Apparently, June is Innovation Month in New England.  So I thought I would write a bit about one of the perplexing things about cleantech investing in New England.

Now, every region ends up being a bit self-centered at times, and New England is certainly no exception.  But it's a commonly-held and oft-stated position among those involved in energytech innovation in this region that "Massachusetts is THE world-class center of research in energy and clean technologies".

If you are one of those who takes this kind of statement literally, then it probably comes as some surprise to then see that California typically attracts significantly more cleantech venture dollars than Massachusetts, and even New England overall.  I've been part of meetings with investors and other industry participants here in the Boston area where the goal is put out there that Massachusetts should -- especially given its primacy in energy R&D! -- be able to top or at least equal California in terms of cleantech entrepreneurial activity.  And for lack of other trackable statistics, the disparity in cleantech venture capital spending is then lamented as a sign that Massachusetts is "falling behind."

I've been one to say such things myself at times.  Being here, surrounded by so many great researchers in so many varied energy and clean technology fields, really does give one the sense of being in a world-class research cluster that is second-to-none.  And then, as an investor, when I find myself inevitably investing on the west coast, I start wondering "Why?"  

Why do I seem to generally find California a better place to invest in (when I'm wearing my VC hat, versus my other private equity roles), when there's so much innovation around here?  Is it that that's where the dominant amount of cleantech venture dollars are sitting, and therefore more entrepreneurs go there?  Is it something about a disparity in entrepreneurial culture in general between the regions?  Is it just that MIT researchers hate venture capital while many California researchers seek it?  In other words, is there something "wrong" with Massachusetts (from a self-centered VC point of view)?  Or is it simply that California is so much bigger than Massachusetts, in terms of people and economy, so research cluster or not is a moot question?

I decided to take a really quick look into the question.  Starting with cleantech patents.  I wanted to test the theory that innovation is just as prevalent here as it is in California, and started naturally with patents as a proxy.  I couldn't find anyone who had already done this analysis the way I wanted it done (there are some cleantech patent tracking efforts out there, but I can't really get a tangible understanding of their methodologies, and they don't have the state-level breakdowns the way I wanted it), so I went to an online patent search engine and started searching for all published patents from 2007 to the present, with at least one inventor in the searched-for state (CA, MA, and NY).  I didn't scrub the results at all, because I wasn't looking for 100% absolutely accurate totals, I was simply looking for comparisons across regions.  Here's what I found:

As you can see, not only does it appear that California dramatically outpaced Massachusetts in terms of published cleantech patents over the past few years, but MA is even mostly behind New York state as well.  This is pretty damaging to all those Mass-philes out there who claim that this is the dominant place for cleantech innovation.  To put it another way, if you're a cleantech VC, looking at the above tallies, would you rather be in Massachusetts or California? Or even New York state?

Now two big caveats:  First of all not all patents are created equal.  This is just an unscrubbed tally of patents based on very simple search terms, and it might be that the 3 most important photovoltaic patents during this period, from an investor standpoint, were all in Massachusetts.  Or perhaps in NY, for example, a higher proportion of these patents were claimed by large corporate research arms (ie: GE) and therefore aren't accessible to venture investors.  So the above tallies might not tell the full story.  But even still -- there's a wide gulf between the number of cleantech patents published in California and Massachusetts.

Secondly, patents aren't a full proxy for innovation.  They're just a proxy of applied innovation.  For the most part, basic science research results in papers, not patents.  

In fact, I would argue that there's an important distinction between Research and Innovation.  Let me propose a taxonomy of sorts:  "Research" helps uncover basic principles, or invent entire new technology innovation areas.  "Innovation" is the application of those principles to the development of new, commercializable, patentable technology.  And then "Commercialization", the productization of that innovation and the introduction of those products to the market, is where venture and corporate capital is supposed to plug in.

So the answer might be that Massachusetts is indeed a dominant center of excellence for energy research -- but fundamental Research, not patentable technology Innovation.

This is, in fact, what I believe to be happening.  For instance, in the 2007 US Department of Energy budget, California universities and colleges received $100M in DOE support (mostly grants from the Office of Science, very basic research), whereas Massachusetts universities and colleges received $78M, a much closer amount (NY state, btw, received $84M).  And if you could map that out, I bet a 100 mile radius centered around Boston would end up being the top academic research dollar garnering area of comparable size, compared to California and New York state where the research institutions are much more spread out.  It's just one small slice of the cleantech research picture, but it does start to lend some credence to what I and others are sensing anecdotally -- that Massachusetts really is a world-class center of basic academic cleantech Research.

But basic Research.  Not Innovations ready to be Commercialized within a venture capital type time period.  

So let's go back to the original question about cleantech venture capital... In light of the above analysis, New Englanders should celebrate the fact that the region is receiving almost as much attention as the west coast in terms of early stage cleantech venture capital.  I looked it up, and thanks to the Cleantech Group's new data format for members (really a terrific job of data presentation, I absolutely love this new sortable format, kudos to them), I was able to look only at "early stage" (ie: 1st round) financings within each region:

In terms of dollars tracked by the Cleantech Group, the Northeast is only about half of the West Coast, but in terms of number of deals they're actually pretty comparable.  And as long-time readers know, because of the really broad range of capital-intensity across sectors and business models within cleantech, I always say that the number of deals, and not the dollars, is a much more accurate indicator of venture investment activity.  So the Northeast overall is right up there with the West Coast in terms of venture investments in cleantech innovation.

So Beat L.A.! and all that...  Massachusetts can declare (near) victory and walk away happy from this analysis, right?

Sort of.  I actually think what I may have identified is an unsustainable trend in the region.  If the patent-level innovation shows such a wide disparity, but the venture investments and research dollars look much more similar in number, one of three things is happening.

1. New England innovations, on a per-patent basis, are much more valuable than West Coast innovations.

2. New England cleantech investors have been harvesting available patentable innovations at a comparable rate to West Coast investors, but with a shallower pool to work from, so are going to hit diminishing returns much sooner.

3. New England cleantech investors have been more eager than West Coast investors (on average) to put venture dollars into more basic research efforts that are further away from commercialization.

The first one is probably nonsense.  And the second two possible scenarios (which aren't mutually exclusive, btw) are unsustainable.  When coupled with the fact that, anecdotally at least, the Boston cleantech venture capital community is rapidly shrinking and spending a lot of time on airplanes right now, it paints a picture that's less happy looking forward.

In other words, those who want to see a continued vibrant cleantech innovation-based economy in Massachusetts should be pretty pleased with how the region has performed to date, in comparison with California and other regions.  No doubt greatly helped by strongly supportive government policy at the state level. And they should be proud of the world-class energy technology research being undertaken here.  But they should also be concerned about the fact that there appears to be a possible disconnect between the large amount of brilliant basic energy Research being done here, and a relatively low amount of commercializable Innovation development being undertaken.  

To put it another way, there's an important R&D step between fundamental Research and venture-backed or corporate-driven Commercialization of new clean technologies, and in Massachusetts there's some evidence that this Innovation step is a relative weakness, at least when compared to some other top regions (it's not like Massachusetts is an absolute laggard or anything, but you get my point).

Massachusetts needs to be thinking about how to better hand-off all this fundamental science Research to the engineering-based Innovator community (which could be either internal or external to the research's academic setting) that can drive it closer to actual Commercialization.  

Or else the research will go elsewhere for commercialization -- or worse, go nowhere.

 

 

 

By John Addison – June 3, 2010

Ford is promoting smart charging as it now takes orders for the Ford Transit Connect, next year for the 2011 Ford Focus EV, and in 2012 the Ford Plug-in Hybrid. Ford is partnering with Coulomb Technologies to provide nearly 5,000 free wall-installed charging stations for some of the automaker’s first electric car and electric delivery van customers.

Under the Ford Blue Oval ChargePoint Program, fleets and residents in nine designated markets could receive a free ChargePoint® Networked Charging Station with the purchase of a Ford Transit Connect Electric vehicle. The nine markets designated by Coulomb Technologies include Austin, Detroit, Los Angeles, New York, Orlando, Sacramento, the San Jose/San Francisco Bay Area, Redmond, Wash., and Washington D.C. The installation of ChargePoint charging stations will begin immediately.

Ford plans to introduce five new electrified vehicles in North America by 2012, providing a range of products to meet a variety of customer needs. These include:

• A Transit Connect Electric small commercial van. Test Drive Report
• A Ford Focus Electric passenger car debuting in 2011. Test Drive Report
• Two next-generation lithium-ion battery hybrid-electric vehicles and a plug-in hybrid by 2012

If 5,000 Transit Connect Electrics are sold in the target cities prior to Focus EV sales, then charging units may all go to those customers. This will help accelerate early adoption of electric vans in fleets such as utilities, universities, goods delivery, and contractors.

New USA Jobs for Plug-in Cars and Advanced Batteries

Ford’s increased use of lithium-ion batteries is also increasing jobs in the United States. Ford will make its own battery packs in Michigan, using Focus EV cells from nearby Compact Power, an LG Chem company. The plug-in hybrid cells will be made in Wisconsin by Johnson-Controls Saft. The U.S. made new lithium-ion batteries will be used instead of the currently Mexican made nickel metal hydride batteries. Over 6,000 new jobs are coming to Michigan just for advanced batteries. “Michigan will be the place where the electric vehicle and battery-powered vehicle will be researched, developed, produced, manufactured and assembled,” said Gov. Jennifer Granholm.

The Ford Blue Oval ChargePoint Program is part of Coulomb Technologies’ $37 million ChargePoint America charging station infrastructure project made possible by a grant funded by the American Recovery and Reinvestment Act through the Transportation Electrification Initiative administered by the Department of Energy.

Coulomb Technologies Leads in Smart Charging Build-Out

Coulomb Technologies is a fast-growing venture capital backed firm headquartered in California. Coulomb’s ChargePoint® Network, is open to all plug-in electric vehicle drivers and provides authentication, management and real-time control for the networked electric vehicle charging stations. The network of electric vehicle charging stations is accessible to all plug-in drivers by making a toll-free call to the 24/7 number on each charging station, or signing up for a ChargePoint Network monthly access plan and obtaining a ChargePass™ smart card. Other future payment options include using any smart (RFID) credit/debit card to authorize a session or using a standard credit or debit card at a remote payment station (RPS) to pay for charging sessions. To locate available charging stations, visit mychargepoint.net and click “Find Stations.”

As electric cars start to ship with the new J1772 smart charging capability, Coulomb has taken the lead in installing a smart charging infrastructure with over 700 networked charging stations worldwide shipped to more than 130 customers in 2009. The ChargePoint Network provides multiple web-based portals for Hosts, Fleet managers, Drivers, and Utilities, and ChargePoint Networked Charging Stations ranging in capability from 120 Volt to 240 Volt AC charging and up to 500 Volt DC charging.

Smart charging will allow customers to save money by charging off-peak when rates are low. Major utilities also plan to inform smart charging station customers that excess renewable energy is available if that is their charging preference. Electric Utilities Facilitate Smart Grid
ChargePoint America will offer home and public charging stations to individuals and businesses. Businesses interested in applying for free public charging stations or consumers exploring an electric vehicle purchase can visit www.chargepointamerica.com for more information.

Three automakers have committed to deliver electric vehicles in designated US regions. The Chevrolet Volt, the Ford Transit Connect Electric and Ford Focus Electric through the “Ford Blue Oval ChargePoint Program”, and the smart fortwo electric drive will be introduced along with this program. ChargePoint America plans to provide 4,600 public and private ChargePoint Networked Charging Stations by October 2011.

Clean Fleet Reports about Electric Cars

Top 10 Electric Car Makers for 2010 & 2011

By John Addison, Publisher of the Clean Fleet Report and conference speaker.Content provided by and all rights reserved to CleantechBlog.com. Also check out http://www.cleantech.org

by Richard T. Stuebi


On behalf of the President of the Cleveland Foundation Ronn Richard, I was privileged to attend an all-day bull session on May 7 hosted by the White House on energy innovation. With support from the Kauffman Foundation, the White House convened this meeting to spur brainstorming among people who participate across the cleantech spectrum, presumably to surface actions that can dramatically increase the velocity and success of energy innovation.

Alas, I can’t say that I saw evidence of any concrete next steps, but I did hear a number of interesting comments from the morning sessions at the meeting:

Diana Farrell, Deputy Director of the National Economic Council: Throughout U.S. history, major acts can actually spawn and renew markets, rather than thwart them. We are at that point today with energy: energy and environmental debates have grown stale and a new policy paradigm is necessary to cut through them. Oil price spikes have preceded 10 of the last 11 U.S. recessions, so we need to eliminate this vulnerability. The history of great nations shows an ability to anticipate crises before they become too critical. But, as important as policy reforms are, it is not enough for economic robustness: entrepreneurs and innovation are essential.

Dan Reicher, Director of Climate Change and Energy Initiatives at Google (NASDAQ: GOOG): Google is working on all three critical dimensions of cleantech: capital, technology and policy. While Google’s actions on capital and technology for cleantech are well-known, their work on policy is aimed at accumulating and providing more and better information for policy-makers to set better policies.

Desh Deshpande, serial entrepreneur, including Chairman of A123 Systems (NASDAQ: AONE): In cleantech, the center of gravity for innovation is not at the national laboratories, and is reverting away from the private sector, instead focusing in the universities. The big challenge is not so much inadequate amount of funding on cleantech innovation, but rather inefficient commercial capture of the innovation that actually happens.

Carl Schramm, President of the Kauffman Foundation: Lots of challenges ahead for cleantech entrepreneurship. Angel investors as well as venture firms stand to be severely punished by proposed regulations aiming to "reform" hedge funds. Businesses of all sizes are becoming too reliant on the government, blunting their intimacy with actual market needs. The link between university and commercialization is broken and needs to be reset, as the rate of new business spin-outs from universities is plummeting. To help combat these challenges, Kauffman is sponsoring an Energy Innovation Network, which aims to help "connect the dots" in faciliating entrepreneurship in the cleantech sector.

Tom Baruch, Managing Director at CMEA: Universities (not corporations) will be the center of innovation for the foreseeable future. Successful cleantech business models will need to be much more capital efficient than many of the most prominent cases to date. Cleantech entrepreneurs cannot assume any “green premium”: their products/services must stand on their own to deliver real economic value to paying customers.

Dr. Michael Crow, President of Arizona State University: Universities can no longer afford to suffer from the delusion that being smarter is sufficient to be the best. University excellence in the future will be defined by five mantras: (1) local relevance, (2) speed, (3) connectivity, both within university and to outside, (4) entrepreneurship, and (5) intellectual innovation.

Dr. Yet-Ming Chiang, Founder of A123 Systems and Professor of Materials Science and Engineering at MIT: True freedom to innovate at a university only occurs after professors gain tenure. To dramatically increase innovation, universities must restructure how they evaluate professors for tenure: at MIT, new products/services are now part of the review, but jobs created should also be a criterion. Fast-tracking of green cards for promising talent is also critical: over the past 5 years, 86% of foreign graduate students at MIT indicated a desire to stay in the U.S., but only 56% have stayed – and the 44% that left departed mainly because of an inability to stay, not because they didn't want to stay, in the U.S.

As interesting as these comments from the morning discussions were, the workshop in the afternoon got bogged down in very wonky policy topics that frankly bored me.

And, also interesting was who was NOT at the workshop: little or no representation from big energy companies (petroleum or utilities). Is the White House (along with Kauffman) saying that incumbent energy players are not viewed as part of the cleantech solution?



Richard T. Stuebi is a founding principal of NorTech Energy Enterprise, the advanced energy initiative at NorTech, where he is on loan from The Cleveland Foundation as its Fellow of Energy and Environmental Advancement. He is also a Managing Director in charge of cleantech investment activities at Early Stage Partners, a Cleveland-based venture capital firm.Content provided by and all rights reserved to CleantechBlog.com. Also check out http://www.cleantech.org

By John Addison (5/27/10)


Toyota agreed to purchase $50 million of Tesla’s common stock subsequent to the closing of Tesla’s currently planned initial public offering, giving Toyota over 2 percent of Tesla. The investment was negotiated with Tesla's purchase of the former NUMMI factory in Fremont, California, that once employed over 4,000 workers in a Toyota-General Motors JV plant. Tesla and Toyota intend to cooperate on the development of electric vehicles, parts, and production system and engineering support. Neal Dikeman reported on Friday the significance of this for Tesla, Toyota, and California jobs.



In 2012, new Tesla S sedan will roll-out of the plant with electric range that remarkably matches the range of many gasoline cars. Tesla is developing a roomy Model S hatchback that starts at $57,400, about half the price of the Roadster. Tesla will start delivering the Model S in 2012 from its new factory in California. The Model S will have up to a 300 mile range, far beyond the Nissan Leaf 100 mile range the Chevy Volt 40-mile electric range, and current ambitions of other electric car makers. Top 10 Electric Car Makers


Tesla will compete with other sedan makers by also offering more passenger space, more cargo space, and a premium cache. With seating for five adults and two children, plus an additional trunk under the hood, Model S has passenger carrying capacity and versatility rivaling SUVs and minivans. Rear seats fold flat, and the hatch gives way to a roomy opening.


With a range up to 300 miles and 45-minute QuickCharge, the Model S can carry five adults and two children in quiet comfort. The roomy electric car starts at a base price of $57,400, before the $7,500 federal EV tax credit and additional tax credits in many states. Yes, it will be more expensive than sedans from Nissan, Ford, and GM but with more battery storage for more range with 3 battery pack options offer a range of 160, 230 or 300 miles per charge.
Don’t pull-up to the Model S in your sedan and try to race. The Model S goes from 0-60 mph in 5.6 seconds with 120 mph top speed, and the promise of sporty handling in the chassis and suspension.


Panasonic Lithium Batteries and Tesla Packs


Tesla touts its expertise and intellectual property in a proprietary electric powertrain that incorporates four key components—an advanced battery pack, power electronics module, high-efficiency motor and extensive control software.

Tesla delivers more range per charge than other electric vehicles by including more lithium batteries. Tesla’s relationship with battery supplier Panasonic is critical. The Roadster uses 6,800 Panasonic lithium-nickel consumer-sized batteries integrated into a Tesla designed battery-pack with unique energy management and thermal management. The new Tesla Model S will use up to 5,500 Panasonic batteries.


Tesla has been skillful in developing strategic partnerships. Tesla also has a relationship with Daimler to supply technology, battery packs and chargers for Daimler’s Smart fortwo electric drive. Daimler holds more than 5% of Tesla’s capital stock. Daimler has orders for Tesla to supply it with up to 1,500 battery packs and chargers to support a trial of the Smart fortwo electric drive in at least five European cities. Tesla delivered the first of these battery packs and chargers in November 2009. Daimler also engaged Tesla to assist with the development and production of a battery pack and charger for a pilot fleet of its A-Class electric vehicles to be introduced in Europe during 2011. Tesla has ambitions to supply other vehicle makers.



By John Addison, Publisher of the Clean Fleet Report and conference speaker.Content provided by and all rights reserved to CleantechBlog.com. Also check out http://www.cleantech.org

One thing that non-VCs typically don't have a good understanding of is how different venture investors view the risk versus reward tradeoff when it comes to managing portfolio companies.

How do VCs get compensated, besides salary?  "Carry", a/k/a profit-sharing.  And except in very few cases, carry on an entire fund, not on a per-deal basis.  Everyone in the industry is familiar with the studies that have shown that fund performance is typically determined, at least on the upside, by a handful of deals across an entire portfolio.  In other words, 1 or more really big wins drive all the performance.  And, by the way, 1 or more really big wins really drive a VC's career as well, because of the visibility they bring.  

It all sets up a dynamic where individual VCs, and overall partnerships, are motivated not to try to produce steady returns across an entire portfolio, but instead to try to maximize the slim chance that each deal becomes a blockbuster.

Let's put some really oversimplified math to it:  

$100M fund, 10 portfolio companies, each with $10M committed.  If each one creates a 2x outcome, that's $100M in return.  But if just one company creates a 10x outcome, then you could only break even with all the others and still come close to creating the same return ($90M).  If you get two 10x outcomes, or one ten-bagger and one 5-bagger, then the VC fund is sitting pretty almost regardless of what anything else in the portfolio does.  

This has a lot of implications for how VCs typically manage their portfolios.  To overgeneralize a bit:

First of all, it explains why VCs would so often pass on investment opportunities with good chances to double or triple their money.  Not that any one as an individual would pass up on the opportunity to double or triple their own money all things being equal, but if you're more motivated to find the 5-10x opportunities you'll pass up on attractive but smaller ones.  I interact with entrepreneurs all the time who have good solid businesses with good growth prospects, and yet they're frustrated at their inability to get VC interest.  Basically, this is one major reason why that happens.

Secondly, it means VCs will spend more time on their portfolio companies that are doing well, versus the companies that aren't doing well.  If they can help turn a 3x outcome into a 10x outcome, that's worth a lot more to them than working hard to turn a 0.3x outcome into a 1x outcome.  Many VCs I know have a hard time sticking to this rule, because at the end of the day as individuals with personal relationships and a sense of obligation they want to help out all their companies as much as possible, but the more hardnosed VCs will admit that this is how they try to spend their limited available time in portfolio management.  I've even heard of some big-name VCs who simply stop showing up for board meetings once the company gets off-track.  

Thirdly, it means that around the boardroom, many VCs will tend to push their companies into riskier situations when it means a better likelihood of an upside outcome.  Let me illustrate:

If the VC starts out with each company having a 30% chance of a 0x, a 30% chance of a 1x, a 30% chance of a 2x, and a 10% chance of a 10x, then if they can shift that to be 50% chance of a 0x, 15% chance of a 1x, 15% chance of a 2x, and 20% chance of a 10x, that can end up being a better odds-weighted return.

But note that, to the entrepreneur, that just became a much riskier scenario.  

How does this play out in reality?  Well, the other day someone was telling me about one cleantech company with two big-name generalist VC firms as investors.  And they were describing how, around the boardroom, there had been major disagreement between the two VC firms -- one wanted the company to be burning several hundred thousand in cash per month, the other wanted the company to be burning more than a million in cash per month.  With the real disagreement being around how quickly to push the company to bring a commercial product to market.  This is a natural outcome of all of the motivations described above, along with an expectation that one way or another these brand-name VCs could attract additional follow-on capital into the company if and when it ran out of cash.

On the other hand, I know that many of the "original cleantech crew" of sectoral specialist VCs, and some other specialist and generalist VCs with lower-risk approaches, tend to want the companies to get to cashflow breakeven as quickly as possible.  And thus they want to keep the company expenses lean.

I typically favor that last approach (albeit on a case by case basis).  I just think in slow-moving cleantech markets, rushing a product to market doesn't have the same likelihood of creating customer uptake and first-mover advantage as is often seen in other technology sectors.  So you can easily put a company in a high cash burn situation to successfully bring a product to market, and still fail.  Venture capital is risky enough, without adding further risk into a company... 

But no one knows which approach is truly best for producing investment returns.  In the boardroom anecdote above, those investors were deeply experienced and VC-savvy (certainly more so than me), and not dumb about cleantech either.  And until we see a wave of exits, no one in this industry will have proven that they know how to consistently make money.  So the right risk/reward tradeoff approach to cleantech venture investing remains a very open question.

However, to those out there urging that major amounts of government dollars be simply handed over to VCs to invest as they see fit... Make sure you really understand and are comfortable with all of the above dynamic, and what its implications would be for the successful commercialization of a broad range of clean energy and other technologies.  I am absolutely a strong proponent of government support for commercialization of clean technologies.  But not as a carte blanche to VCs... 

 

by Richard T. Stuebi



The concept of an "audit" is something that is inherently, well, unsettling. The word itself implies that you might have done something wrong, and someone is coming to catch you and punish you. For sure, no-one wants to face the prospect of an IRS audit.

Of course, that's not the sole or even main reason that I've never undertaken an energy audit for my house. It's not an excuse, but an explanation to say that I've simply been too preoccupied with other matters to go through the effort of finding a qualified firm to perform an energy audit. And, frankly, I had no idea whether an audit would cost $100 (easily acceptable) or $1000 (too much!).

So, it was with a bit of relief actually that a firm called GreenStreet Solutions sent me a mailer offering an energy audit for $199. No longer burdened with finding a firm to do the work, and knowing that the price was one I could afford, I gave them a call to schedule a visit.

I was very pleased. A two-man team from GreenStreet came to my 1978-era house for a 3-hour tour (sing along: "a 3-hour tour"), and found some pretty interesting results. I wasn't surprised to discover that certain of the walls and ceilings were underinsulated. However, I was shocked to see that the biggest source of thermal leakage was out of my basement, through the front stoop.

Armed with a host of data collected from the building envelope, thermal images from scanning, and my prior year's gas and electric bills, the GreenStreet team went off to prepare an assessment . A couple weeks later, the lead analyst returned for an evening debrief with me and my wife, handing us a bound report summarizing the findings and suggesting measures to implement.

The results: at 50 Pascals of pressure, 5135 cubic feet of air per minute were leaking through the building shell of my home, relative to a target of 2299 for a reference home of comparable size. To combat this, GreenStreet proposed three packages of solutions -- Bronze, Silver and Gold -- to reduce the leaks. To my wife and me, the Silver package looked the best -- the most bang for the buck -- entailing $9738 of outlays to save an estimated $2288 annual heating costs (surprisingly, savings on air conditioning expenses are not calculated), for a projected average payback of 4.3 years.

In addition, GreenStreet provided a bag full of goodies to further help reduce energy. For instance, we were given a Kill-A-Watt meter to measure appliance consumption rates and phantom loads. Though I haven't yet gone around the house to develop a list, it sounds like a pretty fun project some rainy afternoon.

Also, GreenStreet gave us a bunch of thermal insulating gaskets for outlets and light switches. I installed these the other day, and in removing the covers, it's really amazing to see how much thermal leakage is likely to occur through these huge uninsulated gaps. Parents: installing these gaskets would be an excellent project to give to your teenager to undertake.

As for implementing the audit results, we were prepared to authorize a go-ahead -- until the GreenStreet salesperson noted that a bill was winding its way through Congress to reimburse up to $8000 (with no ceiling on income levels) for weatherization efforts, and since the bill wouldn't be retroactive, we would be better off waiting for the bill to pass (expected this summer). We thanked him for his divulging this important opportunity, and asked him to have GreenStreet call us when the bill passed.

He further noted that a bill was moving through the Ohio legislature to reimburse the $199 we paid for the energy audit too, and informed us that we would be notified if this were to pass as well.

I was really impressed with the audit by GreenStreet -- very professional, and not pushy. The GreenStreet agent noted that their parent company was Vectren (NYSE: VVC) -- a gas and electric utility based in Southern Indiana -- which leads me to wonder if all energy audits should be performed by companies that have a corporate parent that is a utility possessing sufficient financial wherewithal and expertise on energy-related issues.

However, unless the utility has revenue/profit decoupling mechanisms in place, it's clear in my mind that an audit can't effectively be done by the local utility, who may be subject to conflicts of interest by threatening to cannibalizing their core business from reducing energy consumption.

In all respects, my wife and I actually enjoyed this audit, and recommend a similar type of audit for anyone who wants to make their personal contribution to the cleantech challenge.


Richard T. Stuebi is a founding principal of NorTech Energy Enterprise, the advanced energy initiative at NorTech, where he is on loan from The Cleveland Foundation as its Fellow of Energy and Environmental Advancement. He is also a Managing Director in charge of cleantech investment activities at Early Stage Partners, a Cleveland-based venture capital firm.Content provided by and all rights reserved to CleantechBlog.com. Also check out http://www.cleantech.org

Most of my friends know I’m not a huge fan of EV startups. They take massive amounts of capital, the end customer (i.e. you and I) tends to be very sophisticated, demanding, and a pain in the neck, the technology is extremely challenging and I don’t believe the startups understand their long term costs as well as they think they do. But worse than that, the competition is very, very good and well entrenched. So while I love the concept of EVs and more specifically Plug in Hybrid EVs, I’ve been a huge skeptic of EV venture deals.

But . . .

• Go Tesla! The Toyota tie up is an exciting move. Toyota gets access to the EV business as a hedge against the possibility that GM's Chevrolet Volt and the Nissan Leaf cleaning its clock and take the mantle of most green car company away, plus they get a massive much needed dose of positive PR that’s worth their $50 mm investment all by its lonesome to counteract the legions of recent “Toyota’s quality just went to hell” articles and the latest “let’s grill the Toyota executives” push in Washington. This is good.

• Toyota gets a great use for the recently shut down NUMMI plant in California, making them look like the hero in that story without having to actually operate a high cost union plant again (apparently a large part of the reason they got out of it). For those that missed that story – NUMMI was a GM – Toyota JV in Fremont, the last auto plant west of the Mississippi, and apparently Toyota’s only union facility. When GM went bust (sorry when you and I decided we liked losing money in the car business), Toyota took the opportunity to back out of the JV, leaving a huge hole in the local economy (it was just about the only customer for a number of local manufacturers). California’s political bosses get a brief reprieve from their shellacking by helping with big tax breaks to ink a deal that may bring back 10% of the lost jobs (about 10 of the top legislators and administrators joined the Governator to announce it).  Part of the deal here is that Tesla Motors is buying the plant with heavy tax breaks and plans to build its still to be launched mass market sedan there.

• The venture capitalists who backed Tesla get a new investor to pony up a chunk of the massive cash that will be required at good valuations. Even better, the backing of Toyota in my mind drastically increases the chances that a Tesla IPO can get done, despite the huge questions analysts have had on their near term revenue prospects since they filed the prospectus earlier this year.

• You and I, who are funding a big chunk of Tesla anyway with the massive $400 mm+ DOE loan guarantee, now get a foreign auto company to invest underneath us. (Of note this will be our second multi-hundred million investment into that part of the San Francisco Bay Area, since we are doing the same thing for the solar start-up Solyndra a couple of miles down the road.)

• Tesla gets much needed cash, a cheap ready to go plant without union labor requirements, and access (if they are smart enough to leverage it) to the considerable manufacturing , marketing , and distribution talents of what has been up until recently the best run auto manufacturer in history. With it comes the automotive street cred that they are sorely lacking.

Filed under the “what’s the real story” side – a couple of questions have been raised by various analysts in the press.

1) Why is Toyota not doing this as a JV or operating partner? Which would make even more perfect sense from both parties perspective. There’s been no mention of Toyota helping on marketing/distribution and service, areas that Tesla will sorely need if they get rolling. But maybe it’s just early days.

2) How many of the local jobs are actively coming back? Elon Musk, the CEO of Tesla was quoted as saying 1,000 jobs were planned (there were many, many, many times that many jobs lost when NUMMI shut down), and he was apparently very ambivalent on the subject of union or non-union.
But regardless, there is a lot to like about a Tesla Toyota Tie up.

Neal Dikeman is a partner at Jane Capital Partners LLC, a cleantech merchant bank, and the editor of Cleantechblog.comContent provided by and all rights reserved to CleantechBlog.com. Also check out http://www.cleantech.org

I've been most recently reading When China Rules the World.  A fascinating treatise on what happens to the world economy when, over the coming decades, China's economy becomes paramount in the world economic system.  China and cleantech is something I've been thinking about and investigating for some time now.

Timely then to see the report from New Energy Finance (note: opens pdf) that in Q1, China was the biggest recipient of clean energy project finance, nearly double that of the amount invested in clean energy project finance in the U.S., nearly two-thirds again more than that invested in Europe.

I think it's safe to say that China will be a major driver of clean energy and water technology adoption over the coming decades.  Not only because their economy is growing so quickly.  Not only because China has only 1/5th the water per capital, as well as much less domestic energy supply and arable land, than the U.S., thus necessitating wiser use of natural resources earlier in their economic development cycle.  But also because now they've visibly committed themselves to becoming leaders in the sector and, as one regional GP told me today, "they don't want to lose face by not meeting that target."

So China will be a major mover in cleantech markets.  But what does that mean?

I believe that the developments will impact cleantech investors in three phases:

1. The rapid-growth market phase

At first, the major impact on the cleantech economy will be China as outsourced manufacturer, and China as fast-adopter market.  We are already seeing this happening.  With such strong economic growth comes strong resource needs, and many cleantech startups I speak with are already in discussions in China about potential early rollouts of technology.  Using local distribution or other types of partners, they are looking to build early projects and find early customers there.  

This requires establishing such local partnerships, however, as it's a lot easier said than done to sell cleantech goods and services into this market.  So I know many entrepreneurs and investors who are racking up lots of frequent flier miles getting back and forth.  And spending a lot of time establishing strong partnerships there as a stepping stone to actual sales.

Furthermore, as cleantech hardware markets shift toward a fabless model using contract manufacturers for their device businesses, China will naturally increasingly become the actual manufacturer of cleantech hardware systems and components, just like has happened in the IT and telecom industries.

2. The homegrown innovation phase

China is awash in liquidity.  There is a lot of external capital chasing the opportunities presented by the market, but there is a lot of internal capital as well, looking for good domestic investment opportunities in China.  Plus, there is the national commitment to establish more homegrown technology leadership in this sector.

In the next few years we will see the emergence of more homegrown Chinese clean technology startups that are developing proprietary IP.  It is already beginning in sectors (such as large-scale wind turbines) where the technology is readily adaptable from technology developed elsewhere.  But with a steady source of strong technical expertise and domestic markets available, Chinese cleantech entrepreneurs will increasingly be among those developing first-to-commercialize solutions across a number of cleantech sectors and subsectors.

For cleantech investors, finding out how to access these entrepreneurs, and develop winning deals from such relationships, is the still-unanswered question.

3.  The China-sets-the-standards phase

As the Chinese market becomes the most important global market, and especially as homegrown producers become more independent producers of technology themselves, China will hold increasing sway over the development of entire industries like smart grid communications, smart buildings, distributed generation power management, M2M communications, and other subsectors of cleantech where standards-setting will be important.  

In smart buildings, languages like Bacnet are important standards that have been brought to market by European and U.S. technology developers to date.  But in the future, what the Chinese market settles on a standard will often be what the world settles on.  

And thus China will shift from being an attractive market for western cleantech entrepreneurs to think about servicing, to a critical must-address market that will be addressed by both domestic and foreign innovators alike.

 

All of the above will happen a lot more rapidly than many might expect.

National Research Council (5/19/10)

The National Research Council issued new three reports emphasizing why the U.S. should act now to reduce greenhouse gas emissions and develop a national strategy to adapt to the inevitable impacts of climate change. The reports by the Research Council, the operating arm of the National Academy of Sciences and National Academy of Engineering, are part of a congressionally requested suite of five studies known as America’s Climate Choices.

“These reports show that the state of climate change science is strong,” said Ralph J. Cicerone, president of the National Academy of Sciences. “But the nation also needs the scientific community to expand upon its understanding of why climate change is happening, and focus also on when and where the most severe impacts will occur and what we can do to respond.”
The report suggests a range of emissions from 170 to 200 gigatons of carbon dioxide (CO2) equivalent for the period 2012 through 2050 as a reasonable goal, a goal that is roughly in line with the range of emission reduction targets proposed recently by the Obama administration and members of Congress. Even at the higher end of this range, meeting the target will require a major departure from “business-as-usual” emission trends. The report notes that with the exception of the recent economic downtown, domestic emissions have been rising for most of the past three decades. The U.S. emitted approximately 7 gigatons of CO2 equivalent in 2008 (the most current year for which such data were available). If emissions continue at that rate, the proposed budget range would be used up well before 2050, the report says.

A carbon-pricing system is the most cost-effective way to reduce emissions. Either cap-and-trade, a system of taxing emissions, or a combination of the two could provide the needed incentives. While the report does not specifically recommend a cap-and-trade system, it notes that cap-and-trade is generally more compatible with the concept of an emissions budget.
Carbon pricing alone, however, is not enough to sufficiently reduce domestic emissions, the

report warns. Strategically chosen, complementary policies are necessary to assure rapid progress in key areas such as: increasing energy efficiency; accelerating the development of renewable energy sources; advancing full-scale development of new-generation nuclear power and carbon capture and storage systems; and retrofitting, retiring, or replacing existing emissions-intensive energy infrastructure. Research and development of new technologies that could help reduce emissions more cost effectively than current options also should be strongly supported.

NRC Reports and Free Summaries

Clean Fleet Climate Action Reports

The compelling case that climate change is occurring and is caused in large part by human activities is based on a strong, credible body of evidence, says Advancing the Science of Climate Change, one of the new reports. While noting that there is always more to learn and that the scientific process is never “closed,” the report emphasizes that multiple lines of evidence support scientific understanding of climate change. The core phenomenon, scientific questions, and hypotheses have been examined thoroughly and have stood firm in the face of serious debate and careful evaluation of alternative explanations.

“Climate change is occurring, is caused largely by human activities, and poses significant risks for — and in many cases is already affecting — a broad range of human and natural systems,” the report concludes. It calls for a new era of climate change science where an emphasis is placed on “fundamental, use-inspired” research, which not only improves understanding of the causes and consequences of climate change but also is useful to decision makers at the local, regional, national, and international levels acting to limit and adapt to climate change.

The report recommends that a single federal entity or program be given the authority and resources to coordinate a national, multidisciplinary research effort aimed at improving both understanding and responses to climate change. The U.S. Global Change Research Program, established in 1990, could fulfill this role, but it would need to form partnerships with action-oriented programs and address weaknesses that in the past have led to research gaps, particularly in the critical area of research that supports decisions about responding to climate change.

Substantially reducing greenhouse gas emissions will require prompt and sustained efforts to promote major technological and behavioral changes, says Limiting the Magnitude of Future Climate Change, another of the new reports. Although limiting emissions must be a global effort to be effective, strong U.S. actions to reduce emissions will help encourage other countries to do the same. In addition, the U.S. could establish itself as a leader in developing and deploying the technologies necessary to limit and adapt to climate change.

An inclusive national policy framework is needed to ensure that all levels of government, the private sector, and millions of households and individuals are contributing to shared national goals. Toward that end, the U.S. should establish a greenhouse gas emissions “budget” that sets a limit on total domestic emissions over a set period of time and provides a clear, directly measurable goal. However, the report warns, the longer the nation waits to begin reducing emissions, the harder and more expensive it will likely be to reach any given emissions target.
We must manage and minimize the risks of climate change, says the third report, Adapting to the Impacts of Climate Change. Some impacts – such as rising sea levels, disappearing sea ice, and the frequency and intensity of some extreme weather events like heavy precipitation and heat waves – are already being observed across the country. The report notes that policymakers need to anticipate a range of possible climate conditions and that uncertainty about the exact timing and magnitude of impacts is not a reason to wait to act. In fact, it says boosting U.S. adaptive capacity now can be viewed as “an insurance policy against an uncertain future,” while inaction could increase risks, especially if the rate of climate change is particularly large.Content provided by and all rights reserved to CleantechBlog.com. Also check out http://www.cleantech.org

by Richard T. Stuebi

While it is increasingly recognized that subsidies for corn-based ethanol are bad policy, a nod must be given to C. Ford Runge, a professor at the University of Minnesota, for his pithy and merciless analysis in his note "Biofuel Backlash" published in the May/June issue of Technology Review.

In the space of just a few short paragraphs, Prof. Runge cites the work of Earth Track (a firm dedicated to exposing subsidies detrimental to the environment) projecting $400 billion of U.S. subsidies to ethanol between 2008-2022, notes a recent estimate by the Earth Policy Institute that the 2008 U.S. corn crop diverted for ethanol production would have been sufficient to feed 330 million people for a year, and provides a reference to modelling that indicates a near-doubling of greenhouse gas emissions due to changes in land-use patterns associated with corn-for-ethanol production.

It's amazing that such awful policies, which are so adverse on so many dimensions, can survive. But, in the gameboard that is U.S. energy, environmental, and agricultural policy, only grand compromises supported by the big boys can get enacted -- which are then extremely difficult to overturn when they are seen to be nothing more than gifts to their well-positioned and deep-pocketed sponsors and supporters.

Reiterating a point I've made before: I have nothing against ethanol per se. Cellulosic ethanol, if it can be accomplished cost-effectively, is a promising prospect for reducing greenhouse gases and reliance on Middle Eastern petroleum without chewing up valuable foodstuffs. But corn-based ethanol plainly sucks. And, the notion of using corn-based ethanol as a bridge to cellulosic ethanol is dubious at best.

The old adage says that a camel is a horse designed by committee. Would it were that U.S. biofuels policies were as lovely as a camel.

Richard T. Stuebi is a founding principal of NorTech Energy Enterprise, the advanced energy initiative at NorTech, where he is on loan from The Cleveland Foundation as its Fellow of Energy and Environmental Advancement. He is also a Managing Director in charge of cleantech investment activities at Early Stage Partners, a Cleveland-based venture capital firm.Content provided by and all rights reserved to CleantechBlog.com. Also check out http://www.cleantech.org

It's been a big week in Greenhouse Gas regulation land.  Huge boost for cleantech sales executives and afficianados everywhere.

EPA announces a slightly delayed and somewhat more limited GHG regulation rule.

Starting in July 2011, all facilities greater than 75,000 tons per year in emissions will have to get GHG permits.

And John Kerry and Joe Leiberman push ahead in the Senate with cap and trade and climate saving legislation.

Lots of good in here:

- Power sector gets capped early on
- Industrial/manufacturing gets phased in
- Transport included down the road as well
- Domestic offsets included (think massive cashflows to the ag belt)
- International offsets included
- International linkages included
- Phased in border tax for non participating countries

And then:

- Riddled with subsidies and wealth transfer and buy-offs, but isn't that just par for the course with Washington? 
- Price collar ($12-$25/ton) - guts the heart of compliance (market based mechanism to set a "real" carbon price, but the Senate should tell the market what the right price should be?  Joe? John? You do actually WANT emissions reductions, right?)
- And no Republican support - guts the odds of passage.

All in all a good week, even though the EPA will get sued six ways to Sunday and without Republican support Kerry-Leiberman has zero chance of passage, we'll give it a two thumbs up.  This is a drastic improvement.

Neal Dikeman is the editor of www.CleantechBlog.com, a partner at Jane Capital Partners LLC, and the Chairman of Carbonflow.Content provided by and all rights reserved to CleantechBlog.com. Also check out http://www.cleantech.org

U.S. DOT April 2010 Report to Congress

A wealth of potential solutions, from electric cars, to better transit, to reduced VMT, are detailed in the recent Department of Transportation’s report to Congress. Not only is the report rich with promising climate action, solutions are detailed to address U.S. energy security, with 97 percent of our transportation coming from one source – petroleum.

STRATEGIES TO REDUCE TRANSPORTATION GREENHOUSE GAS EMISSIONS

The DOT report offers a wealth of data and tactics supporting these four strategies:

1. Low-carbon fuels
2. Fuel economy
3. Transportation system efficiency
4. Reduce carbon-intensive travel

The report also details cross-cutting policies that facilitate the above strategies:
• Align transportation planning and investments to GHG reduction objectives
• Price carbon

Low-Carbon Fuels

The alternative fuels evaluated in this report include ethanol, biodiesel, natural gas, liquefied petroleum gas, synthetic fuels, hydrogen, and electricity. Considering scalability, the potential to follow a favorable cost reduction curve, and lifecycle emissions, electricity, hydrogen, and advanced biofuels have the most promise. Report summary:

If significant advances were to occur in battery technology and the use of low-carbon energy sources for electricity generation, battery-electric vehicle could reduce transportation GHG emissions by 80 percent or more per vehicle in the long term (25 years or more). Aggressive deployment could reduce total transportation emissions by 26-to-30 percent in 2050 if a 56 percent light-duty vehicle (LDV) market penetration could be achieved.

The estimates for plug-in hybrid and battery electric vehicles depend on reductions in the GHG emissions intensity of U.S. electricity production. The estimates were calculated using GHG emission intensity modeled by the Electric Power Research Institute (EPRI). The input is 379 to 606 g/kWhr in 2030, and 240 to 421 g/kWhr in 2050. This compares to a 618 g/kWh national average today and would require increased use of low carbon electricity production technologies such as wind, solar, nuclear, and hydro-electric power. However, even under a very high GHG intensity scenario relying on coal generation using older technology (1,014 g/kWhr), at a low battery efficiency of 0.4 kWhr/mile,
PHEVs operating in a charge depleting mode would still result in 12 percent lower GHG emissions than corresponding conventional gasoline vehicle operation, on a per mile basis. However, under these extreme circumstances, PHEV operation will not provide benefits relative to an HEV baseline.

In the long-term, if technical successes in fuel cell development and low-carbon hydrogen production, distribution, and onboard storage can be achieved, hydrogen fuel cell vehicles could reduce per vehicle GHG emissions by 80 percent or more. Aggressive deployment could reduce total transportation emissions by 18-to-22 percent in 2050.

Fuel Economy

Fuel use per light duty vehicle averages 578 gallons per year. In addition, average new vehicle fuel economy improved from 2005 to 2007 as the market share of passenger cars increased compared to light-duty trucks.

Vehicle and fuel efficiency strategies include developing and bringing to market advanced engine and transmission designs, lighter-weight materials, improved vehicle aerodynamics, and reduced rolling resistance. Many of these technological improvements (such as hybrid-electric powertrains, truck aerodynamic improvements, and more efficient gasoline engines) are well developed and could be further incorporated into new vehicles in the near future. In the long-term, propulsion systems relying on more efficient power conversion and low- or zero-carbon fuels.

Fuel economy benefits are limited by the turnover time of the fleet. Passenger cars and light trucks last about 16 years on average before retirement, compared to 20 years or more for trucks, up to 40 years for locomotives and marine vessels, and about 30 years for aircraft.

• Increased fuel economy in light-duty vehicles could reduce GHG emissions significantly. On a per vehicle basis, compared to a conventional vehicle, GHG reductions are 8-to-30 percent for advanced gasoline vehicles; about 16 percent for diesel vehicles; 26-to-54 percent for hybrid electrics; and 46-to-75 percent for plug-in hybrid electrics.

• Retrofits can be used to expedite improvements. Heavy-duty trucks retrofitted to use aerodynamic fairings, trailer side skirts, low-rolling resistance tires, aluminum wheels, and planar boat tails can reduce per truck GHG emissions by 10-to-15 percent. For new trucks, combined powertrain and resistance reduction technologies are estimated to reduce per vehicle emissions by 10 to 30 percent in 2030.

Reduce Carbon-Intensive Travel

These strategies would reduce on-road vehicle-miles traveled (VMT) by reducing the need for travel, increasing vehicle occupancies, and shifting travel to more energy-efficient options. The collective impact of these strategies on total U.S. transportation GHG emissions could range from 5-to-17 percent in 2030, or 6-to-21 percent in 2050.

• Transportation pricing strategies, such as a fee per vehicle-mile of travel (VMT) of about 5 cents per mile, an increase in the motor fuel tax of about $1.00 per gallon, or pay-as-you-drive insurance—if applied widely—could reduce transportation GHG emissions by 3 percent or more within 5-to- 10 years. Lower fee or tax levels would result in proportionately lower GHG reductions.

• Significant expansion of urban transit services, in conjunction with land use changes and pedestrian and bicycle improvements, could generate moderate reductions of 2 to 5 percent of transportation GHG by 2030. The benefits would grow over time as urban patterns evolve, increasing to 3-to-10 percent in 2050. These strategies can also increase mobility, lower household transportation costs, strengthen local economies, and provide health benefits.

Recent trends indicate that light duty vehicle emissions are leveling off as VMT growth slows and fuel economy improves. Growth in passenger vehicle VMT slowed from an annual rate of 2.6 percent from 1990 to 2004 to an average annual rate of 0.6 percent from 2004 to 2007. In 2008, VMT on all streets and roads in the United States decreased for the first time since 1980, likely due to a combination of high fuel prices and a weakening economy. Light-duty vehicles average 1.6 persons per vehicle.

Land use changes — such as density, diversity of land uses, neighborhood design, street connectivity, destination accessibility, distance to activity centers, and proximity to transit — reduce trip lengths and support travel by transit, walking, and bicycling.

Transportation and land use are interdependent. Decisions on the locations and densities of housing, retail, offices, and commercial properties impact travel patterns to these destinations. Similarly, the geographic placement of roads, public transportation, airports, and rail lines influences where homes and businesses are built. Areas of lower density tend to have higher levels of automobile use per capita.

Over the past several decades, housing densities have decreased and the amount of developed land in the country has grown faster than population. Land use strategies yields a reduction of U.S. transportation GHG emissions of 1 to 4 percent in 2030 and 3 to 8 percent in 2050.93 The Moving Cooler study assumptions, which fall in the middle of the range, rely on 43 to 90 percent of new urban development occurring in areas of roughly greater than five residential units per acre, which accommodates single family and multifamily homes.

TCRP Report 128: Effects of Transit-Oriented Development (TOD) on Housing, Parking, and Travel, surveyed 17 housing projects that combined compact land use with transit access and found that these projects averaged 44 percent fewer vehicle trips per weekday than that estimated by the Institute for Transportation Engineers (ITE) manual for a typical housing development.

Commuter/worksite trip reduction programs have modest potential for GHG reductions—0.2 to 0.6 percent of all transportation sector emissions in 2030. The most effective actions from a policy perspective are trip reduction requirements combined with supporting activities such as regional rideshare and vanpool programs and financial incentives for the use of alternative modes.

Investing in transit sufficiently enough to nearly double the average annual ridership growth rate from the current 2.4 percent to 4.6 percent and expanded urban transit could reduce GHG emissions from 0.2 to 0.9 percent of transportation GHG by 2030, or 0.4 to 1.5 percent in 2050.
Buses have the lowest emissions per PMT because of their high occupancy rateaveraging 21 people per bus. Transit buses have a lower occupancy rate of 10 people per bus averaged across the U.S. However, transit buses only account for 15 percent of all bus passenger-miles traveled. Intercity passenger rail averages about 20 passengers per car, while rail transit averages 23, and commuter rail averages 31.

Price Carbon

Mechanisms to price carbon emissions include:
• Federal motor fuels tax
• Cap and trade system, in which GHG emissions allowances are traded in the market to cap overall emissions
• Carbon tax

Transportation GHG emissions are 29 percent of total U.S. emissions. The report provides detailed data on sources of transportation greenhouse and air quality emissions. For GHG, the new GREET 1.8b model is used to measure emissions from source to wheels. Emissions from on-road vehicles accounted for 79 percent of transportation GHG emissions.

• Emissions from light-duty vehicles, which include passenger cars and light duty trucks (e.g., sport utility vehicles, pickup trucks, and minivans) accounted for 59 percent of emissions
• Emissions from freight trucks accounted for 19 percent
• Emissions from commercial aircraft (domestic and international) for 12 percent
• Emissions from all other modes accounted for 10 percent of total emissions

The United States is starting to reduce its total consumption of oil, become a bit more energy secure, and to implement promising strategies. By eliminating some of the biggest subsidies to oil and widening of highways, with some positive policy shifts, and with a modest carbon price, we could achieve significant reduction of oil use and reduce damaging emissions. Individuals, fleets, and regions have a wealth of options to use low-carbon fuels such as renewable energy, improve fuel economy including implementing electric cars, improve system efficiency, and reduce VMT.

DOT 600 Page Report PDF

Climate Action Scenario 26-Page for SF Bay AreaContent provided by and all rights reserved to CleantechBlog.com. Also check out http://www.cleantech.org

Why on earth would anyone care about new homes right now? Isn't that a dead market?

Yes, in the U.S. the new home construction market is down 75% from its 2005 bubble levels.  The industry is badly hurting and won't go back to bubble levels.  But that still represents around 400,000 new home starts per year.  This is still a huge market.

During the last decade the way to make money in U.S. home construction was obvious:  Just throw up some homes and let people buy them.  It was a seller's market.  But now in the "new normal" where existing home sales are down and new home sales are way down, this puts pressure on builders and developers to think more creatively as market power shifts more to the buyers who are going to discriminate not only on price, but on value.

Meanwhile, we are seeing the early signs of backlash against commuting in this country.  The decades-long trend of suburbanization and exurbinization appears to be somewhat reversing itself.  It took the downturn to reveal this, but available market data indicates that the biggest price and default hits have taken place in the exurbs, and urban and near suburbs have been the most insulated from such effects.  Basically, as the real estate market has gotten softer, overall people have preferred to take advantage of availability closer to the downtown areas to migrate inward (or at least abandon the further out properties).

As people expect energy prices to continue to rise, this trend will continue.  So-called "smart growth" and "urban infill" are going to become more widely-heard buzzwords.

But energy prices don't only hit on the commute, they hit on the home itself.  Homeowners are going to increasingly care about the energy usage of their home... and they're going to be caring about other attributes (eg: indoor air quality, overall use of "sustainable" materials, etc.) as well.

All of this is on the margin.  I mentioned that the new home construction market in 2009 was around 400k units -- compare that with around 5M overall existing home sales per year.  And 72M in total owner-occupied homes in the U.S.  Any analysis of green homes in the U.S. needs to account for the fact that change is hampered by the deep installed base of existing inefficient homes.

Nevertheless, I think we can expect to see some significant changes over the next ten years.  

On the existing homes side, as energy prices do indeed rise (or at least become more volatile), we will see new residential construction further emphasizing efficiency and dense growth.  Oil price future are indicating long-term price expectations above $80/barrel.  Natural gas price futures indicate expectations of price rises of at least 50% over the next couple of years (and this will also drive marginal electricity prices).  Potential homeowners -- and even renters -- will start caring more about the energy efficiency of their homes.  And not just because of the energy costs themselves, but because of that as an indicator of construction quality overall.

There's a limit to how much premium potential homeowners and renters will be willing to pay for energy efficiency, but bear in mind two other factors: 1) as "smart growth" drives shorter commutes, that will free up more wallet-space for home "green-ness"; and more importantly 2) green attributes will be increasingly important to the developers themselves as it will help accelerate necessary approvals.

It's this latter point that's often forgotten, but all real estate markets are incredibly local, and any developer will tell you that construction is actually relatively easy to manage -- it's siting and getting necessary approvals that are the huge determinant of their profits.  The time it takes to get a development started and the costs along the way.  And the fact that evidence suggests "green buildings" have lower vacancy rates than other buildings. So even in the absence of a "green premium," developers have strong incentives to adopt green building attributes.

Not to mention new laws in many places like California that are often requiring zero energy homes and other similar mandates by 2020.  I expect that such deadlines will get pushed back.  But they still are important market signals.

Meanwhile, in the existing homes market, energy efficiency can be retrofitted, with compelling paybacks.  In a low energy cost market this type of activity has lapsed, but it is clearly coming back strong.  Again, it's on the margins, but even if only 1% of homes got energy efficiency audits and basic retrofits (air sealing, insulation, etc.) it would make a huge difference overall -- and certainly would be rewarding for that 1%.  And new government incentive programs designed to encourage such efforts are only now starting to have an impact and will not go away quickly even if the programs are not re-upped.  

So what does this all mean?

Well first of all, we can expect significant activity in the green homes market.  But it won't be geared around "sustainability", it will be focused on location and energy efficiency.  "Sustainability" implies environmentally-sensitive materials (ie: bamboo, or certified wood) and above-standard environmental performance (ie: water re-use, etc.) that appeals to a certain small high-end niche of the market, but most homeowners won't be willing to pay for (because of long payback periods, if any paybacks are even applicable at all).  But many more homeowners will care about the energy efficiency of a home because of aforementioned cost and quality indications.  And, barring a long-term drift downward in gasoline prices, on the margins new homeowners will increasingly care about shorter commutes as well, driving increased interest in denser, closer-in neighborhoods.  Mid-range "green homes" are a relatively untapped niche, but with strong latent demand.

Therefore, developers who can address energy efficient new home construction in a cost-advantaged way will be rewarded.  And developers who can do this in a dense-housing format will be doubly rewarded.  This is a tiny part of the market now, but I wouldn't be surprised to see a quarter of new residential construction in the U.S. (mostly on the coasts, but also in places like Chicago and Dallas) qualify under such concepts by 2020.  This will create an entirely new industry in new home construction done to tighter tolerances, using new processes and designs to improve energy efficiency, and with intelligence and automation built into the home from Day 1.

But this will add up to only a small dent in the installed base of homes.  But we can also expect a significant chunk of existing homes to start to adopt such technologies as well.  It will be hard to retrofit core designs to be more energy efficient.  But air sealing and insulation is easy.  And HVAC will be increasingly intelligent, able to incorporate retrofitted, very small (and cheap) sensors to more efficiently meet required comfort levels.  Home automation will be flirted with, but really boils down to HVAC controls from an energy perspective, and it would make sense that it would eventually be integrated into central HVAC rather than be a standalone add-on application.

All of this will be only a "niche" even by 2020.  But with such a huge overall market, even as a niche it will be measured in the billions of dollars by then.  And it will be growing quickly.

 

by Richard T. Stuebi

The oil spill in the Gulf continues to astound. It's now reported that BP (NYSE: BP) has spent $350 million so far on clean-up, and that the total tab will run $2-14 billion.

Maybe BP can make up the billions in lost shareholder value via other dubious means: Bookmaker.com is running odds on whether the containment strategy being attempted will decrease or increase spill rates.

In this ecological disaster, a lot of dollars and not much sense is involved.

Richard T. Stuebi is a founding principal of NorTech Energy Enterprise, the advanced energy initiative at NorTech, where he is on loan from The Cleveland Foundation as its Fellow of Energy and Environmental Advancement. He is also a Managing Director in charge of cleantech investment activities at Early Stage Partners, a Cleveland-based venture capital firm.Content provided by and all rights reserved to CleantechBlog.com. Also check out http://www.cleantech.org

I am watching the Chris Matthews show. There was a comment about American's being nostalgic for their childhood when families stayed together and there were no global problems.
The problem with that point of view is that it is not true today, it may never have been true. We are in a situation now where the weak economy feeds this nostalgia. We have to move as fast as possible away from the solutions of the past which bind us to a weak economy. Coal, Oil, and Gas do not create jobs, they spend the savings on our balance sheet -- exploit our natural resources for short term gain. Do we need to continue to do this to tie us over, absolutely. But real job growth and wealth creation comes from innovation. Alternative energy, efficient cars, advanced agriculture, zero-energy buildings, next generation radar systems, and much more will create millions of jobs which reducing the impact on our planet -- borrowing from our balance sheet as necessary but not consuming from it like a drunken sailor.
I am optimistic about the future. We can do this, but we have to start with leaving our nostalgia behind.Content provided by and all rights reserved to CleantechBlog.com. Also check out http://www.cleantech.org

Barrons had an interesting take on biofuels from garbage: http://online.barrons.com/article/SB127327100968888619.html
I have been following this movement for some time and there does seem to be an extraordinary amount of capital and brainpower going into this space. People talk a lot about ethanol and I am a big of ethanol, mostly because I like the constiuency and channel to market it creates. More importantly, I am big fan of all of the other alternatives such as biofuels to garbage which has big proponents from Waste Management to others and Barrons claims that we might be able to get as much as 600,000 barrels a day of oil equivalent from this source. Not much compared to the almost 20,000,000 barrels a day that we use in the US alone.
Efficiency within existing ICE engines is another area we should focus on:http://www.fiafoundation.org/50by50/Pages/homepage.aspxMy friends at BP think that for an extra $4K per car you could reduce fuel usage by 50% within the next 4 years (typical auto planning cycle).
Electric Vehicles are a good choice as well:http://www.electrificationcoalition.org/For many applications, if you can put together the right financing you can achieve a lower cost per mile than diesel powered delivery vehicles today.
T Boone Pickens and others have talked about Natural Gas. With gas prices so low right now, there is some financial justification for this approach, particularly for heavy trucks -- where less incremental infrastructure is required.http://www.ngvc.org/pdfs/PotentialNGVs.pdfhttp://www.truckinginfo.com/news/news-detail.asp?news_id=70055
What the idea above show is that this will be a tough nut to crack, but on diversification arguments alone we should start the task of moving away from a largely oil based fuel future to one that diversifies away from oil.
Oh and it will be cheap and pay for itself in lower fuel and oil prices!
Jigar ShahCarbon War Room
Content provided by and all rights reserved to CleantechBlog.com. Also check out http://www.cleantech.org

Back in my consulting days, at one point I was part of a major project with a regional investor-owned utility, helping them do an overall strategic and operational review of the entire business.  It was a great learning experience to see what such utilities think about and have to deal with from the inside perspective.  One thing that always stuck with me was when we looked at revenue-growth opportunities for them.  The answer was that there was really little that the IOU could do to significantly grow revenues within their regulated gas and electric utility business, other than to generally work to promote economic growth in their region -- not a lot of top-line high-CAGR possibility there...

But things have changed.  Among other reasons, the past decade has seen the emergence of a new significant growth opportunity for such IOUs:  Plug-in vehicles.  By transitioning energy demand away from gas stations and into plugs in garages, utilities could boost their revenue growth significantly.

Right now what I'm mostly hearing about are the fears from T&D (transmission and distribution) engineers at utilities about such a prospect.  They argue that putting a car on the grid is tantamount to putting a new house on the grid.  And they worry that clusters of early adopters creating hotspots of demand that would create local distribution problems.

This is a natural part of the utility adoption cycle.  Utilities are paid to provide electricity, but since in the U.S. electricity is seen as a god-given right of every citizen, utilities are heavily incented to avoid disruption first and foremost.  And T&D engineers are the ones most tasked with keeping the lights on.  So whenever there's any new concept available for adoption by a utility, it usually gets pushed over to the T&D engineering group for evaluation.

These engineers are often very smart.  But they have no incentive to go out on a limb, their pension rests on their ability to keep the lights on, and in my work with the utility I found that financial considerations like revenue growth were something they could nod their heads at but never truly embrace.  So the first reaction from these T&D engineers is always to highlight the potential downside scenarios, no matter how minor.

This is where we're at with utilities and plug-in vehicles, here in 2010.  Really, utilities can't handle adding more pseudo-houses to the grid?  Isn't that what happens with a new subdivision development in any case?  And especially because recharging a commuter's plug-in vehicle can be managed to occur mostly during the off-peak hours in any case.  These are the concerns of someone who's paid to think up concerns.  And they will be addressed and will pass.

Because soon, CEOs of investor-owned utilities will realize that adding new pseudo-homes to the grid in the form of plug-in vehicles is a really good way to grow revenue in a regulated business where other growth opportunities are few and far between.

I think we'll start seeing this shift happen over the next couple of years as all the moderately-priced plug-in vehicles start to enter the marketplace.  Right now when the vehicles aren't available to consumers in any case, it's easy for the conversation to be dominated by downside scenarios.  But once consumers start adopting plug-in vehicles -- even in small amounts -- the upside potential will start to get the attention of utility CEOs.

As always, it takes a few years for such mindsets to change.  But by 2020 I believe we'll be seeing this in earnest. 

• Forward-thinking IOUs will be embracing plug-in vehicles and encouraging -- even providing incentives for -- their customers to purchase such vehicles.

• This shift will be most rapid in states where retail-level deregulation allows homeowners to determine their electricity provider. Incentives for plug-in vehicles will become another point of marketing differentiation for the various electricity retailers vying to grab customers.

• A couple of more advanced utilities will partner with a provider of recharging stations (maybe a startup like a Coulomb, but more likely over time it will be one of the larger, already-established T&D equipment vendors) to come up with a low-cost solution they can push on their customers that will also have very simple timing rules so as to make sure and push the recharging into off-peak hours.

• We'll see the emergence of startups vying to establish recharging stations at major corporate HQs and other major commuter destinations, where consumers can plug in their vehicle and swipe a card and the recharging station will be intelligent enough to have the charge show up on their residential electricity bill.  But most consumers will still do most of their charging at home -- so you'll be seeing these stations over at the far corner of the parking lot, not at every single space.  The alternative vision is that of battery swapping stations -- this may happen more rapidly overseas but I don't see it having much momentum in the United States quite yet.

• Utilities, who to date have largely taken a live-and-let-live approach to dealing with the oil giants when it comes to legislative efforts, will start to more heavily promote gasoline taxes and other disincentives for the consumption of imported oil.  As major IOUs like Duke Energy, et al, start to see their future growth being in part impeded by the presence of low gasoline prices, they'll start trying to adjust the playing field so that they can more effectively cannibalize that market.  This will mean further efforts to differentiate natural gas (which the utilities will be increasingly relying upon) from oil (which they'll be trying to steal market share from) in the overall regulatory scheme.

• Electric vehicles and PHEVs will see adoption happen more rapidly than pundits currently expect, toward the latter half of the decade, driven by all of the above dynamics.  More vehicle volumes will help drive down up-front costs, particularly in the battery packs.  And utilities will be helping to defray, either directly or indirectly, the upfront infrastructure costs of purchasing and installing recharging stations.

• Adoption will be slower in areas where the utility is a muni or otherwise not profit-incented, as the fears of grid disruption aren't trumped by desires for revenue growth.  And also because such utilities are often found in rural areas where commuter cars are less prevalent in any case.  But as the successful examples of IOU programs demonstrate the viability of integrating these kinds of systems into the grid, such utilities will slowly start to accommodate customers who want to go in this direction.

By 2020, I believe a significant minority of the new-sale U.S. commuter car market will be plug-in vehicle.  And investor-owned utilities will be leading the charge.

 

By John Addison (5/4/10)

National Tragedy in the Gulf of Mexico

Two hundred thousand gallons of oil spill daily into the Gulf of Mexico, destroying the beaches of Florida, Alabama, Mississippi, Louisiana, and Texas. News viewers witness oil explosions, fires, and destruction. Containment chemicals are dumped where fish were caught for our dinner tables. Billions of dollars of damage is done. Major ports of our nation’s commerce are threatened. We are again reminded of the damage that oil can do to our environment. United States Response to Deepwater Horizon Oil Spill.

Oil addiction also hurts our economy. In 2008, oil prices dipped to $32 per barrel. Now oil prices are over $80 per barrel, on the way to being triple the 2008 low. While oil companies argue that we are not running out of oil, they should be admitting that we can no longer find cheap oil. Instead, it is now billion-dollar deep-drilling ocean platforms, the highly destructive strip mining of Canada for tar sands, and unconventional sources with high greenhouse gas emissions that brings us our incremental oil that we convert into gasoline, diesel, jet fuel, and asphalt to widen roads for more cars.

And we continue sending trillions of dollars to parts of the world where people want to do us harm. With rising oil prices we are sending more money for less oil.

To the rescue, since 2005, Americans have used less oil by riding clean, riding together, and riding less. In 2005, we consumed 20,802,000 barrels per day; by 2008, 19,498,000 daily barrels (EIA Data). Consumption continues to drop.

Ten Solutions to Save at the Pump

1. Employer Commute and Flexwork Programs. Major employers are saving employees billions in travel costs. Employers sponsor ride sharing, last mile shuttles from transit, and guaranteed ride homes. Some employers have web sites and lunch-and-learns to help employees in the same zip codes match-up for car pooling. 57 million Americans work at home, at least part-time, with the help of flexwork programs. Employer programs have helped with reduced car ownership.
2. Public Transit. Americans made 11 billion trips on U.S. transit in 2008, a 50-year record. Use has dropped some due to transit operators being forced to cut some routes and remove buses as the recession drove down local sales tax revenues needed for public transit. Americans are eager for more and better transit.
3. Walk. On an average we take 4 car trips daily, compared to 2 in Europe. Sometimes 1 of those 4 trips can be a pleasant walk to market, neighbors, or school event.
4. Safe Routes. Thousands of communities across the nation are showing us how to safely walk to school, community centers, and to public transit. Route maps go on line, pot holes get fixed, sidewalks repaired, danger spots eliminated, and signs displayed. Walk to School Days are on the increase.
5. One Car Households. The average suburban U.S. household has two vehicles. Some more. The average urban U.S. household has one vehicle. More American families and roommates are going from three cars to two cars to one car.
6. Sharing the Gas Miser. Households with 2 or more vehicles increasingly share cars, putting the most miles on the fuel miser as the gas guzzler stays parked more often. My wife and I share the hybrid, when not using transit, and leave the other car parked 6 days per week.
7. Make your next Car a Fuel Miser. You now have a wide-range of car choices that get over 30 miles per gallon. There is no reason to settle for less when you buy or lease a fuel-efficient sedan, hatchback, even SUV, turbo diesel, CNG, or hybrid car. Top 10 Cars With Lowest Carbon Footprint
8. Order an Electric Car which is ideal for many who live in a city where 100-mile range is rarely an issue, and where transit, car sharing, and car rental are also available. The average U.S. suburban household has two vehicles, so the EV could be ideal as one of those two. Top 10 Electric Car Makers
9. Car Sharing. In 600 global cities, cars can be used by the hour. Car sharing is popular with individuals and fleets. At many university and colleges, students with good grades can participate at age 18. Add transit and bicycling and many students live car free.
10. Smart Apps for Smart Travel. Internet savvy people now use Google Maps, 511, car share apps, and smart phone GPS apps to compare car directions and time with public transit directions and time. With a few clicks on a social network a shared ride is arranged, or a shared car reserved. In the old millennium we got everywhere by solo driving in gridlock. In the new millennium we plan and use a mix of car driving, transit, and other modes to save time and money.There are hundreds of ways to save at the pump, or avoid it all together. The above are a just a few as people shift from their only choice being driving a gas guzzler, to options that include ride sharing, car sharing, walking, bicycling, buses, and rail for some of their trips.

Waiting for Responsible Government

We can all make a big difference without waiting for responsible government action, but it would help. The cheapest way to end highway gridlock is to invest in public transportation. Instead government cuts funds for transit and spends billions widening highways. For oil companies, we allow them to drill off our invaluable shores, fight wars to protect their oil, and then put oil companies on welfare. As Forbes Magazine discussed on April 5, the most profitable company in the United States, Exxon, paid zero U.S. income tax in 2009.

At a time when the average U.S. tax payer is hurting, we need to end oil tax loopholes and ensure that the 4 million vehicles in government fleets are gas misers or electric. While a minority in Congress block all attempts at progress, local communities are taking action across the nation by making cities vibrant, with work, services, and play close at hand. Portland, Oregon, is a role model in creating urban density and great public transportation. California with SB375 is requiring regional plans that integrate development, transportation, and greenhouse gas reduction.

In the United States, we embarrassingly have more vehicles than people with driver’s licenses. We have 246 million vehicles. AAA estimates that it costs $8,000 per year for each car owned, which creates a financial burden on cash-strapped Americans. You can help your pocketbook and help the nation by riding clean, riding together, and riding less.

John Addison is author of Save Gas, Save the Planet and Publisher of the Clean Fleet Report. (c) Copyright John Addison. Permission to repost up to a 200 word summary if a link is included to the original article at Clean Fleet Report. Content provided by and all rights reserved to CleantechBlog.com. Also check out http://www.cleantech.org

by Richard T. Stuebi


In the past month, we've witnessed two major catastrophes associated with U.S. production of fossil fuels -- the BP Deepwater Horizon oil rig explosion killing 11 workers in the Gulf of Mexico, and the Massey Upper Big Branch coal mine explosion claiming 29 lives in West Virginia.


It's easy to vilify energy companies like BP (NYSE: BP) and Massey (NYSE: MEE) for being reckless at these operations. No doubt, there will be lots of investigation in the months to come, and tighter regulations and legal action in the years to come. Scrutiny is definitely deserved, new requirements may be forthcoming, and severe punishments may well be in the offing.


Rather than focus on the obvious human cost of these tragedies, and the truly frightening ecological disaster currently unfolding in the Gulf of Mexico, I choose to comment herein on the profound implications of our long-followed energy policy, which I term as "cheap energy at any price".


For the most part, our problems do not lie with fossil fuel producers. Certainly, they must be held to meet safety and environmental standards -- and in these two cases, these standards do not appear to have been met. But that does not mean that all oil and coal companies are led by evil people, and that their employees are complicit conspirators in misdeeds against humanity and the planet.


No, it's far too easy to take that oversimplistic but misguided position.

Pretty much every reader of this post will willingly use fossil fuels today -- in the coal burned to generate the electricity to power your computer, in the petroleum burned to move you to your place of work.


Let's not forget that fossil fuels have been an instrumental factor in the huge leaps in quality of life over the past 100 years. It is this utter reliance by all of us on these fossil fuels that compels companies and people to supply these fuels. And, of course, to try to make a profit in doing so. After all, that is the American way.


These two disasters are the exception, not the rule. More fundamentally, the problem is not on the supply side, but on the demand side.


Fossil fuel companies are not the bad guys -- they supply a product that will remain vital for years to come.

We have met the enemy, and it is us.


It is time for us to dedicate ourselves to putting virtually all of our incremental attention, money and efforts towards an energy system not nearly so dependent upon fossil fuels. And, we need to accept imposing such a discipline upon ourselves -- for instance, by being willing to establish stronger price signals in the energy markets to drive our society in that direction.

In other words, we must stop the "cheap energy at all costs" mentality that has pervaded our thinking for decades.


As Albert Einstein once noted, "Insanity is doing the same thing over and over again and expecting different results." In the case of energy, if we keep putting all of our eggs in the fossil fuel basket, all we can expect are more human and ecological tragedies.


Only a few of these tragedies will be very visible and instantaneous as in these two explosions. The worse tragedies are long-term and hidden: climate change, depletion of finite and irreplaceable resources, continued reliance on supplies from objectionable sources, and increasing geopolitical conflict leading to resource wars.


Think about the deceased of the Deepwater Horizon and Upper Big Branch, working on an offshore oil rig or underground in a coal mine. Are these the jobs we want to see for the 22nd Century? Did these people want their children to be earning a wage in the same way they were?

The best way to honor the dead would be by taking these recent tragedies to increase our resolve to move us from the fossil fuel past to a new and better future that need not rely so desperately on fossil fuels.


It won't be easy, quick or cheap to create a new energy system, but we need to start working much harder to sever the link between fossil fuels and human life. Because escalating reliance on fossil fuels can only be harmful to our long-term social and planetary health.



Richard T. Stuebi is a founding principal of NorTech Energy Enterprise, the advanced energy initiative at NorTech, where he is on loan from The Cleveland Foundation as its Fellow of Energy and Environmental Advancement. He is also a Managing Director in charge of cleantech investment activities at Early Stage Partners, a Cleveland-based venture capital firm.Content provided by and all rights reserved to CleantechBlog.com. Also check out http://www.cleantech.org

Pretty timely re: my last post on water, this afternoon they declared a major water emergency in the Boston area, thanks to a huge water main break.  One million people, including everyone in my town, are under a "boil water" order.  I got a call from my local water district, a recorded message telling everyone not to use any water at all, not even lawn sprinklers, until they have it fixed.  Since the water main break is dumping 8 million gallons of water per hour into the Charles River, doesn't sound like it'll be fixed very soon.

I make sure and keep backup water supplies at the house just for such eventualities, but I was curious, so about an hour after the emergency was declared I went over to the nearest grocery store, one of those that's so large you can get lost.  And almost their entire supply of water was already gone.  Empty shelves, almost everything grabbed, and people were milling around the aisle in front of the empty shelves looking around as if more water was going to be found.  No panic or anything, people were nice enough, but wow nonetheless...

The phone message said something about the emergency taking only a "couple of hours", and people can boil water to drink, and yet this was still the immediate reaction.  Can't imagine what would happen if something actually serious were to happen to the water supply.

Yep, water's "free".