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Favorite and best stories from my recent work

Patagonia rejected fabrics made from bamboo over concerns about chemicals used to process the plant fiber.

Sustainable materials are gaining ground, but long development time frames and gaps in knowledge make commercialisation tricky |

Learning to surf in California’s frigid breakers, Todd Copeland, a design guru at the Patagonia clothing company, concluded that wet suits weren’t cutting it. Sure, a traditional Neoprene suit could keep him warm, but the suit’s material could be synthesised only from non-renewable, energy-intensive resources such as petroleum or kiln-baked limestone.

In spring 2008, Copeland blogged about the need for a truly green alternative. And, later that summer, his cry found its way to Yulex, an Arizona-based company working to resurrect a low-energy, low-toxin recipe for rubber from guayule, a desert shrub native to North America. Research on the plant peaked during the second world war but was then was shelved. Yulex had restarted the work around 2000 and was making hypo-allergenic surgical gloves, but was seeking a new market. It saw Copeland’s post, and soon its reps came knocking.

Yulex’s efforts are set to pay off later this fall, when Patagonia releases a full wetsuit made from a 60:40 blend of guayule and conventional Neoprene, five years after Copeland initiated the search. “We hope to get that to 100% [guayule], but it takes time to learn a new material,” says Copeland, now Patagonia’s environmental product specialist.

This serendipitous match between designer and material maker is, unfortunately, a rare exception. Speaking to Copeland recently, I wondered how many misses Patagonia has evaluated for every successful innovation, such as Yulex, it brings to market. “100? Probably more,” he speculated. “And many, many more don’t even make it that far.”

The tale of Patagonia’s eco-wetsuit offers a parable of the larger challenge facing green materials on the path from lab to market. The process remains a maze that few materials survive. But a recent survey of design leaders reveals that while eco-materials still face a tougher journey than their conventional counterparts, the process of green technology transfer is gaining momentum.

Sales of green materials are surging

Though spotty, statistics on green materials markets are all pointing up. The building industry is one of the largest shifting towards lower-impact practices. In the US, the green construction market is worth roughly $100bn, a ten-fold rise since 2006, according to the 2013 Dodge Construction Green Outlook. As a share, green construction now accounts for 44% of total US commerical and institutional construction, up from near zero a decade ago.

Anecdotal evidence suggests that big corporations are deepening their commitment to these priorities, as well. In 2006, Du Pont set out to double sales of products made from “non-depletable resources” to $8bn by 2015. The US chemicals giant blew by that mark four years early, racking up $10bn in green-materials revenue in 2011 (most recent data).

Green adoption has been accelerating at Ford, too. A decade ago, engineers at the No2 US automaker were skeptical of the cost and performance benefits of alternatives. Today, following a flurry of successful material substitutions, design engineers are required to evaluate and opt for green candidates where they equal or exceed conventional materials.

Sustained internal commitment is vital

Ford’s shift didn’t come quickly. “We were kicked out of conference rooms,” laughs Debbie Mielewski, technical leader for Plastics Research at Ford Motor Co, recalling her efforts in the early 2000s to pitch bio-based plastics to the car maker’s internal development engineers. “They saw only risk and additional cost,” she says.

But thanks to the protection of Bill Ford Jr, the company’s then CEO, Ford’s bio-plastics R&D program had the time and funding to mature new offerings to the point where today soy-based polyurethane foams are used in the seat cushions, backs, and headrests of all vehicles built in North America.

A focus on value and performance has helped reverse early skepticism. “Our goal has always been to match the price and performance of any material we’re hoping to replace,” she says.

To cultivate and scale production of new materials, suppliers will need help

Internal approval of new green materials isn’t always enough.

For strong, smooth plastics used to make bins and liners, Ford has successfully replaced glass fibres with wheat straw – the fibrous waste left when wheat is harvested – to reinforce the plastic.

Yet as Mielewski points out, ensuring consistency of the straw’s strength posed a new challenge, as did ensuring uniform size of the material, which must be milled into identical short lengths to be blended into plastic. “In Canada, wheat straw used to be burned,” she says.

To change that practice, Ford collaborated with farmers and third-tier suppliers to develop a supply chain to recover, test and standardise the processed straw. Without Ford’s commitment to the end product, the investment wouldn’t have happened, says Mielewski: “A third-tier supplier had to invest in and build a mill to meet our demand. That takes real confidence.”

Recovering waste takes patient, innovative collaboration with vendors early on

As its commitment to recover and re-use waste carpet materials started to take root in the 1990s, Atlanta-based Interface, a $1bn-per-year manufacturer of carpet tiles used primarily in commercial spaces, recognised it could push this goal only as quickly as a key fibre supplier, Italy’s Aquafil, was able to develop and scale-up processes to harvest fibers from recovered carpets and to then re-melt them for use in new carpeting.

“This was more of us pushing [recycled materials],” by Interface, “rather than a pull” from the market, says Nigel Stansfield, Interface’s vice president and chief innovations officer. “We had to overcome a perception that recycled was more costly, or performed less well.”

Interface also faced a reverse logistics challenge: it had to work with existing and new partners to learn how to capture and truck tons of carpet back to its partner plants. “To make this work, we’ve had to focus on all parts of the product’s life cycle at once,” Stansfield says.

At the installation phase, for example, this has meant educating flooring installers to abandon long-standing practices of gluing carpets down, which damages the material at the later recovery stage. Interface instead relies on gravity and strong adhesive patches to link its carpet tiles and keep them carpets locked down.

And at the end-of-use stage, the move has meant developing reverse logistics flows, to steer carpet waste away from landfills, and back to re-processors such as Aquafil.

Vetting green materials remains a weak link

Designers are widely frustrated by a lack of consistent, reliable services that can authenticate green materials’ virtues. The industry needs a “greenwash monitor,” Patagonia’s Copeland says. There has been some movement toward this goal, with efforts including Nike’s MAKING app, Material ConneXion, and the Sustainable Packaging Coalition.

Green materials can fail an evaluation for many reasons. A few years ago, Patagonia became interested in bamboo-based fabrics. The cultivation of fast-growing bamboo was appealing as a sustainable raw material. But on deeper investigation, Patagonia passed on the new fabrics because the process to convert bamboo into fibres proved just as toxic as the standard viscose method.

Likewise, PLA, a bio-plastic made from corn sugar, has attracted interest both as a renewable resource and because the end product is biodegradable. But in a car’s cockpit, durability is paramount, and Ford found that in tests, the stuff didn’t hold up. PLA plastics would “begin to compost in the car,” Mielewski says.

Resist the bias toward replacing old with green

“Most clients think that sustainable design is simply a case of switching existing material for a greener option,” says Chris Sherwin, head of sustainability at Seymourpowell, a London-based design advisor. “Same product, new material: that’s wrong on many grounds.”

Sherwin argues that its critical to understand that the stuff from which a product is made often accounts for only a tiny fraction of the impact of the use-phase of a product’s lifetime. Hence, it’s smarter for laundry soap makers to improve the performance of their detergents in cold water rather than focus solely on revising packaging.

“We should start with more fundamental product redesign,” Sherwin says. “We must start by asking, how will the consumers’ needs best be satisfied, and design accordingly.”

Check out the original at http://www.theguardian.com/sustainable-business/designing-sustainability-challenges-green-materials

The Guardian

Can new supply chain approaches prevent another Rana Plaza? | The Guardian

2013-09-17 Adam Aston

Tougher factory and supply chain standards won’t be enough to prevent disasters like the Bangladesh factory collapse. Can development tactics succeed where conventional approaches have failed?

Foxconn factory workers in China's Guangdong province — Foxconn workers in a Chinese factory. Can new industry tactics prevent supply chain disasters? Photograph: Bobby Yip/Reuters

Ideally, tragedy begets reform.

That’s the tale we’ve learned from past industrial disasters, including the 1911 inferno at the Triangle Shirtwaist Co. in Manhattan, which killed 146 and marked the dawn of a fundamental shift in US workplace standards.

The changes took decades, to be sure, but the tragedy spurred the development of fire and building regulations, the creation of labor and women’s unions and a culture of real regulatory enforcement.

What, then, do we to make of reactions to the collapse of the Rana Plaza factory six months ago?

The deaths of some 1,130 garment workers in the Dhaka, Bangladesh, sweatshops drew a storm of public outcry. But in supply-chain circles, the tragedy has revealed more about the limits of our potential to “fix” global supply chains that, in some cases, have grown too big and too complex to avoid human-rights failures.

Facing this reality, a new generation of supply-chain experiments are borrowing tactics from conventional development efforts. These look beyond conventional rules- and business-transaction based approaches to address the root causes of many factory malpractices. In general, they’re working to improve education, health and community conditions in ways that benefit both workers and their employers.

Initial Rana reaction

When Rana Plaza collapsed, the response – among top-tier corporate brands – was rapid. Within a month, a cadre of mostly European fashionchains, including H&M, Zara, C&A, Tesco and Primark, signed a legally binding agreement to help fund and enforce safety improvements in Bangladeshi factories.

US and Canadian retailers took a different path.

Under the umbrella of the National Retail Federation (NRF), key brands backed an alternate agreement reaffirming ongoing efforts to take a ground-up approach, training workers, factory owners, officials and foreign brands in parallel.

The split response led to an unseemly tit-for-tat round of criticism.

The heads of IndustriALL, a global union supporting the European effort, called the rival plan a “pale imitation.” The NRF effort also drew criticism for not requiring its suppliers to allow workers to organize.

The head of the NRF volleyed back, in The Wall Street Journal: “The IndustriALL plan seeks major funding by private business without providing accountability for how funds are spent, as well as binding retailers to specific resourcing requirements without taking into account the impracticality of such a requirement.”

Distracting as it is, the infighting reveals the spectrum of current possibilities – from the EU’s conventional approach to NRF’s ground-up agenda – and many of the limits that circumscribe supply chain efforts circa 2013.

Limits of good intentions

However earnest, corporate efforts to improve supply chain operations have not kept pace with the compounding complexity of globalized supply chains. Links have grown too numerous; buyers’ influence dissipates too rapidly.

Eric Olson, BSR’s senior vice president, walked me through the vexing math facing would-be supply-chain trackers. A typical Fortune 500 company will have hundreds or thousands of first-tier suppliers. But supply chains can easily extend to 15 layers or more.

“There’s almost no company on the planet that has figured out how to cascade their supply chain efforts into the second tier,” Olson said, “let alone the third, fourth and so on, even though 80% of the impacts are happening further out in the chain.”

Meanwhile, a recent survey of some 1,700 UN Global Compact corporate members highlights another limitation. While most companies set goals for their suppliers, only 18% actually help their suppliers set and review goals their own goals – and only 9% take steps to verify the efforts, according to Global Corporate Sustainability Report 2013.

“While companies are making progress in terms of thinking about supplier sustainability and setting expectations, the supporting actions that will drive adherence have shown little or no increase over the past few years,” according to the report.

Wider scope, deeper reach

If conventional supply chain practices are running up against inherent limits, what next?

In some of the world’s least-developed markets, a new generation of more holistic experiments is showing promise.

These experiments stem from the recognition that mandating standards to a factory manager often ignores developing-world realities, such as poorly educated workers, degraded public health, economic insecurity and antagonistic worker-manager dynamics.

If these factors can be improved, the potential to advance more ethical, productive factory ecosystems would rise overall.

As an example, Olson points to HERProject. The program, acollaboration between BSR and 22 multinational companies, is delivering curricula focused on health and financial topics to some 200,000 women workers in 200 factories and farms in Asia and Africa.

Early findings show that when offered to women through their workplaces, the factories benefit via reduced absenteeism and turnover. Greater work-place trust, in turn, is helping managers collaborate with workers on setting conditions. A Levi Strauss & Co. supplier in Egypt reported a four-fold return from the program

There’s no denying this approach is more difficult. Yet it’s clear that, if supply networks continue to stretch and globalize, conventional supply-chain tactics are ill-suited to less developed markets.

If high street brands can cultivate common cause with development goals, a smarter approach to supply chain management will be a welcome byproduct.

See the original story here:
http://www.theguardian.com/sustainable-business/supply-chain-development-tactics

Global CCS Institute

Could expensive oil rescue CCS? A talk with energy expert Michael Levi | Global CCS Institute

2013-03-26 Adam Aston

As oil prices continue to skirt all-time highs, there’s been a gusher of coverage about how oil producers are turning to ever more costly technologies—from going to ultra deep, to mining tar sands—to eek more oil from the earth. Against this backdrop, I wondered if the case for using CO₂ for enhanced oil recovery (EOR) is gaining mind share, or maybe even market share?

To get a better understanding on the impact of sustained high oil prices I turned to Michael A. Levi, The David M. Rubenstein Senior Fellow for Energy and the Environment at the Council on Foreign Relations in New York City. A frequent author (his new book, The Power Surge, is due out this month) and a regular contributor to the CFR’s energy, security and climate blog, Levi is a prolific voice on energy issues, often quoted on the complex interplay between conventional energy, renewables, climate, and politics.

Levi first explored the linkages between high oil prices and EOR-CCS’ prospects last June, a time when oil prices were around 10 per cent lower than recent averages. In his post, Levi steps through a back-of-the-envelope assessment of the potential rewards of scaling up EOR-CCS.

In a 2010 study, Advanced Resources International estimated that a typical CO2-EOR project would require about one ton of CO2 for each 3.8 barrels of produced oil (assuming some recycling). Assuming CO₂ available at $15/ton and an oil price of $112 they figured that a typical project could make a profit of about $30/bbl after returning 25% on capital.

Alas capturing and delivering CO₂ from power plants costs a lot more than $15/ton. How much more? A lot depends on how much natural gas costs. A recent paper in Environmental Science & Technology uses a central estimate of $6.55/MMBtu and estimates that captured CO₂ could be delivered at $73/ton. If prices are instead $5/MMBtu, which is a reasonable expectation in the United States, this would drop by about ten percent, to around $65/ton.

The authors also look at the question probabilistically. They find that there’s a 70 percent chance of being able to deliver CO₂ for $100/ton or less. If you shift their natural gas price assumptions down a bit, it’s reasonable to drop this to about $90.

What would this mean for the economics of oil production? Estimated profits at $112/bbl oil would fall to about $18/bbl (part of the extra cost of CO₂ would be offset by lower taxes). Once again, though, this is profit in excess of a 25 percent return on capital. Excess profits would be wiped out if oil prices fell to about $75.

Notably, the study to which Levi refers is focused on the cost of CO₂ capture from natural gas processing plants—the largest industrial-scale sources of CO₂ currently available. Levi’s calculation holds for proposed CCS-from-coal facilities, where planners are aiming at a similar target of delivering CO₂ at less than US$100 per ton.

Back to oil prices, then. Given that crude has held steady at around US$100 per barrel in the past few years, Levi’s calculus makes CCS-EOR look like a pretty good proposition. Levi’s bottom line: “I wouldn’t count on high oil prices rescuing power plant CCS. But I wouldn’t write it off entirely either – and, even if there’s only limited deployment, the impact on technological progress could be large”.

In short, the longer the price of crude remains high, and the higher it goes the stronger the case for EOR-CCS. While it may be perilous to speculate on oil prices, the balance of indicators point towards high prices over the long term. Energy-hungry emerging markets such as China and India increasingly drive long-term demand. A recent OECD report speculated that prices could rise as high as US$270 a barrel by 2020, due largely to demand growth in emerging markets.

To keep output rising, companies are already digging deeper—literally and financially—to lift each new barrel of oil. Exxon, for example, will spend a record US$41 billion in 2013 to buoy its long-term output of oil and gas, which it expects to fall by one per cent this year. As oil companies reach for more tools to eek out every last molecule of petrol, especially from wells they already control, it seems that the case for EOR-CCS is only improving.

I caught up with Levi in March to get his take. Here’s an edited version of our conversation.

In the years since the financial crisis hit, oil prices have remained stubbornly high, despite slow growth in much of the developed world. Do sustained high prices reinforce your take on the prospects for oil’s growing role in the future of CCS?

I’ll leave it to others to make predictions on future oil prices. But it is clear that high oil prices make it more attractive to use CCS in EOR. The higher oil prices go, and the longer they remain high, the more incentive there is to invest in CCS EOR.

Short-term variances in oil prices are fairly immaterial. What matters most is that prices have been sustained. This gives people more confidence that prices will remain high over a longer spread, over a longer period of time.

No one invests for the long term based on today’s prices, especially not oil companies, which plan on multi-decade time scales. Power companies also think on very long time scales. Both are capital-heavy industries—familiar with assessing risk, pricing and financing big projects. The difference is that oil companies are more likely to be comfortable taking risks.

Given anemic US growth, why have oil prices remained near their all time highs, when adjusted for inflation?

With the exception of the immediate aftermath of the financial crisis, when oil fell sharply, prices have been historically high. Prices also returned to high levels very soon after the global financial crisis.

When it comes to prices, the slow growth in the United States, following the recession, doesn’t matter in so far as we’re part of the world economy, taking a world price on oil. There’s a lot of growth in demand happening elsewhere, particularly in developing economies like China.

At the same time, even though there’s been a lot made of rising US oil output, in the global market the new sources add up to only modest supply growth. The net result is relatively high, sustained prices. Rising US oil output can help restrain prices at the margin, but it’s unlikely to crash prices on a sustained basis.

That’s partly because marginal North American oil production is fairly expensive. Whether it’s fracked oil in the Dakotas, or oil sands in Canada, these unconventional new sources are relatively costly to exploit, so require fairly high prices to be viable.

Some environmentalists have objected to the idea of CCS-EOR, maintaining that it’s perverse to pump anthropogenic CO₂ into the ground to lift out fossil CO₂ in the form of oil. For example Joe Romm—a former US DOE official and a leading voice on climate policy via Climate Progress—has argued that CCS-EOR will lead to more net CO₂ emissions. Here he is, writing in 2007:

Capturing CO₂ and injecting it into a well to squeeze more oil out of the ground is not real carbon sequestration. Why? When the recovered oil is burned, it releases at least as much CO₂ as was stored (and possibly much more). Therefore, CO₂ used for such enhanced oil recovery (EOR) does not reduce net carbon emissions and should not be sold to the public as a carbon offset… In short, the CO₂ used to recover the oil is less than the CO₂ released from that oil when you include the CO₂ released from 1) burning all the refined products and 2) the refining process itself.

How do you see this issue on the net GHG impact of EOR-CCS?

Focusing only on each CO₂ ton in the near term is short sighted. There are two things worth keeping in mind. The first is that at the margin, US oil production tends to primarily displace other oil production rather than supplement it. So if lifting the US barrel, in that case, leaves even a little more CO₂ in the ground than the alternative, then it’s a plus. That alone reduces the impact of this practice on net emissions of greenhouse gasses.

The other perhaps more important aspect is, in the short run, what you should be focused on when it comes to CCS and EOR is the opportunity to develop the technology. The goal is to bring down its cost, which will let you apply it on a much larger scale to other industries. If you don’t start somewhere, it’s very hard to get to the point where this technology is cost-effective.

So even if applying CCS to boost EOR doesn’t create a big carbon benefit in the short run, it’s a good bet to deliver a big payoff in the longer run. It’s perhaps the most economically viable path, to ready CCS for commercial use in the electric power sector around the world.

The point is that technologies need niches to scale up, and to bring down costs. If you only focus on technologies that can solve all our problems right now at low cost, it turns out that you don’t have any.

Don’t get me wrong. It’s obviously critical that we reduce net greenhouse gas emissions. But I’m more interested in being able to make huge reductions ten years from now than in the micro-level changes that might happen before this technology is scaled up.

We’ve touched on high priced oil already. The other bogeyman in global energy markets these days is cheap North American natural gas. In early March, a Canadian coal-to-syngas project that was slated to deploy advanced CCS was mothballed in part because of low natural gas prices. Does cheap natural gas alter the calculus on CCS-EOR in any way?

If we’re talking about CCS for synthetic liquid fuels, which you asked about, those require relatively high prices to be viable. Without massive over-investment in that space, I don’t see a stampede toward synfuels. So no, even if we see more synfuels, the shift will not crash the price of oil.

On that note, keep in mind that the one thing that might change the calculus of CCS-EOR is if oil prices crash. But it’s very difficult to crash the price of oil from the supply side, especially when it’s already this expensive, unless you massively overinvest in oil production—which is very capital intensive to do—or develop a very large-scale supply of alternatives.

As far as natural gas-fuelled cars and trucks go, my answer is the same. Yes, natural gas is being used to fuel a growing—but still small—share of fleet vehicles, and yes EVs will consume more natural gas indirectly, in the form of electricity. But will the penetration of natural gas into the US transport sector fundamentally change the economics of oil? I don’t see that in the next 10 years, at least. I think it’s hard to make predictions further beyond that.

With the failure of many publicly backed CCS projects around the globe, do you see EOR as a best bet to push CCS technology ahead?

I think that may well be right. With EOR-CCS, it may not be possible to make money at a large scale without new policy, but it may at least be possible to imagine that one can, and to come closer to cover the costs of scaling up the technology in the process. Conversely, it is impossible for anyone to imagine that they can make money taking the CO₂ exhaust from a coal-fired power plant and burying it underground—unless there’s a policy incentive. It’s a pure additional cost.

Entrepreneurs who put money into EOR-CCS may be right, or they may be wrong, but at least a few may be willing to push ahead. In short, CCS-EOR provides short-term economic support for innovation. If you’re concerned about the long-term prospects of CCS, you should be thinking about EOR as the way to support innovation in the technology.

What are the key hurdles then to seeing EOR-CCS progress further, faster?

Will companies have the confidence to invest in this? Are there too many risks that are confusing? Is there too much uncertainty? Are there too many technological unknowns? I think those are bigger factors compared to whether oil prices might crash, or whether the global transport system might flip to natural gas.

There’s some evidence of progress out there. There’s interest in tweaking some tax credits that exist in order to support CCS-EOR. And in his State of the Union address, the president mentioned a US$25 million prize for the first combined cycle natural gas plant to implement CCS. It’ll be interesting to see whether that prize is defined to include projects that use the CO₂ for EOR.

Check out the original post here: http://www.globalccsinstitute.com/insights/authors/adamaston/2013/03/26/could-expensive-oil-rescue-ccs-talk-energy-expert-michael-levi

Corporate Knights

How recovering water from fresh potatoes helps a PepsiCo chips factory turn off the taps | Corporate Knights

2013-01-15 Adam Aston

For PepsiCo, one of the world’s biggest makers of potato chips, the key to producing the crispiest chips possible is all about driving moisture out of raw potatoes. Paradoxically, though, potatoes are made up mostly of water.

At a Walkers Crisps factory in Leicester, England, PepsiCo is turning this soggy challenge into a water-saving innovation. The goal: to extract so much water from inbound spuds that the factory can go “off grid,” drawing little or no water from public taps. Doing so, PepsiCo hopes, will help save the plant roughly $1 million a year in avoided water costs.

“The idea for taking factories off the water grid came from a simple observation by our front-line teams that potatoes are 80 per cent water,” says Martyn Seal, PepsiCo’s European director of sustainability.

PepsiCo’s efforts to turn off the taps at its Walkers plant in the U.K. is one sliver of a bigger batch of initiatives to make its global operations run with less water. In 2010, the food-and-drink giant, which turned over $66.5 billion (U.S.) in sales last year, released its first comprehensive water report. The effort, similar to initiatives out of rival Coca-Cola, set out details of its water consumption alongside plans on how to use that water more productively.

One of its headline goals is to improve the efficiency of water use – measured by water consumed per unit of production – by 20 per cent by 2015, using 2006 as a baseline. PepsiCo hit this target last year, four years ahead of schedule. Another goal is to strive for “positive water balance” in water-distressed areas. This means for every unit of water PepsiCo uses, it strives to restore, replenish or prevent loss of the same amount or more in the same region. It also aims to provide access to safe water for three million people in developing countries before 2016.

Early on, potato-chip plants emerged as a juicy target for these goals. Making chips is surprisingly water intensive. In a normal year, some 350,000 metric tons of fresh tubers is shipped to the Leicester factory – the equivalent of some 13,000 tractor-trailer loads.

In the plant, potatoes are washed, peeled and sliced. A steady flow of H2O is used at each of these steps. In Leicester, this process demands roughly 700 million litres of water annually, the equivalent of roughly 280 Olympic-sized pools. Yet as crucial as water is while preparing the raw spuds, it’s an unwanted troublemaker thereafter. The thin slices are plunged for a few minutes into oversized fryers filled with oil boiling at 190°C (375°F). Water trapped in the potato slices vapourizes instantly, turning the otherwise inedible starch into an addictively crunchy treat.

In a conventional set-up, the cloud of steam that rises from these vats is vented out into the air. PepsiCo engineers recognized that the vapour represents a huge waste of both water and energy. To recover these wisps of moisture, PepsiCo fit a contraption onto the plant’s exhaust towers. Inside, the hot steam passes over a network of thin, cooled tubes. Moisture from the potato vapour condenses on the cooler tubes for easy collection. The process also recaptures traces of cooking oil from the exhaust. Both the oil and water can be reused. About four-fifths of the moisture that is normally lost is recovered.

Together with systems that recycle about two-thirds of the plant’s wastewater, the steam-recapture project is on track to supply enough water to hit PepsiCo’s goal of drawing zero freshwater in Leicester. The company is already testing the technology at similar sites in Holland and Belgium, part of a plan to extend these practices to other large European operations and, later, worldwide.

A successful pilot in the Leicester plant “will provide us with a technology suite that we will be able to reapply at other PepsiCo plants, particularly in areas of severe water scarcity,” Seal says. “This is an opportunity to realize meaningful cost savings while reducing our impact on the environment.”

Combined with other projects across PepsiCo’s operations, the steam-recapture efforts contributed to savings of $45 million in water and related energy costs last year, compared with the 2006 base when the company began these efforts. By volume, in 2011 it used 16 billion fewer litres of water, compared with 2006.

As much as PepsiCo execs crow about the bottom-line impact of these efforts, they point to strategic benefits too: The company must plan for operating risks that droughts pose to future operations. By 2030, global demand for freshwater could exceed supplies by 40 per cent, explains Dan Bena, PepsiCo’s senior director of sustainable development.

“If this gap is not closed, there will be no business as we know it today,” he says.

See the original story here: http://www.corporateknights.com/article/tech-savvy-pepsico

Corporate Knights

Philly Mayor Michael Nutter puts his city on a greener path | Corporate Knights

2012-06-20 Adam Aston

Michael Nutter couldn’t have picked a worse time to win the keys to city hall. In late 2007, after 14 years as a city councilman, Nutter was elected as Philadelphia’s 125th mayor. His victory was built in part on a campaign promise to make his town in Pennsylvania “the greenest city in America.”

Yet mere months after he took office, Wall Street imploded, sparking global financial crisis and the worst economic downturn since the Great Depression. Philadelphia’s fiscal outlook plummeted from surplus to billions in deficit, leaving Nutter facing painful choices.

Rather than retreat on his green agenda, however, Nutter looked to sustainability to help right the city’s finances. In 2009, he unveiled Greenworks Philadelphia, an ambitious blueprint to help the city run more efficiently, with less pollution, and become healthier all while using less energy and money to do so. “Cities are incubators of innovation,” said Nutter in an interview with Corporate Knights. “Congress can’t figure out energy or climate policy. Breaking new ground is happening at the city level because this is where it has to.”

Philadelphia’s eco-planners developed the program by auditing a vast array of urban metrics – from the amount residents walked to the availability of fresh, whole food. Then, they cast the data into the future, assessing how the city might look if “business as usual” continued. Finally, they combed through the numbers to set tough but achievable goals touching on dozen of actions. The final report organized the targets under 15 broad categories.

As an integrated vision for urban sustainability, Greenworks won plaudits for its unusually ambitious timeline. When it comes to energy or climate goals, it’s not unusual for governments to set targets a decade or more into the future. But distant goals can erode political will, Nutter notes, so his team agreed to peg the bulk of the plan’s targets to 2015.

Three years in, the results are showing up on Philadelphia’s city streets, and on its bottom line. Some of the programs are helping the city’s day-to-day operating budget. Consider recycling: The city saw rates soar to 18.9 per cent in 2011, more than triple the benchmark rate of 5.4 per cent in 2006.

The city made recycling both easier and more rewarding. Recycling days were shifted to the same day as regular garbage pickup and doubled in frequency. The city also eased the sorting hassle by expanding the types of plastic that could be recycled to numbers 1 through 7. Most U.S. cities accept just a few of those types.

The shift is turning a cost into a revenue source. Each ton of trash diverted to recycling bins not only saves about $68 in landfill costs, it generates more than $50 from the sale of bulk recycling material.

Other efforts promise to deliver huge, long-term capital savings. For example, Philadelphia was facing a $10-billion tab for new sewage facilities to prevent storm water from tainting regional waterways. Instead of a costly infrastructure fix, though, the city is spending $2 billion over 25 years on a multifaceted solution that restores the urban landscape’s ability to absorb rainfall.

Additional trees, parks and urban green space, all of which act as natural sponges, top the city’s to-do list. For buildings, the tricks include rain barrels and green roofs to collect and hold rainfall. The city is building out permeable road surfaces that let drops of rain soak slowly into the ground, rather than race down to storm sewers. “We recognized we could save money, not dig up half the town, and improve our parks and green spaces,” says Nutter.

The mayor’s green team tapped private partners to help multiply public efforts. To help cut citywide energy use, city programs aim to reinsulate homes and recoat black-tar roofs – which become oven-like hotspots in the summer – with cool, reflective white coatings. To spark homeowners’ competitive impulse, the city teamed up with Dow Chemical on the “Coolest Block” contest. Residents competed to win energy-saving cool roofs, insulation and other efficiency upgrades donated by Dow to their entire block. Said the mayor: “We can’t do this alone.”

For Nutter, the city’s green programs are delivering growing rewards, too. Philadelphia closed a multi-billion dollar budget gap as Greenworks took root. In its 2011 self-assessment, the city found that 135 of its initial 151 green goals have been completed or are underway. That quick success, Nutter says, has fired ambitions, spurring the addition of dozens more new eco-goals.

Perhaps the greatest measure of success for Nutter is re-election. He won a second term in November, assuring he’ll be there to push Greenworks through its 2015 deadline, and beyond.

See the original story here: http://www.corporateknights.com/report/2012-greenest-cities-america/philly-mayor-michael-nutter-puts-his-city-greener-path

GreenBiz

How Best Buy makes money recycling America’s electronics | GreenBiz

2012-04-24 Adam Aston

Retailing giant Best Buy (NYSE: BBY) has seen its recycling take-back program grow from a costly gamble into a fast-growing business that’s making a little bit of money. “It’s profitable. But just barely,” said Leo Raudys, senior director of environmental sustainability at Best Buy. “People still don’t believe it.”

The skepticism comes from the fact that the program is not only free to consumers, but they can also drop off just about any kind of junk that runs or ran on electricity. A dead tube TV? Check. The cell phone you dunked? Of course. That leaky washing machine? Yep. Best Buy takes appliances, too.

So how does the company cover its costs and a bit more? I had the chance to catch up with Raudys last week during the Sustainability Operations Summit in New York City, where he spoke on a panel titled “Successfully Tackling Waste.” Afterward, Raudys talked about how Best Buy turned the potentially thorny problem of collecting recycling into a self-subsidizing operation.

At its launch in 2009, the chain required consumers to buy a $10 store card to drop off recycling. But last November, Best Buy dropped that fee.

Today, the program generates two streams of revenue. First, Best Buy takes a cut from its recycling partners. When truckloads of old TVs, PCs and dryers go to its processing partners, the plastic, gold, lead, nickel and other materials recovered from the dismantled waste is sold to be remade into new materials. And while volatile, the prices for all of these commodities have generally been heading up over the past few years, raising the share that comes back to Best Buy. A very small percentage of the waste, Raudys estimates, ends up recovered and refurbished.

Secondly, Best Buy collects revenues from its partners: big, well-known electronics brands. “25 states have rules requiring that manufacturers recycle some share of what they sell every year,” Raudys said. “Our network can deliver efficiencies that [the electronics makers] can’t match, so they buy access to it.”

Best Buy has also been able improve its margins by steadily lowering the costs of collecting and transporting the consumer waste by improving workflows and boosting volumes, he said. Higher volumes of waste let Best Buy win more competitive rates from its recycling partners as well.

But does Best Buy see any extra sales from customers lured in by the recycling service? After all, when faced with roughly similar prices for a flat panel TV from a number of retailers, many customers would opt for the vendor who can take away the old set. The benefit of the program remains unclear, however. Raudys explained it’s difficult to identify sales that happened because of the recycling policy. “We see this as a service to our customers,” he said.

It could have been a costly, unsustainable service, though. “The program was projected to cost $5 million to $10 million in the first year,” Raudys said. “We didn’t know what we were getting into.” If costs stayed that high, he said, the program might’ve been scrapped.

The program’s most tangible overhead costs are labor and storage space, to process the waste at its stores. There’s also the cost to truck pallets to recycling sites. Less visible costs for Best Buy include auditing the processes of its recycling partners. Raudys said the company hires third-party inspectors to enforce a corporate recycling policy that aims to match or exceed state and federal guidelines. To avoid the export of hazardous materials to low-income countries, Best Buy’s program includes physical inspection of shipping containers and paper auditing.

E-waste handling practices remain a controversial challenge. Scrutiny of e-waste practices increased in the wake of embarrassing revelations — most famously a 2008 investigation by CBS’ 60 Minutes program — that exposed recyclers who were sending e-waste to be dumped or processed in primitive, dangerous methods.

Experts say the problem has improved but still persists. “At least half of the e-waste collected in the U.S. for so-called recycling is exported to Asia and Africa where it is often smashed, burned, dumped or processed in conditions that endanger the health of workers,” said Jim Puckett, executive director of Basel Action Network, an e-waste watchdog group.

Three partners handle Best Buy’s e-waste. In the western U.S. materials go to Electronic Recyclers International (ERI) in Fresno, California. In the Midwest, old gear flows to Regency Technologiesin Cleveland, Ohio — and in the East, E Structors in Baltimore, Maryland handles the e-waste. Appliance recycling is done by Regency and Jaco Environmental in Snohomish, Washington.

Puckett would like to see all of Best Buy’s e-waste handlers meet the e-Stewards certification, a program co-developed by BAN and other environmental groups. “Only e-Stewards is consistent with international agreements barring export of hazardous e-waste to developing countries and forbids using municipal landfills or incineration for hazardous e-waste,” he said.

Of Best Buy’s three e-waste handlers, only ERI is currently e-Steward certified. But all three meet the R2 code, an industry-backed standard.

In the absence of federal or state regulations for e-waste, Best Buy’s take-back program is one of only a small number of options available. Just 25 states have e-waste rules, although Best Buy accepts recycling nationwide. “There are many places in the country where there are no alternatives,” according to Puckett.

The program’s growth, meanwhile, suggests there’s a big need. Since the program began, Raudys said, Best Buy has collected half-a-billion pounds of recycling, including both appliances and e-waste. And given that the volume of recycling is growing by 10-15 percent per year, Best Buy is likely to hit its goal of 1 billion pounds of consumer goods soon. Last year, some four million customers dropped off nearly 86-million pounds of electronics and 73-million pounds of appliances for recycling (see table, below).

Best Buy’s global recycling operations

Best Buy’s efforts come against a backdrop of intensifying efforts to improve e-waste recycling nationwide. Last week,Staples announced a deal with HP to take back all sizes of computers, monitors, desktop printer/scanner/copier devices, handheld electronics and various other retired gizmos.

The number of recycling drop-off locations for consumers nationwide grew to nearly 7,500 from just over 5,000 in 2011, according to the First Annual Report of the eCycling Leadership Initiative (ELI), a program created by theConsumer Electronics Association, a consortium of major electronics manufacturers and retailers.

ELI participants arranged for the recycling of 460 million pounds of consumer electronics last year, a 53 percent increase over the 300 million pounds recycled in 2010. And the group is aiming to drive that figure to annual rate of 1 billion pounds by 2016.

Photo of Best Buy store sign by Lynn Watson via Shutterstock.

Source URL: http://www.greenbiz.com/blog/2012/04/24/how-best-buy-makes-money-recycling-america%E2%80%99s-electronics-and-appliances

NRDC OnEarth

Meet the Change Makers: Maersk Gets Shipshape | OnEarth

2011-10-13 Adam Aston

How the world’s largest shipping line orders up efficiency. Maersk Line executive Jacob Sterling tells us how.

If global commerce has a circulatory system, it’s the network of thousands of container vessels that ply the world’s oceans, moving goods from port to port. On a typical run, one of these floating juggernauts might pick up thousands of tons of the latest e-gizmos from Shanghai, then a load of toys from Hong Kong to deliver to U.S. consumers. On the return trip, it might haul grain and other commodities from the Midwest, along with recycled paper and metal scrap harvested from New York City’s trash. Over the past half-century, the worldwide adoption of neatly stackable, truck-sized container boxes has driven down freight costs by 99 percent while spurring growth in global trade nearly 100-fold. Without the humble container ship, your glossy iPad would still be a figment of some designer’s imagination.

The dark side of this oceanic trade boom is pollution. Because they burn “bunker fuel” — the dirtiest and therefore cheapest type of oil — the world’s floating freighters emit staggering volumes of black, sooty pollution. Recent EU estimates suggest that in a single year, a single gargantuan container ship vents the same amount of smog-forming sulfur oxide (SOx) gases as 50 million cars annually. By that count, it takes less than two dozen of the largest container vessels to belch out the same amount of pollution as the world’s entire stock of roughly one billion vehicles. In fact, the world’s freighter fleet is responsible for about 3.5 percent of global warming emissions, about twice the share of the aviation sector.

In the face of these numbers, Maersk Line, the world’s largest operator of container vessels, is taking steps to green its operations. This isn’t an entirely altruistic effort on Maersk’s part — it knows new air-pollution rules are soon tightening in both the EU and the United States and wants to get the jump. Last February, the Copenhagen-based company announced that it plans to build the largest, most energy-efficient container ships on the seas. In a deal with Korea’s Daewoo Shipbuilding & Marine Engineering, Maersk inked plans to buy 10 new energy-efficient vessels, with options for 20 more, to be delivered by 2016. They ain’t cheap: At around $190 million apiece, and more than 1,300 feet long, the new ships will carry 18,000 containers apiece — 16 percent more than today’s largest vessels. Maersk says they will emit 20 percent less carbon dioxide per container, and featuring advanced new engines, consume 35 percent less fuel per container.

OnEarth’s Adam Aston talked with Jacob Sterling, Maersk Line’s head of climate and environment, about how the company’s very big boats can make a smaller impact on the environment.

Freight ships are among the largest mobile objects in the world. How do you decrease the environmental impact of their operations?

One way is what we call “slow steaming.” In a vessel as big as a freighter, if you cut speed by 20 percent, we found you cut fuel consumption and CO2 emissions by as much as 40 percent. We don’t run all lines 20 percent slower all the time, but we aim to do it as much as possible. For example, we may run slow on a delivery of low-value scrap metal and paper going from Europe to China, but boost speed on the return trip when we’re moving more valuable, time-sensitive fashion apparel. Also, if you slow a given vessel down by 20 percent you might need to add more ships to that route to ensure reliable service for the customer. Overall, though, we see 5 to 15 percent savings in fuel and CO2 emissions on routes that are slow steaming.

Are your big shipping customers asking for greener shipping options?

It’s growing in importance and is part of a mix of services they are seeking. But it can be challenging for them because the push to save energy and cut costs runs counter to many years of trying to make supply chains more efficient. That means that until now the paradigm has been: faster, faster, faster. So much so that in 2007, we took delivery of new, super-fast freight vessels — compared to regular freighters, they’re practically speed boats — that could go almost 30 knots [35 mph]. Conventional vessels cruise at around 25 knots [29 mph], and slow steaming is 20 knots [23 mph].

But now we’re selling off the speed boats because they’re so inefficient at slower speeds. Instead, the vessels we will take delivery of this year will have wide hull shapes and advanced engines that recapture waste heat, to be more efficient, not faster.

Is there any promise in efforts to replace the pollutant-heavy bunker fuel with biofuels?

We’re looking into it. But the volumes we need mean it’s a ways off still. The first generation of biofuels has been disappointing. Often these fuels don’t score well in terms of how much CO2 they actually save [over their entire life cycle] relative to fossil fuels. And the quantities, so far, are too low for our needs. But we’re optimistic. Unlike jets, which need very pure biofuels that remain stable at very low temperatures, our engines could work on biofuels that are less refined. It would certainly help with the challenge we face of getting sulfur out of our fuel supply, because biofuels have close to none.

In port cities such as Los Angeles, Seattle and Hong Kong, freighters are a major source of air pollution. How can you change this?

While in port and while approaching them, we’ve already begun to switch to cleaner marine diesel fuels. In Hong Kong, one of the world’s busiest ports, we led this effort, voluntarily, in a way that led about a dozen other shipping lines to do the same.

In port, the cleaner marine diesel we use is closer to automotive diesel. In Hong Kong, for instance, the fuel we’re using has just 0.1 to 0.5 percent sulfur, whereas regular bunker fuel has up to 20 times more. Bunker fuel isn’t like normal oil. It’s more like asphalt. It has to be heated first before it can be pumped into engines to be burnt.

What about using plug-in electric sources in port, as are offered in Los Angeles and other ports? Are those a factor in cutting pollution, and are they spreading in use?

Shoreside power is certainly a way to cut pollution — but it’s only an option in ports. We are looking into shoreside power, but it does have the downside that we then become dependent on the power sources available locally. Most often electricity production is based on fossil fuels, so it is not a silver bullet.

How well is the global shipping business prepared for the inevitability of rising oil prices?

Higher and more volatile fuel prices have become the new normal in the shipping industry. Increasing fuel prices increase the price on transportation, but they also has the effect that those shipping lines that are best at saving energy and fuel save a lot of money and are more profitable. So increasing fuel prices can actually drive development of cleaner shipping.

Step back and consider the full scope of Maersk Line’s efforts to green its operations. What has been the overall impact?

Since 2007, we have reduced our relative CO2 emissions by more than 14 percent per container moved. This is due to the introduction of slow steaming, as well as our continuous focus on running our vessels more efficiently. In terms of changing the culture of our company, it’s difficult to say. It has always been in the values of Maersk Line to protect the environment and try to be a good global citizen. But now environmental performance is a key element of our business strategy. I think that we as employees will become more aware of the role we play in driving Maersk Line and the shipping industry towards better environmental performance.

How do you feel the industry as a whole is responding to this challenge?

I think that the industry could step up its efforts to develop CO2 regulations for shipping. And Maersk Line strongly supports the goals of the International Maritime Organization to develop them. But without global CO2 regulations for shipping, the sector as a whole risks being seen as a laggard even though it has real potential to drive the transition toward an economy that uses fewer fossil fuels and produces less CO2.

Sidebar: Truth Squad

NRDC’s Rich Kassel weighs in on the pollution challenge facing the world’s shipping lines

Last June in Belgium, Maersk CEO Eivind Kolding told leaders of the world’s great shipping lines that if they are to maintain their role as primary carriers of the world’s goods, the industry must change. As environmental concerns multiply and technology improves, he said, the industry must reduce emissions and clean up operations.

Prodding its peers toward greener practices is nothing new for Maersk. The company “has consistently been ahead of the pack on a wide range of environmental issues,” says Rich Kassel, senior attorney and director of NRDC’s clean fuels and vehicles project. “It has continually signaled where environmental performance will go next.”

Maersk voluntarily lowered sulfur levels in its fuel at U.S. ports years before rules required it. Other industry players resisted the move, arguing that the use of high-sulfur bunker fuel was the only way to stay profitable. But emissions from the dirtier bunker fuels take a huge toll, both on nearby communities — typically low-income communities of color, which bear the brunt of the harm — and nationally, causing tens of thousands of premature deaths every year, as well as increased asthma emergencies and other serious health problems.

Maersk proved that it was possible to use cleaner fuel and still make profits. And its move made it easier for the International Maritime Organization and government regulators to require its competitors to follow suit. “When Maersk shows that something works, it’s easier to advance policies that change the entire industry,” Kassel says.

In the wake of Maersk’s switch to cleaner fuel, the IMO adopted new rules that will soon require all ships to use cleaner fuels whenever they are operating within 200 miles of U.S. coasts. Starting in 2015, ships in this zone will use fuel that contains 97 percent less sulfur than today’s average. This switch will translate into 14,000 fewer premature deaths and $110 billion in health care savings per year by 2020, Kassel says.

—Adam Aston

Original URL for story: http://www.onearth.org/article/meet-the-change-makers-maersk-gets-shipshape

GreenBiz

Are We Entering Cleantech’s Dark Ages? | GreenBiz

2011-08-24 Adam Aston

The budget brinksmanship that, amazingly, lasted all the way into the first days of August pushed me over the edge. Whether a willful choice, or some kind of subliminal denial, I opted for a partial mental vacation in recent weeks, trying to tune out from the mostly dismal news about elections, energy and environment.

But all vacations must end, and as distasteful as the political process has been for the last few weeks, the late-summer news cycle holds potentially big impacts for the world of cleantech.

From policies enacted and planned to electoral and financial developments, all signs suggest we’re moving from relative boom times for cleantech into what will almost certainly be dark days.

Cleantech’s “Age of Austerity”

Let’s start with the fallout from budget deal, known officially as the Budget Control Act (BCA) of 2011. Scanning a few weeks’ worth of news releases from Bloomberg New Energy Finance (BNEF), the prospects for cleantech finance are nothing short of grim.

“For the clean energy sector, the Act heralds an era of austerity in which current subsidy programmes may not be extended beyond their current funding,” wrote Stephen Munro, a policy analyst at BNEF, in a research note on Aug 5 titled “An age of austerity for clean energy?”

The BCA agreement requires cuts of $917 billion in discretionary spending. Clean energy programs aren’t named specifically, but they fall under the discretionary spending portion of the budget, Munro points out.

Programs are likely to become vulnerable as they come up for renewal. First up is the Treasury Department’s “1603” cash grant program for early-stage project investment, which expires at the end of this year.

For solar and wind developers formerly dependent on tax equity finance — which evaporated as a result of the mortgage-backed security crisis — these 1063 grants, which can cover 30 percent of a project’s upfront costs, have been a lifesaver. Last December, the Solar Energy Industry Association estimated that the grant program had made possible more than 1,100 solar projects in 42 states, with a total investment value $18 billion.

Similarly, the 100 percent bonus depreciation incentive for new equipment and property purchased for renewable energy projects sunsets soon. Known by the unwieldy acronym MACRS (short for Modified Accelerated Cost-Recovery System), the federal program allows businesses to accelerate deductions for the capital investments to five years, or just one, for certain bonus projects.

Renewal looks “unlikely” for either of these programs.

There’s some stirring that the tax-equity market — which the 1603 cash grants were established to replace — will rise again. ClimateWire’s Joel Kirkland recently wrote that a return to tax equity financing may be nigh (via the NYT). Given that corporate America is sitting on mountains of cash, it follows that they’ll seek higher returns than are available through Treasury bills.

Kirkland’s central example is Google, which has made seven green energy investments totaling $700 million over the past few years. Although it would be encouraging if those investments marked the start of a rush to market, that’s not the sense I’m getting from my review.

Further out, the bipartisan committee of 12 created as part of the BCA boondoggle is required to come up with another $1.5 trillion in cuts over the next decade. For wind, solar and geothermal projects, tax credits end as early next year, and deadlines continue through 2016.

What’s more, the fisticuffs aren’t over. The Act doesn’t make adjustments to the overall budgets for the Energy Dept. or Environmental Protection Agency or any of their sub-programs, such as ARPA-E. Yet these budgets, Munro points out, will be among the first to be addressed when lawmakers return from their summer recess on Sept. 5. Given the bludgeoning GOP presidential aspirants have lately been administering to the EPA, it’s likely the EPA and DOE budgets could be especially tortured in the next couple of weeks.

“The debt agreement, which is focused on cuts only and not revenue increases, makes it more likely that this infant sector gets strangled before it matures,” said Daniel Weiss, a senior fellow at the Center for American Progress, a Washington policy group that advises Democrats, in an interview with Bloomberg Government.

Subsidies for renewable energy are expected to decline beginning this year, and will fall 77 percent by 2016 from their peak in 2010, according to Bloomberg News, citing data from the White House Office of Management and Budget.

Cleantech VC Investment Ebbs

Well maybe the private sector will step up and fill the gap — maybe Google’s investments are a sign of things to come, right? Probably not.

Second-quarter venture investment in early-stage cleantech startups decelerated, according to the Cleantech Group’s preliminary data for the quarter, released in early June.

Global funding hit $1.83 billion, a 33 percent retreat from the prior quarter ($2.75 billion) and 10 percent down on 2010 ($2.03 billion). Quarter to quarter VC numbers are notoriously volatile, but behind these numbers are other signals that the U.S. cleantech ecosystem is not generating a lot of new companies: Most of the deals — 66 percent by deal number, and 87 percent by value — were B-series or later stages. Funding retreated more sharply in the U.S. than Europe or Asia-Pacific.

A Dearth of IPOs

A close cousin of cleantech venture capital funding is the rate of initial public offerings of shares by young, fast growing companies. By this measure too, the climate in the U.S. is growing more anemic by the week, just when it should be offering a vigorous exit path for smart, small companies.

While the Cleantech Group data reflected a “robust” global IPO market through June, the bulk of the listings have come in China. Here in the U.S., the swooning stock market is reinforcing a sense that much-anticipated listings are likely to hold back. At GigaOm.com, Ucilia Wang captured this snapshot:

“…companies that have filed papers for IPOs (but not yet traded) include solar equipment developer Enphase Energy, smart grid tech companySilver Spring Networks, biodiesel producer Renewable Energy Group, and solar power plant developer BrightSource Energy. VentureWire reported that electric car company Fisker Automotive, and biofuel company Genomatica had also hired bankers to investigate the IPO process. But it’s seemed apparent to some of these companies that the IPO window has been slowly closing.”

Oil Prices Falling

With the economy teetering between neutral and reverse, oil prices are falling. West Texas Intermediate (WTI, the U.S. benchmark) fell to around $80 per barrel early in the month, presaging a fall of 40 cents per gallon at the pumps, if the price signal follows through.

Lower fuel prices are salve to an ailing economy, of course. But they’re trouble for companies looking to sell innovative transportation technologies, whether they’re century old automakers pushing advanced EVs or algal biofuel startups targeting their production price for $100 oil. More broadly, low energy prices dilute public urgency on energy efficiency and alternative energy.

In its Aug. 8 research note, Bank of America’s Global Energy Weekly pointed to threat of a double dip recession. By its models, a mild recession would draw Brent Crude (Europe’s North Sea reference blend) to $80 per barrel, and (more importantly to U.S. buyers), WTI to $50-60 per barrel.

While these two blends typically trade within a dollar of one another, in recent weeks their prices have diverged to record levels, with Brent trading at over $25 per barrel more than WTI. The gap reflects unprecedented levels of uncertainty with Europe’s fiscal outlook and worries the U.S. is about to tip back into recession.

Is It Darkest Before the Dawn?

If all these harbingers from the political and economic arenas weren’t enough, we’ve also had one of the most extreme and disaster-filled weather years ever — with 2011 already bringing more billion-dollar catastrophes than in any other year, according to NOAA.

And to top it all off comes news from the Energy Information Administration that U.S. carbon emissions rebounded by more than 3.9 percent last year, the sharpest uptick in more than 20 years, as industrial activity, power generation and travel volumes returned to norms depressed by the Great Recession.

It’s enough to make anyone want to go back on vacation, at least until Labor Day, or maybe Groundhog Day, or … anytime after November 6, 2012.

But perhaps I’m overly pessimistic — I’d love to know if you’re seeing anything out there in the world that offers some hope for a resurgence of cleantech’s potential?

_{Photo CC-licensed by}_{Samuel Stocker}_.

Check out the original here: http://www.greenbiz.com/blog/2011/08/24/are-we-entering-cleantechs-dark-ages

New York Times

Utilities Turn to Mergers as Demand for Power Slows | New York Times

2011-06-16 Adam Aston

The slowdown is spurring a fresh cycle of deal-making among publicly traded utilities. Not unlike the wave of consolidation that came after deregulation in the 1990s, major electricity players are looking to get bigger to protect their bottom lines.

So far this year, utilities in the United States have announced mergers and acquisitions with a total value of $44 billion. That compares with $30 billion in all of 2010, according to Thomson Reuters.

: A Progress Energy nuclear plant in New Hill, N.C. The utility’s merger with Duke Energy is pending.

If approved, Duke’s Energy’s $26 billion deal in January to buy Progress Energy would create the country’s largest utility. The combined company would own power plants with 57 gigawatts of capacity, generate $22.7 billion in revenue and serve 7.1 million customers across six states.

The surge of deals “marks the acceleration of a long-awaited consolidation of the U.S. electric utility industry,” said Todd A. Shipman, credit analyst of utilities and infrastructure ratings at Standard & Poor’s.

By his take, today’s deal-making will pick up from the previous era of consolidation. Since deregulation, the industry has shrunk to roughly 50 publicly traded companies, from 100. That number could be halved to 25 in as little as five years, Mr. Shipman said.

While the usual financial pressures to fortify balance sheets and improve credit quality are once again pushing mergers and acquisitions, environmental dynamics are playing a bigger role than in the past. Utilities — facing pending regulation on greenhouse gas emissions and renewed enforcement of older rules on air pollution — must reckon with the rising costs of compliance.

The added expenses come just as growth in electricity demand is being crimped by efficiency gains. Electricity usage increased 0.5 percent a year on average for the decade that ended 2010, down from 2.4 percent a year during the 1990s, according to the Energy Information Administration.

The anemic figures represent the tail end of a six-decade deceleration of electricity demand. The rate peaked in the 1950s, at 9.8 percent a year, during a period of supercharged industrial growth and home construction.

Customers’ plans reflect a secular shift. Nine out of 10 businesses and 70 percent of consumers have set specific goals to lower their electricity costs, according to a recent study by the Deloitte Center for Energy Solutions with the Harrison Group, a research services firm. Nearly a third of companies polled have goals to self-generate electricity, whether through solar panels, reuse of wasted heat or other methods.

Utilities are adjusting to the new reality. With customers tapering their electricity use, Consolidated Edison is deferring the installation of transformers and other costly capital equipment in New York, said Rebecca Craft, the company’s director of energy efficiency and demand management. Con Ed trimmed its outlook for how much the city’s appetite for power will grow in the coming decade to 1 percent a year, from 1.7 percent.

“Practically every utility today is thinking about flattened growth of demand for energy,” said Gregory E. Aliff, a vice chairman of energy and resources at Deloitte.

“In the last wave of utility mergers, it was more offensive — companies were seeking growth,” he said. “Today is different: the industry is more on the defensive. Companies face a question of how to grow, and consolidation is a way to grow earnings.”

New environmental regulations are only heightening the growth challenge. The industry faces potentially sizable bills to meet a raft of air pollution rules being pushed by the White House.

Utilities with a big reliance on coal face the steepest emissions penalties. American Electric Power, which derives about 85 percent of its power from coal, recently estimated the new rules could cost $6 billion to $8 billion in coming years. The money would pay for adding filters to power plant smokestacks, closing coal-fired generators and switching to lower-emission natural gas generators.

Some merger-minded utilities are shedding assets to lower their exposure to such rules. As part of its $7.9 billion deal to buy Constellation Energy, Exelon plans to sell a batch of coal-fired plants. While coal fuels 12 percent of their current generation, the companies aim to halve that share after the merger.

A.E.P., Duke and Exelon declined to comment.

Unlike in previous periods of consolidation, regulators seem more willing to approve deals, given the sluggish economy and job market. Previously, the process could drag on for years, but recent mergers have been moving along more quickly.

This month Connecticut regulators effectively approved Northeast Utilities’ tie-up with NStar, despite opposition from the state’s attorney general. When the $6.9 billion deal including debt was announced last October, the companies pledged that “no broad-based, corporatewide layoffs or early retirements are planned.”

Said Mr. Shipman of S.&P., “In most of these deals, executives have been careful to emphasize that jobs will be spared, rather than cut.”

See the story original story here http://dealbook.nytimes.com/2011/06/16/utilities-turn-to-mergers-as-demand-for-power-wanes/

Ensia

Elusive efficiency: Why saving energy is so hard and what can we do about it? | Ensia

2010-12-08 Adam Aston

When it comes to reducing fossil fuel use, increasing energy efficiency has obvious appeal: help the environment, boost energy security and save money, too—without the grit-your-teeth-and-get-by-without attitude of 1970s-style energy conservation. Not only that, but boosting the amount of work we squeeze out of each kWh or Btu is the cheapest, most plentiful and fastest tool we have for moving toward a more sustainable energy future. Many efficiency fixes, experts point out, save so much it would be foolish to ignore them.

Americans have made some moves to enhance efficiency: Per capita energy use has fallen by 14 percent in the past three decades in the U.S., and since 1970 the energy necessary to create each dollar of GDP has been halved. Still, based on comparisons with other countries, that figure could well be halved again. And a recent report by the National Academies suggests Americans could reduce energy use 17 to 22 percent by 2020 and 25 to 31 percent by 2030 if we adopt existing and emerging energy efficiency technologies.

Why isn’t this “low-hanging fruit,” as efficiency is invariably called, being plucked? In the face of logic, incentives, regulatory mandates, new efficiency-enhancing technologies and even moral imperative, consumers remain surprisingly ambivalent about, or even muddled by, the options. Part of the problem is how human behavior often stymies better intentions. Another factor is the more banal reality that bureaucracy and a lack of capital can slow any revolution in its tracks, no matter how cost-effective it might be.

“The potential to reduce the energy we waste is compelling,” Kenneth J. Ostrowski, a senior partner at global management consulting firm McKinsey & Co., said in announcing a 2009 study of the U.S. economy. “However, to unlock the full potential, we need a coordinated national and regional strategy to overcome barriers and scale up the deployment of existing energy efficiency technologies.”

Consider the Value

First, take a step back and consider the value efficiency offers.

In an influential study published in 2008, psychologists Gerald T. Gardner and Paul C. Stern assessed the impact of around 30 steps households could take toward increasing their energy efficiency, all using currently available technologies. The sum of the efforts, they found, could cut U.S. home energy use by up to 30 percent. Since residences account for nearly one-third of total energy use, these savings could trim 11 percent from overall U.S. energy consumption.

In its 2009 report, McKinsey identified waste and other savings opportunities amounting to 23 percent of the U.S. energy pie, excluding the transportation sector. The cost of energy-saving upgrades, McKinsey found, could be entirely paid for within a few years by the resulting reduction in spending on energy. For a total investment of $520 billion, the U.S. could trim some $1.2 trillion from its energy costs by 2020. “Energy efficiency should be elevated to a national priority,” said Ostrowski.

The savings would be greater still if the calculation considers future innovation, says David Goldstein, energy program co-director for the Natural Resources Defense Council. In his 2010 book Invisible Energy, Goldstein estimated savings of 80 percent are possible by 2050 if we include technologies now in the pipeline, as well as those likely to be introduced given what we know about the pace of innovation.

Commenting on a National Academy of Sciences study estimating that energy savings of 30 percent are possible with today’s technology, Goldstein points out that by factoring in improvements in these technologies, the efficiency resource balloons in size to trillions of dollars of growth potential.

Culprit: Confusion

So if these gains are waiting to be made, what’s holding up the great efficiency revolution?

One culprit seems to be confusion. Consumers face a challenge connecting big, abstract gains with more familiar day-to-day decisions, such as installing CFL lightbulbs. And Americans are — for now, at least — so muddled about energy and efficiency that we’re largely unable to identify best choices about how to cut consumption.

In 2009, a research team led by Shahzeen Attari at Columbia University’s Center for Research on Environmental Decisions surveyed 505 subjects to assess their perceptions of energy consumption and savings for a variety of household, transportation and recycling activities. The team found that subjects sometimes overstated the impact of visible actions that offered relatively little energy savings, while profoundly underestimating the impact of less-visible steps that saved 10 or even 100 times more energy. While the test did not formally include cost estimates, the data suggest that respondents tended to underestimate choices with bigger impacts that were more costly.

Interestingly, respondents who identified themselves as eco-minded tended to be less accurate than the general public. Emphasizing that the study wasn’t testing the causes of these misconceptions, Attari points out, “The well intentioned may focus on behaviors that they do, and pay less attention to the ones they don’t do.”

But the study offers one piece of the puzzle to help encourage efficiency: Enlighten consumers about their consumption. Some utilities, for example, are tinkering with household gizmos designed to deliver data to residents so they can see their energy use. That kind of personalized instant feedback on gains made may be just what people need to make pursuing energy efficiency seem worth their while — particularly if reducing energy use is tied to something that makes a difference to them.

High costs, such as the price tag for insulation or a new, energy-efficient furnace, can be a barrier to major green upgrades.

“Go after what matters most to a consumer,” says Attari. “If they care about security, talk about energy independence. If they care about economics, talk about cost savings. If they care about their grandkids, talk about protecting future generations. If they care about biodiversity and species extinction, talk about polar bears.”

Set the Pace

Consumers are quick to state a willingness to pay for green features. But in practice, another impediment to adopting energy efficiency measures is our aversion to paying large amounts up front, even if the investment promises long-term savings. High costs, such as the price tag for insulation or a new, energy-efficient furnace, can be a barrier to major green upgrades.

Some cities have pioneered an innovative solution to this problem. Adapting a model historically used to pay for sewer systems, sidewalks and other public works, planners in Berkeley, Calif., devised an approach — called Property Assessed Clean Energy, or PACE — that financed the up-front costs of big-ticket efficiency investments by issuing a bond. Property owners could, in turn, borrow those public funds to pay for green upgrades. To pay back the loan, homes that tapped into PACE funds see their taxes rise incrementally over 20 years.

“PACE helps consumers get past the hurdle of paying up-front costs,” said Claire Danielle Tomkins, director of research at the Carbon War Room, at the Business Climate 2010 conference in New York.

To date, more than 20 states have passed laws enabling PACE programs. Perversely, however, Washington stymied the progress of PACE deployments. In the wake of the global financial crisis, federal authorities blocked mortgages attached to PACE bonds, arguing that the added payments increase a borrower’s monthly costs and thereby add risk to still sickly mortgage markets.

Rebound

Interestingly, thanks again to human nature, even implementing measures that improve efficiency will not necessarily result in reduced energy use.

Energy efficient washing machine — Households that installed high-efficiency washing machines also boosted washing volume 5.6 percent.

One challenge is something called the “rebound effect”, or Jevons paradox. By definition, greater efficiency lowers the cost to use a resource or technology. But as goods and services grow cheaper, people tend to consume more of them .

When these two dynamics collide, efficiency gains can be diluted by increases in use. One study found that households with high-efficiency washing machines boosted the volume of washing they did on average by 5.6 percent. This increase didn’t negate the 40 to 50 percent reductions in water and energy consumption the units delivered, but it did erode total efficiency gains, according to a 2008 RAND paper by economist Lucas Davis.

For another twist on how human nature can stymie efficiency’s efforts to cut energy use, consider America’s love affair with big, fast cars. The technology to dramatically boost vehicle efficiency has been progressing for decades, but technology upgrades that could have saved energy have instead gone to soup up performance. While mileage barely budged between 1990 and now, average horsepower surged 77 percent, to around 230 today. As a result, today’s mild-mannered Toyota Sienna minivan offers about as much horsepower as Ford’s fastest ’72 Mustang.

More Carrots, More Sticks

Alas, there is no single fix for efficiency elusiveness. Logjams like the PACE policy must be dismantled one by one. And because human behavior is so complex, approaches to altering it must take many forms.

For now, incentives are the most politically saleable strategy to induce efficiency savings. As part of the 2009 stimulus bill, the U.S. Department of Energy doled out hundreds of millions to boost efficiency programs.

More vigorous mandates are making a comeback, too. Most visible, perhaps, has been the rollout of higher mileage standards for cars. And in 2010, DOE announced dozens of tough penalties against companies selling appliances, plumbing and lighting without certifying that they meet energy and/or water efficiency standards. Such well-crafted rules promise to speed change while obviating many of the psychological traps that can distract consumers. When we can’t opt for a less-efficient technology, our purchasing decisions get easier.

There may even be a public appetite for a yet heavier regulatory hand. A national survey conducted by the Mellman Group for the Union of Concerned Scientists suggests consumers may prefer tougher mileage rules. The study found that about 74 percent of voters favor tougher federal goals requiring that average fuel efficiency rise to 60 mpg by 2025. Two-thirds supported the goal even if it meant a $3,000 premium on the sticker price, assuming that could be recouped in savings at the pump within four years.

Perhaps the biggest motivator of all could end up to be the market. The sharp oil price spike of 2008 caused an unprecedented stampede away from gas-guzzling vehicles and triggered broader efforts to cut energy use. Similar increases in the cost of electricity or natural gas could do much to motivate consumers to cut back by improving their energy efficiency.

Advocates for a tax on carbon emissions generated by energy use argue such a fee would trigger the adoption of energy efficiency measures in an orderly fashion by preventing such on-again, off-again shifts toward efficient technologies. Better to create an incentive to put efficient systems into place ahead of time, they argue, than to wait for unpredictably high energy prices to return and force these shifts chaotically.

Indeed, better we all learn efficiency-improving behaviors while we can afford to.

A version of this feature originally appeared in the Fall 2010 issue of Momentum magazine, Ensia’s predecessor.

Check out the original story at Ensia.com:

http://ensia.com/features/elusive-efficiency/?viewAll=1

Adam Aston