…Or your own lying eyes?

PR has its limits. You can only create so much belief in the face of a persistent, contradictory reality.

As the shale frenzy has bubbled along, stories about a United States and/or North American resurgence in oil production have been pushed in major media outlets from the Wall Street Journal to the New York Times and all manner of blogs in between. At the same time, domestic prices at the pump remain stubbornly aloft.

Since economic “law” dictates that ample supply should result in lower prices rather than the upward trend we’re experiencing, there must be other factors at play, right? Anxiety over threats of war with Iran, commodity speculators, Big Government rules that hamstring drilling and the insatiable greed of Big Oil are all trotted out as the proximate cause of this seeming paradox. But for these transient, man-made issues, the storyline goes, we’d be swiftly on our way to Newt Gingrinch’s $2.50-or-less-a-gallon Promised Land. We are, after all, sitting on trillions of barrels of technically recoverable oil and 100 years of natural gas, right?

Those seeking the true contours of the energy landscape we’re traversing would do well to remember that good answers start with good questions. So, take a look around and ask yourself a few. If we are actually awash in oil:

  • Why are major airlines conducting flight tests of planes with biofuels?

The actions by the organizations cited above are not inconsequential. They represent major commitments of money and effort, and, in the case of the auto companies, a major directional shift for their businesses. If energy independence and a gushing supply of oil were just a few more horizontally drilled and fracked wells away, would these entities really be pursuing strategies that hedged their futures increasingly away from reliance on petroleum?

So, who are you going to believe; the hyped assurances of investment banks and oil companies, or your own lying eyes?

Government picks winners, goes sailing

The United States Navy has grand green ambitions. It aims to replace fossil fuels with renewable biofuels in 50 percent of its missions by 2020. In pursuit of that goal, the Navy is planning what is commonly called a demonstration exercise (some might call it a dry run, but the ocean is really wet, so that would probably sound odd) next summer off of Hawaii.

To create a 50-50 mix with fossil fuel for that mission’s planes and ships, the Navy recently placed an order for 450,000 gallons of biofuel with a company called Dynamic Fuels. That company is actually a joint venture between two publicly traded companies – the agribusiness behemoth Tyson Foods and a smaller outfit called Syntroleum Corporation that has specialized in gas to liquids and coal to liquids technologies.

The Dynamic Fuels site says they have a proprietary process in use at a plant, “near Baton Rouge, utilizing its technology to turn animal byproducts such as beef tallow and pork and chicken fat into renewable diesel.” That plant, the site says, may one day be capable of churning out some 75 million gallons of biofuel per year. (Fun fact, the United States uses somewhere in the neighborhood of 140 billion gallons of gasoline per year and about 60 billion gallon of diesel a year.)

So, chicken fat ahoy? No, the Navy order is too big for that. Dynamic Fuels will instead be processing algae-based oil supplied by another company, Solazyme, that the Navy has also bought from – in smaller quantities – in the recent past.

The Navy will pay Dynamic Fuels about $26.60 a gallon for the biodiesel; many times higher than the cost the Navy typically pays for traditional diesel. Some quick math tells us the final order will come to about $12 million. Seems kinda pricey, but according to this story, just last year the Navy paid $242 per gallon for a much smaller biofuel order. So, that’s progress, right?

Yes, yes it is. And progress often comes at a price above the going market rate. So thank goodness the Navy understands the threat that reliance on a finite vital resource represents to its way of life (and/or death) and is willing to pay those higher prices as an investment in companies that demonstrate they might have a promising solution.

A greener alternative to ethanol? I’ll drink to that!

Following up on my co-generation/symbiosis post from earlier this summer, I came across a great example of this principle in action the other day. This story explains how scientists at Edinburgh Napier University in Scotland have developed a way to turn two byproducts of whiskey production into a more-than-viable alternative to corn ethanol. Treading on stereotypes for a moment, I have to say this sort of discovery would seem destined to have been made by a Scottish or Irish scientist.

The article explains that the biofuel made from the byproducts, butanol, packs 30 percent more energy per unit than does ethanol, can be easily blended into gasoline at refineries, requires no modification to engines that use the blended fuel and does not pick up water, making it far easier to handle and use than the hydrophilic ethanol. This is all terrific, and from a symbiosis standpoint, the really good news is that it’s derived from a waste product created by a useful, needed, everyday manufacturing activity.

Truth be told, this isn’t the first time I’ve come across this sort of useful byproduct in distilling. CNET’s Martin LaMonica covered a story last year wherein Sierra Nevada Brewing entered into a partnership to turn its beer making leftovers into a feedstock for a home ethanol start-up. Out on the road, distilling byproducts are already helping save money while improving safety. Read all the way to the bottom of this Wall Street Journal article from 2009 and you’ll see that leftovers from the rum-making process are an effective supplement to road salt.

So while drinking and driving don’t mix, distilling and driving may be a rather different story.

Are we there yet? Time for energy efficiency to get its sexy on

How soon before we hit peak oil production? According to the U.S. military, it might be two years from now, or even less. If true, we’re well on our way to the real Energy Crisis. And the key to riding it out just might be efficiency technologies like that itchy pink insulation in your attic.

Peak oil is the point when the world’s oil production reaches its highest rate and begins its inevitable decline, creating an oil deficit relative to demand.

That will happen globally in 2012 with “severe” shortfalls on world markets by 2015, according to a report issued by the United States Joint Forces Command. The UK’s Guardian newspaper covered it. Peak oil in the U.S. has already passed. It was 1970 for the lower 48 states.

So we just fill the gap with all kinds of renewable energy projects, right? Wrong.

It will take decades to spool up replacement technologies and attendant infrastructure. See, oil is a very energy dense and convenient source of power. Battery technology is a long way from matching oil’s energy density, and it has its own “peak” problems (lithium doesn’t exactly grown on trees). It will also need a materials-intensive charging infrastructure program to even begin propelling the millions of passenger cars currently on the road. Bio-fuels? Also not as energy-dense as petroleum, meaning you’d have to produce a hell of a lot more of it to replace a lesser volume of petroleum. Also, bio-fuels have a raft of production scaling issues that are, again, many years away from being addressed (let’s talk dry materials storage and handling!). Oh, and ethanol tends to pick up water easily and is fairly corrosive, so the existing gasoline pipeline transportation infrastructure isn’t well-suited to handling it.

Without a couple decades to work through these problems, we’d be better off focusing not on producing replacement fuels, but increasing efficiency – making the most of what’s at hand.

For instance, let’s tighten up our buildings. Buildings account for almost 50 percent of energy consumption in the U.S. (and a proportionate share of carbon emissions), according to the EIA. As we gin up those turbines, let’s be retrofitting the building sector – utilizing everything from smart glass like SAGE to advanced insulation materials and onsite combined heat units. And build this stuff into new construction.

Dare I suggest telecommuting? We’ve spent decades building a robust, intercontinental Internet. Surely it can handle remote workers, ecommerce and funny cat clips on YouTube.

Efficiency measures like these are in our collective DNA. A market-based economy is supposed to excel at efficiency and we’re generally good at it when we make the effort. Unfortunately, the easy availability of cheap energy has limited its appeal to date. Why insulate if heating oil is cheaper than Pepsi?

Back in December of 2009, President Obama unveiled a program of incentives to drive efficiency behaviors – and jobs – which subsequently became known as “cash for caulkers.” This passage from the linked article is telling:   “I know the idea may not be very glamorous, although I get really excited about it,” Obama chuckled as he described the discussion at a roundtable on job creation he took part in just before his remarks. “Insulation is sexy stuff.”

I agree, but for most folks, we’ll need to sex it up a bit, as the Brits say. There’s an image problem with energy efficiency. Ever since President Carter put on a sweater and went on national television in February of 1977 to say that we’d have to turn down the thermostat to build a better future, the concept of efficiency has been firmly wedded to that of sacrifice, rather than something sexier, like, say progress. Efficiency is a topic ripe for an extreme makeover.

So how, exactly, do we make energy efficiency sexy? More about that in my next post.

Strategies for effective green retailing

Plus lessons from Coca-Cola, Dell and Timberland

Retailers go green for two reasons. One, consumers favor products they believe are green. Two, it’s the right thing to do.

One in three American consumers are more likely to choose environmentally responsible products, and 70 percent of Americans are paying attention to what companies are doing about the environment, according to an Opinion Research poll. Across the water, two out of three UK adults say environmental concerns influence their purchasing decisions.

Does the time and expense of green retailing to these consumers pay off? The jury is still out on that one, so the smart retailer at least considers going green. Fortunately, good green retail marketing is by definition good for the planet. It’s not greenwashing. To be effective, green retailing actions must be able to withstand reasonable scrutiny. They’re changes that matter, in ways however small, to the planet and your business.

Step one: the inventory
If you want to go green, the first thing to do is conduct a thoughtful inventory of how your business affects the environment. Consider both the obvious and less obvious impacts. Let’s say you sell cars. Obvious impacts include the gas they burn, the emissions they spew and the pile of tangled metal that eventually goes to the landfill. The less obvious effects include the production of electricity to illuminate your lot; the trees that die for your paperwork; and the impact of trucking new cars to your showroom. Less obvious still are the natural resources that go into the vehicles’ parts, the energy produced in refining those materials, and all the subsequent consequences of manufacturing.

With this inventory, you learn pretty quickly the infinite breadth of your environmental footprint. The good news is you don’t have to fix everything at once. The inventory simply introduces you to accountability and defines the scope of areas where you can become more sustainable. (This step also tells you how critics might attack you should you be so foolish as to make overly aggressive green claims.)

With your environmental impact inventory complete, here are some options for going green and some examples of companies that employ them:

Green your product
Any product can be greened up. Downsize the vehicles you sell, for example, and make room for some hybrids. Or use greener materials. Payless Shoes now offers a full line of eco-friendly footwear, purses and accessories that use natural fibers like organic cotton, hemp, jute (plant), recycled rubber and plastic, water-based glue and (for packaging) 100-percent recycled boxes printed by soy-based ink. No metal or pesticides in the sourcing chain and no excess raw material extraction. (Sorry, ladies, no pumps either, but you can still get some elevation, see right.) The marketing benefits are immediately clear: Why else would this post mention Payless? How else would Payless have caught our eye on Reuters?

Green your most visible operations
Whole Foods Market banned the use of plastic grocery bags at its 280-plus stores starting on Earth Day 2008. In the ensuing year, it says it has kept an estimated 150 million plastic bags out of landfills. The campaign helped energize customers to triple their use of reusable bags – themselves made of recycled materials. The company also sells a special reusable bag for $29.99, each sale of which feeds 100 kids in Rwanda. That’s good marketing, and it’s hard to be cynical about feeding the hungry.

Green the building
Timberland opened a “carbon neutral” store in New York City last week with reclaimed wood, salvaged brick, efficient lighting and non-VOC paint. These green features hit the consumer between the eyes. Although less visceral, Timberland’s LEED certifications for its mall stores are also important for green credibility.

Green your energy consumption
Dell, for example, announced last week it gets 26 percent of its global electricity needs from renewable energy sources, up from 20 percent in 2008, and powers nine of its facilities with 100 percent renewable energy. Twenty-six percent doesn’t sound like a whole lot, but the company wisely uses credible third parties to compare itself favorably with competitors in technology and in big business. Dell also uses another tactic…

Buy renewable energy certificates
Renewable energy certificates, or RECs, are commodities that an organization can purchase from a renewable energy producer (solar, wind, biofuels) to conceptually offset the harm the first company’s power sources are causing. Purchasing a REC subsidizes renewable energy production and effectively increases the cost of emitting carbon. It’s of limited green retailing value except in bolstering a claim of progress toward carbon neutrality.

All of these measures can be effective, but they have the potential of doing more harm than good. Few media stories are more withering than a point-by-point analysis (of how a company took its green claims a little too far. So just be careful what you say and how you say it:

  • Modesty is always nice, lest you provoke observers to note all the ways you are not yet green.
  • Align green retail actions with your product. The auto industry needed greening, so Toyota greened an auto, the Prius. Coca-Cola, a beverage company, is vowing to replenish the supply of the world’s most popular beverage: water. Alignment resonates. If your building is LEEDS certified but your product pollutes, your overall message is weak.
  • Try to be correct. The Treehugger blog skewered an Italian architect for a stunning creation billed as the “first zero CO2 office building in Milan.” Among other things, the building is elevated on 13-meter pyramid-like “stilts,” effectively driving occupants onto elevators just to get inside. On a roll, the blog even complained about the carbon footprint of manufacturing photovoltaic panels for the roof.
  • Prepare for surprises. As BusinessWeek.com reported, Coca-Cola until recently assumed that most of its emissions came from manufacturing or its trucks. It discovered the lion’s share came from cold drink equipment – the coolers, vending machines and fountain dispensers. This gear includes potentially damaging refrigerants and insulation and consumes a lot of electricity. This unexpected source accounted for about 15 million metric tons of emission every year – almost twice that of the trucks and manufacturing combined.

These examples should give you some direction in planning your next step in green retailing. Remember, if it’s good for the planet, it’s good for business. Because it’s hard to profit without a planet.

Biofuel needs a new message

Biofuel startups have a messaging problem. Everyone from scientists and environmentalists to economists and ethicists are hammering the industry in a near-daily barrage of bad press and damning research studies.

I won’t spill the entire rap sheet against biofuels – you can read about them here or here for starters – but to summarize the key points affecting public perception:

  • “sustainable biofuel” is an oxymoron: it takes far more fuel and energy to produce than it delivers
  •  production actually causes more greenhouse gas emissions than it eliminates
  •  it takes farmland away from food crops, increasing prices and world hunger, and
  •  it contributes to rainforest deforestation, to name just a few offenses.

These problems are primarily the domain of first-generation biofuels produced from food stock like corn, soybeans or palm oil. Whether its indictments are fair or not, the perception taints the entire industry, including more promising second-generation alternatives such as cellulosic ethanol (which relies on non-food biomass like agricultural waste products and wood chips) and algae-based biofuels.

Yet the industry’s only response is the same old message it’s been touting since day one: Biofuel helps reduce our dependence on foreign oil.

Important as energy independence may be, the message is ineffective. It’s a macroeconomic abstraction at a time when people are struggling with tougher problems closer to home… like having a job, healthcare and a place to live. It doesn’t give me a good reason to care. Besides, don’t solar, wind and other more clean energy industries have a more attractive hold on that same message? And for transportation fuels, electric and hybrid plug-in vehicles rule the day.

Weak messaging combined with the steady drumbeat of detractors has caused the biofuel industry to lose control of the debate…at their own peril. I don’t have the answer to biofuel’s messaging problem. But if asked, I’d steer the discussion this way:

Doing nothing is not an option – First, re-assert biofuel’s essential role in renewable energy diversity. The messaging needs to convey that while it may not be a perfect fuel; it’s certainly a better fuel. Detractors may fling their arrows, but what’s the alternative? Our oil addition may ebb as new green technologies catch hold, but it won’t go away in our generation. Do we just keep pumping and mainlining dirtier fossil fuels into our cars, homes and industries indefinitely? The messaging needs to communicate that doing nothing is not an option. No single renewable energy option can solve all our problems. Biofuel is a necessary part of our clean energy stew.

Make it personal, keep it local – The biofuel industry needs to get beyond its national energy independence message and explain how a well structured biofuel ecosystem can benefit local economies and, ultimately, people’s lives by:

  • creating jobs in feed stock, production and distribution, and
  • reducing the negative impact on local environments.

In our state of New Hampshire, for instance, the North Country’s economy is reeling from the collapse of the pulp and paper industry. Biomass production from waste wood would not only bring jobs and spur new ancillary businesses, it would lead to better forest management, which boosts tourism. Companies like Pacific Biodiesel and organizations like the Sustainable Biodiesel Alliance promote small scale, community-based biofuel production based on local feedstocks, local production and local distribution of sustainable fuel. In other words, “grow it here, produce it here, use it here.” The messaging needs to communicate how biofuel can positively impact me and everyone else at a personal level.

Rebrand – Lastly, biofuel startups need to directly address the early missteps and knocks against the industry openly and honestly. Acknowledge the problems and show what you’re doing to fix them. Continued support for current first-generation corn-based ethanol production is a non-starter. It’s an unsustainable industry propped up by bad public policy and pols beholding to the agri-biz lobby and Iowa caucus goers. It’s a battle that can’t be won in the long term.

This requires re-branding. Second-generation biofuel companies need to set themselves apart from their first-generation legacy with branding that communicates how they are different…how they are better. The branding should communicate the industry’s future vision. Today, biofuel startups attempt to differentiate based on their intellectual property and production methods. But who really cares which bacteria or enzymes are best for digesting cellulosic biomass, or which algae strains yield the most oil? Most of us don’t. We have faith you’ll figure out the science. Just show us the way forward.

The growing attacks on biofuel could have the negative effect of stymieing national and global biofuel policies at a time when breakthroughs in sustainable biofuel production are nearing commercial reality. The biofuel industry needs to reclaim the megaphone and deliver a clear, crisp message that communicates its benefits in a personal way.

eBay might be kinda sorta green

eBay is going public about going green (surprise), announcing a Green Team “committed to doing even more to help the world buy, sell and think green every day.” But will the green tint stick?

Well, they’ve got a huge solar power installation. Their business happens to promote reuse, which is better than recycling. They pay for cradle-to-cradle packaging and carbon credits. And who’s to say their heart isn’t in the right place? But beyond that…?

Well, there are plenty of newly manufactured consumer items for sale on their site. A lot of small parcels zooming all around the world 24 x 7 (some $2,000 in goods per second, in fact) doesn’t do much in the way of reducing fossil fuel consumption. And, as the New York Times points out, the ad campaign will be on virgin paper. Ouch! The article proves yet again that even modest pretensions to green goodness are subject to scrutiny.

Credit eBay for doing some good work. But from a marketing perspective, it’s hard to own the green leadership mantle when, by all appearances, your carbon footprint is about the same as everyone else’s.