Archive for June, 2010

As posted to CleanTechBlog.com

A few weeks ago, the American Energy Innovation Council released a report calling for a bipartisan commitment to increased governmental involvement in encouraging more research to spawn the new energy industry of the future.

The five key recommendations of the report are:

• Create an independent body to propose a national energy strategy
• Triple federal spending on energy research to $16 billion per year
• Create centers of excellence in energy research
• Fund ARPA-E at $1 billion per year
• Establish a New Energy Challenge Program to drive pilot project deployment

Members of the Council represent a who’s who of American business leadership, and they met with President Obama on the report’s release. Quotes from press coverage after the meeting were revealingly strong:

Jeff Immelt, CEO of General Electric: “We have a policy today. Our policy is uncertainty…I’d say status quo for this country is a losing hand.”

Ursula Burns, CEO and chairwoman of Xerox: “The incident in the Gulf just kind of intensified this discussion – that we have a fragile, brittle system.”

But it is the presence and statements of Bill Gates, the legendary founder and chairman of Microsoft, that are telling. Until now, Gates has been largely silent on energy and environmental matters. However, as you can see in a posted video, Gates is beginning to speak up on these issues.

Gates said in a news conference after the meeting with Obama that he and his fellow business leaders hoped “that any energy bill, particularly that’s raising revenue, should be heavily influenced by the Council’s report” to put more revenue into energy research.

To the humanitarian Gates, the world’s poor are “going to be the ones, when there are climate change effects, who suffer by far the most. And they need cheap energy. That’s actually something that unites the rich and poor.”

Note that Gates didn’t waffle by saying “if” about climate change. It’s a matter of when and where climate change will start biting.

Of course, the technoscenti don’t view Gates with the same esteem as, for instance, a Steve Jobs of Apple. While not as exalted as Jobs, as the second wealthiest person in the world (who pals around with the world’s third-wealthiest person, Warren Buffett), Gates ought to have a lot more impact with those who control the really big dollars, not just public but private and philanthropic.

So when someone like Gates starts making noises that our current approach to energy and environmental issues is untenable, perhaps it’s a sign of bigger changes afoot in the cleantech realm.

As posted to CleanTechBlog.com

One of the more promising stories to emerge from Cleveland in recent years is the formation of the Evergreen Cooperatives, a holding company to fund start-up companies that:

• Employ disadvantaged citizens from some of the most poverty-stricken neighborhoods in Cleveland
• Are founded on the principle of worker-owned cooperatives, enabling employees to participate in the wealth creation of the business
• Serve the needs of the local community, anchored by the market requirements of major enduring institutions such as the Cleveland Clinic, University Hospitals, and Case Western Reserve University
• Provide a product/service that is truly sustainable and consistent with the green economy of the future

Since Evergreen was formed and seed-funded in late 2009, the first three businesses launched have been the Evergreen Cooperative Laundry, Ohio Cooperative Solar, and GreenCity Growers Cooperative. With just a few months of operation, these green economy enterprises are now employing dozens of Clevelanders who otherwise would be challenged to find meaningful employment opportunities, affording true career tracks and wealth creation (as opposed to merely a meager wage).

Admittedly still in its early days, the long-term impact of Evergreen will only be known and felt years from now. But the prospects are promising. In the late 1950’s, the Mondragon region of Spain suffered from many of the same economic travails now besetting Cleveland, but the formation of the Mondragon Corporation (a similar network of cooperative businesses) has led to an economic powerhouse of more than 100 firms employing 120,000 people and annual revenues of more than $20 billion.

The world is taking notice of this social experiment: So far in 2010, Evergreen has been reported on in The Economist (subscribers only) and BusinessWeek, but perhaps the most thorough story on the is found in “The Cleveland Model,” an article appearing in a recent issue of The Nation. I urge you to read this article to learn more about a truly positive glimmer of hope in the revitalization of the industrial Midwest of the United States – and in the mainstreaming of cleantech throughout the American economy all the way into its inner cities.

There are too many heroes underlying the birth of Evergreen to list in one place, and I’m sure I don’t know them all, but I cannot complete this posting without special tips of the hat to: Lillian Kuri and India Pierce Lee of the Cleveland Foundation, Ted Howard of the Democracy Collaborative, Stephen Kiel of Ohio Cooperative Solar, Mary Ann Stropki of ShoreBank Enterprise, and the late and deeply missed John Logue of the Ohio Employee Ownership Center at Kent State University.

as posted to CleanTechBlog.com

I get a kick out of trite little lists that I can quickly report on and provoke some thinking and conversation.

And so it is that I recently came across the “Top Ten Energy Myths”, as suggested by Thomas Tanton, a fellow at the Pacific Research Institute.

As listed in the table of contents, the ten myths are:

1. Most of our energy comes from oil.
2. Most of our oil comes from the Middle East.
3. We have no choice but to import vast quantities of oil.
4. Offshore oil production imposes environmental risks.
5. Reducing our peroleum (sic) use through alternative energies like solar and wind will increase U.S. energy security
6. Energy companies will not invest in clean reliable energy.
7. Renewable energies will soon replace most conventional energy sources.
8. The U.S. consumes large amounts of energy and thus emits a disproportionate amount of the world’s greenhouse gases.
9. Federal mandates for higher-mileage cars means less energy consumption
10. Forcing drivers to use alternative fuels will help solve global warming.

As Taunton notes in the introduction, Mark Twain is attributed to have said that “it ain’t what you don’t know that gets you into trouble; it’s what you know that just ain’t so.”

And so it is: some facts are myths. But, then again, some facts are factual too, and some claimed facts are myths. For instance, at the conclusion of a brief commentary on these top 10 myths in the February issue of Power, Taunton presents as “fact” that “increased oil production can have green results,” with the supporting claim that “new drilling technology, developed by private energy companies, has greatly reduced the risk of oil spills.”

Uhhhh…..

I guess the moral of the story here is that readers have to be pretty discerning when considering the writings of thought-shapers, to not accept commentary as absolute, definitive and permanently correct, but rather to look between the lines in identifying biases and competencies that underlie their arguments.  And, if a writer is neither competent to discuss the topic, nor unconflicted in discussing the topic, readers are well-advised to not put a lot of trust in the writer’s opinions.
�

As posted to CleanTechBlog.com

On behalf of Cleveland Foundation President Ronn Richard, I was privileged recently to attend an all-day bull session on energy innovation hosted by the White House. 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 uncover actions that can dramatically increase the velocity and success of energy innovation.

Alas, I can’t say 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: “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 policymakers to set better policies.”

Desh Deshpande, serial entrepreneur, including chairman of A123 Systems: “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 spinouts 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: local relevance, speed, connectivity both within the university and to the outside, entrepreneurship, and 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 and 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 five years, 86 percent of foreign graduate students at MIT indicated a desire to stay in the U.S., but only 56 percent have stayed. And the 44 percent 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?