Neff Zone Column -- February 21, 2009

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Print Edition: February 21, 2009

I TOLD YOU SO

I'm happy to gloat and say "I told you so!" When the price of oil was skyrocketing and all the news was doom and gloom I told you about a Saudi oil minister from the 1950s who had told OPEC something like this: 'The balancing act for OPEC is to keep the price of oil low enough so the Americans will stay hooked but also high enough so we can make maximum profits. If we make a miscalculation and price our oil too high, make no mistake about it, we will push the Americans too far and they will develop other fuels. At that point it's game over.'

Well folks, that day has come. I know, I know...right now the price of oil is $35 a barrel and Americans are shunning fuel efficient cars in favor of trucks again, but deep down we all realize that oil is not the answer to future energy needs. The alternative ideas are flowing (please pardon the pun). Ten years from now we'll all be wondering how we could have been so delusional as to think oil was the be all and end all.

The ideas are coming fast and furious and I don't know which ones will turn out to be viable and which will prove to be unworkable. The point is, however, that there are ideas. Universities, engineers, research labs and entrepreneurs are cranking them out. When you look at all the possibilities it's exciting. Remember, buying foreign oil creates zero American jobs but producing American-made alternative fuels creates hundreds of thousands of domestic jobs.

For example, the airlines and the U.S. Air Force are "this close" to solving their jet fuel woes with the goal of replacing a significant portion of the 19 billion gallons they burn each year. Biofuels made from chicken fat, algae, or weeds like camelina are now being mixed 50/50 with jet fuel. By next year the U.S. Air Force wants all of its planes using the mix and the CEO of Continental says all commercial jets will be using synthetics within five years.

How significant is this? The U.S. Airline industry has reported net annual profits of $2.9 billion only six times in their history. A 5% reduction in fuel costs would save $1.5 billion per year. Cut fuel costs by 15-25% and the impact on the bottom line is staggering.

The hits just keep on coming. Here in northern Michigan, for instance, a company called Recovered Energy Resources Inc. has proposed a $23.6 million power-generating incinerator for Alpena. It would burn 160 tons of trash a day and generate enough power for 35,000 customers.

At the University of Michigan they're using water to generate electricity. A professor has invented a device called VIVACE (Vortex-Induced Vibrations for Aquatic Clean Energy) that essentially converts water currents into electrical currents. Next year the project will place a series of cylinders on the bottom of the Detroit River and the energy produced will light a new wharf between the Renaissance Center and Hart Plaza. It's clean, renewable energy that costs only 5.5 cents per kilowatt hour, cheaper than wind, solar, or even coal plants (with carbon emissions equipment).

Speaking of coal, what about something called E-Coal? This is being produced by a Seattle company and basically it has all the energy properties of coal but it's manufactured using organic waste.

On the solar side, companies are springing up all over the place and that's creating a glut of solar panels and rooftop systems, thus the prices of these are coming down. A northern California company, Nanosolar, is adding to the development of cheap solar by making solar panels that are as easy to produce as printing a newspaper. It embeds tiny semiconductor particles in ink and then coats a layer of it onto mile long rolls of aluminum foil. A single Nanosolar plant can pump out 430 megawatts of solar capacity a year, about the same of a similarly sized coal-fired power plant.

The family car and lawn mower also is beeing targeted for more efficiency. A Connecticut company, Green Earth Technologies, has found a way to make a substance that is chemically identical to crude oil. The substance is derived from animal fat discarded by slaughterhouses. The company is already making "oil" for 4-cycle and 2-cycle engines and markets the product as G-Oil.

Even your toaster may be getting into the energy game. Andrew deLaski, executive director of the Appliance Standards Awareness Project, sees the appliance industry finding ways to boost efficiency (and lower energy use) by 5-40%. He says the electricity savings is huge, adding "it would be enough to power every home in the U.S. for 2 ½ years."

Now add in the development of batteries to power automobiles, wind farms on the Great Plains, nano technology, and dozens of other revolutionary concepts and you have to be encouraged. I finally agree with that Saudi oil minister. It is "game over" indeed.

Jim Neff is a local columnist. Comments to neffzone@gmail.com. Read Neff Zone columns online at www.neffzone.com/cadillacnews.