produce methane gases in a controlled manner that allows us to capture and use it as a fuel. And beyond the life expectancy of B.S. in a digester, the remaining sludge (no longer a significant source of climate change culprit methane) can them be used in a device called a "gasifier" to produce further fuel gases in the form of hydrogen and carbon monoxide.

Hungh, did he just say that carbon monoxide is a good thing? Isn´t it one of the "smog" gases we heard so much about in the past? Isn´t that what kills people who leave their car engines running in a closed garage? Well, yes, I did say that. Carbon monoxide (chemical symbol: CO ) actually burns rather well, combining with oxygen to produce carbon dioxide (CO²).

But wait, isn´t carbon dioxide what we are trying to REDUCE to avoid its effects on climate change? Well, yes, and unfortunately, what to do with that carbon dioxide is currently the main problem with what is being called by the mining and electric power industry their version of "clean coal". You see, gasification of coal is the method of cleaning up their act. It does, to a very large extend almost completely eliminate particulates in the flue gases. Clean up processes on the gases before combustion also greatly reduce (if not completely eliminate) several other undesirable byproducts of that combustion by reducing sulfur and other chemicals in the fuel gases. But the bottom line is still what do we do with the carbon dioxide that is the result of burning the carbon monoxide. So far the answers are not all that satisfactory, at least not the ones that the power and coal companies are proposing. "Carbon Sequestration" or "carbon capture and storage" although carbon dioxide has been used in "enhanced recovery" techniques on poorly producing oil wells, the cost of moving the carbon dioxide from the points where it is being generated, to where it might be used (or "stored", coincidental to it being pumped underground to coax oil to the surface) is impractically high.

The biological conversion of carbon dioxide into sugars, starches and other chemical structures of living cells, however, is a nice clean and green way to deal with this problem. I sincerely hope that both the coal and power industries will come to realize this soon, because using green plants to "make coal green" is the one strategy that might have significant environmental benefits to the relatively immutable fact that these industries are so well financed that they are essentially "irresistible" forces on the energy scene for the foreseeable future.

It was hardly overcoming an "irresistible force" but somehow I managed NOT to watch Kung Fu Panda on my flight back from Boston a few months ago. I did, however share the experience with my lovely wife, Maggie this weekend, watching the DVD version. The movie is sweet, with mildly good laughs liberally sprinkled throughout. It is easy to see why the story´s message appealed to actor Jack Black, who voiced the animated title character, Po, the panda. The rolly polly character was also well blended to Mr. Black´s particular talents in terms of attitude and dialogue, so the producers, directors and casting director deserve plaudits for that aspect. Next most notable performance was the voice of veteran character actor James Hong. Hong voices the Mr. Ping character, the goose that is the father of Panda Po. Yes, you read that right. Indeed one of the better laughs in the movie is where Ping is about to "confess" something, which one would logically expect to be the "fact" that Po, the panda, was an "adopted" member of Ping´s family of geese, but the subject never comes up. James Hong, one of the best known oriental actors in Hollywood, was actually born in Minnesota, according to his biography on the Internet Movie DataBase. I always seem to enjoy hearing the rich deep voice of Michael Clarke Duncan and my wife remarked that it took her a while to recognize the voice of Dustin Hoffmanas the Kung Fu master named "Shifu", as is often very typical of Mr. Hoffman, especially when his appearance is disguised. By the way, I confess I did not recognize what animal the character was supposed to represent until I looked that up on the Internet Movie DataBase, too. It turns out that the tiny creature (especially compared to the traditional black and white giant panda) is actually supposed to be a "red panda". Sadly, among the many other talented actors contributing voices to this film, Angelina Jolie appeared (I mean "sounded" I suppose) to be "phoning it in", Lucy Liu was wasted in the part of the snake, Viper, as was Ian McShane as the villain, Tai Lung. Despite many minor disappointments, I would have to say that overall I recommend that you watch it, especially if you have a chance to share the experience with your children. Entirely coincidentally, while writing this reviewof the movie, I overhead my wife, Maggie, recommend it to a friend during a telephone conversation, in which she reported it to be "fabulous, a story with a moral."

Love and warm wishes,

Stafford "Doc" Williamson

http://daochienergy.com