Shame on Canada – Kyoto
Posted on | December 13, 2011 | No Comments
I suspected this moment would arrive, but it still does not lesson my disappointment. Our government talks about the fact that jobs would have been lost and we would loose several billion dollars in the form of carbon transfer payments. All this might be true at this point in time, but the exercise in implementing the Kyoto Protocall was to make a change to our carbon economy. It was to put all the developed nations on a level playing field, but now Canada has just opened the door to a very slippery slope.
Here in BC and across Canada we saw several programs that came into effect in 2009 and early 2010 in preparation for the Olympics, but once the world took its eyes off BC, the window coverings were removed. What our Canadian Government needed to do was to take a stronger stance and greatly support green initiatives beyond the meagre support we see today. We needed to implement significant mandates across Canada so that the private sector can step up and solve our carbon problems.
To simplify and allow everyone to understand the real issue at hand, what is happening is, “We are stealing from our children.”
As Canadians we get caught up in policy and how it will affect us today and then we put all our energy into fighting for todays status quo. We do this in the name of our children because we believe that if some environmental policy were to somehow negatively affect our ability to provide for our families our kids might not get the latest iPad for Christmas. As a parent we can all understand that we have to make tough decisions on behalf of our kids like “No chocolate or candy for dinner.” We all agree that if we gave our children candy in place of a balanced diet our kids would become obese and we would be robbing them of decades of life expectancy due to heart disease and other dietary issues when they grow older. Well, anytime we remove a limited resource from the ground today, that is one less resource for our children, effectively doing exactly what candy does, it dramatically reduces their quality of life.
Quite often we forgot to analyze our problems without an end goal in mind. We need real sustainability, a big picture of where we need to be and a general plan for how we will get there. To be successful in business, CEO’s need to do this, and if our government is going to invoke real change we need them to take a lead role because the private sector is only concerned with their own microeconomics. If we are going to preserve our economy, energy reserves and the environment for our children, we have no choice. We need our government to create a plan now, which should be our nations number one priority. Dropping out of Kyoto was not a solution, it is a symptom of our neglect.
Our government needs to implement significant changes to its green policies, starting with the over funding of the oil sands and other fossil fuel endeavours. We should NEVER use public funds to support the oil industry. The oil industry is highly profitable and does not need public funding. Remember that fossil fuels are a limited resource. If fossil fuels require additional funding to support extraction, just let the resource sit in the ground until market prices climb higher and then it can be funded on its own. This is something our children will be grateful for, instead we are subsidizing the removal of a limited resource from our children’s balance sheet.
Tags: BC > Canada > Economics > Environment Minister > Hydrolic Fracturing > Kyoto > natural resources > Peter Kent > Subsidies > Sustainability
Investing in Algae – Part 1 ‘The 10 Year Haul’
Posted on | September 22, 2011 | No Comments
Pacific Rim BioEnergy is currently in active fund raising mode and although our technology and the organization of our company has had to cross many hurtles, fund raising may turn out to be one of the biggest hurtles we have to face. You could easily say that money is getting tight and that there are rampant concerns about the state of our economy but the issues of fundraising within the algae industry go much deeper than that. I suspect others in our industry are feeling this same challenge. The issue all comes down to the sheer enormity of a commercial energy project. The vast majority of individuals simply don’t recognize the scale and the costs associated with the energy industry. This is not an inexpensive endeavor.
I look around at some of the major players within the industry and they are all settling for a scaled down version of their perspective commercial projects. The way I see it, investors are becoming a bit jaded over the opportunity associated with algae. Algae has had such a good story behind it for so long that it has now lost it’s momentum. One of the most popular discussions within algae blogs revolve around, “If Algae is such a pervasive oil producer than why don’t we see any large scale commercial algae oil production facilities?” The typical algae industry response to that is that there are many challenges, typically one of the most challenging is the high cost of capitalization and the low revenue opportunity due to cheap oil. That being said with large scale advances over the past 5 years in a wide variety of fields it would appear that there are several companies out there that are able to achieve price parity with petroleum. I suspect there are a few readers out there who are thinking, “That is great news”, now we can kick our fossil fuel habit and we can move on to our pre-destined world that has been foretold on Star Trek’s, ‘The Next Generation’.
As many of you know things are not that straight forward and there will always be one more challenge yet to be overcome. I am certain that everyone reading this blog has heard about the parable regarding the frog and the pot of boiling water. If you put a frog in boiling water he will jump right out immediately. If you put the frog in warm comfortable water and then heat that water up slowly to a boil, you will end up cooking the frog. This story is highly representative of the oil industry where big oil is telling us not to rock the boat because we have this nice hot jacuzzi and life is good. Little do we know that this hot tub is sucking the energy out of us and it is going to get progressively harder for us to muster the resources required to get out before our economy suffers irreparable damage.
Before I get back to the real world and the issues at play, I would like to take a moment to quickly tell you about our company. We have achieved results that are more than 10 fold in yield over your typical open pond algae farm which on their own do remarkably well, as they can achieve a yield of 30x that of soya, which is the most popular form of biodiesel in the US. We have come up with an engineering solution that was designed to the constraints of our Canadian climate. We don’t need the benefits of an equatorial zone, we don’t have the associated benefits of a desert climate, what we do have is a contained solution which is able to eliminate the emissions of our provinces largest CO2 emittors and requires little in the way of flat land. In fact slightly sloping land is to our benefit. Taking up very little land gives us the advantage of being able to locate our plant close to market opportunites. Although our process is slightly more capital intensive than your typical algae operation, low transportation costs and the overwhelming revenue to cost ratio associated with dramatically increased yields provides Pacific Rim BioEnergy with a key market advantage over other diesel and biodiesel offerings.
Now back to the real world and why such a rosy story is not a slam dunk. Remember our friend the frog. It turns out that he likes his very hot jacuzzi so lets have a closer look at why he has not jumped out of the hot tub yet. The oil industry, our preverbal pot, commercializes on 10 year cycles, which is very different to the tech industry, which can go from concept to commercialization in well under 3 years. That being said the oil industry, and the algae industry for that matter are both highly technical in nature, much like the tech industry. The money spend on R&D from a single oil company dwarfs the budget of all those government bio-funds combined, so why does it take 10 years to move a commercial project forward for the oil and algae industries. Well it is all about simple risk mitigation.
The energy industry is huge. and to get a large commercial projects off the ground it takes a lot of scaling up and testing because if you are investing 500M or in some cases Billions upon Billions of dollars in an energy project, you want to be damn sure that what your building is going to work at scale. This massive scale is where the algae players often fall short as some technologies do not apply themselves well at scale. It is also why investors are tentative about jumping out of their nice and hot jacuzzi’s. You see venture capitalists have gotten very comfortable over the years with their 5 year out and only seldom will they accept a 7 year investment. To ask them to take part in a 10 year opportunity is simply out of the question, especially with the kind of money that is required of an energy project. The oil industry is different. They are a mature entity that can diversify investment across several projects and they have a significant number of other benefits in their favour which I will go over in greater detail in another post. What it all comes down to is, commercialization costs a lot, and we need investors who care enough that they are willing to work with us in finding a better solution.
So what is that solution. An IPO is a tricky beast. Those algae companies who have gone before us have had some great success with this. It provides an out for early angel investors. IPO’s are not easy, especially for companies with only a few years of minimal revenue under their belts. Our plan is to slowly ramp up our facility to provide 3rd party validation and to develop active sales channels for our product and so large revenue in the beginning is not in the cards. On the other hand we do foresee ourselves being slightly revenue positive year after year, but we won’t be opening up the taps because our number one priority will be to mitigate investor risk by proving processes and implementing elemental changes as we scale up. This whole process makes an IPO, very tricky business. The better option is to be on the look out for a ‘Mergers and Acquisitions’, opportunity within the next 3 years.
That being said, from my perspective, although the path of success is partially driving by a winning technology. In our case we have made a significant leap forward with a significant increase in yield over previous algae opportunities. Real success though needs to first overcome a tub full of jaded investors who have been continually watching the algae opportunity with marked improvements year after year. Now we are bringing a significant opportunity to the table and in that time the hot tub has been working it’s magic. This time it is about the risk of potentially subjecting their cash to a 10 year hiatus.
Hmmm… where do we go from here. How do we cross that preverbal chasm that VC’s like to refer to in the world of start-up’s. Usually it is about marketing your product better, or showing the difference between your product and the next so that you can get consumer buy in, but when it is the investors themselves that are the stumbling block, how do you resolve that? I look forward to any comments you may have and although getting such a business going takes away from my time posting, I hope to follow up on this with Part II sooner rather than later with my own insights into the issues of investing in algae.
Tags: Algae > Algae Industry > BioDiesel > business > Canada > Commercialization > Economics > government > Investment > Oil > Petroleum > Risk
Pacific Rim BioEnergy seeks additional $250K
Posted on | August 16, 2011 | No Comments
In Mission, BC Canada, Pacific Rim BioEnergy is seeking an additional $250,000 in R&D funding to finish up its validation process before it moves into its beta stage of commercial development. Pacific Rim’s technology is based on a high density growth process that it feels will revolutionize the industry. We will be posting more information on this subject in the next few days.
Tags: Algae > British Columbia > business > Canada > Development > Research
Update on BC Mandates
Posted on | July 18, 2011 | No Comments
I have been meaning to write this retraction on the BC Biodiesel mandates, but I have been way too busy. I must say that following that initial blog post I wrote, I got a wide variety of emails and phone calls. It was quite inspiring to chat with individuals out there who are trying to make a difference. Quite often we are quick to make rash assumptions about our government and the way in which they conduct business. It would appear that the BC government is very focused on achieving their goals and I applaud them. “Good work”.
Not only are the major petroleum distributors meeting those mandated volumes, but from what I understand they are in fact exceeding those volumes. Before I start praising the oil industry too much, we need to understand that they are most likely doing this to ensure they will not be penalized and secondly, by greatly exceeding volumes early on in the annual count their is not as big a concern regarding potential supply shortages later on in the year.
Now that the Canadian biodiesel mandate has kicked in, supply shortfalls will become a much more serious concern. It is critical that our government stay focused on the goal. With new mandates coming online, the oil companies are going to be putting a lot of pressure on our government to backtrack on their biodiesel mandates. We need to make sure that the oil companies are putting it in their best interests to work with biofuel start-ups. This is an industry with a significant volume of capital at their disposal. They need to be encouraged to invest some of their dollars if need be into advanced biofuels to ensure that the BC mandates are being maintained.
If anyone from the BC Government is reading this post, in addition to these biodiesel mandates we also need to mandate that the oil companies assign a minimum percentage of their pumps to Biodiesel. Currently the oil companies are blending their fuels at their discretion. This lack of consumer knowledge of these blended fuels feeds into the status quo. This behavour will maintain the belief that biodiesel is somehow the lesser of the two options. If 10% of all diesel pumps are required to carry a specific volume of biodiesel along side current blended fuels, consumers might drive demand beyond the 5% mandate and the market could then be driven by more of a supply demand model instead of government mandates. An example would be for every one in 10 pumps, maintained a side by side option of a B10 blend for example, this choice would not only provide more transparency in the oil industries actions, but it could also create market driven demand.
To drive up that demand government could then advertise and promote biofuel usage. “All diesel is blended with biodiesel, it’s better for your car and the environment. Now show your support and fill up with a higher defined biodiesel mix at specially designated outlets with, ‘B25 in the summer and B5 in the Winter.” Obviously I did not spend a lot of time coming up with an advertising message, but the point is that real solutions are only going to come about when it is driven by actual consumer behaviour and not just from government mandates. Don’t get me wrong though, keep the mandates coming, I am just saying that there is a lot more we can do in addition to our current mandates.
Tags: BC > BioDiesel > British Columbia > Canada > Fuel > government > Sustainability
Algae BioEnergy Community
Posted on | June 16, 2011 | No Comments
To better network and understand the different algae companies around the globe I have taken it upon myself to create a map in google and share all rights and privileges with the rest of the algae community. The goal here is to create an extensive listing of the different players and their technology as it pertains to their geographic point of reference.
View Algae Community Interactive Map in a larger map
I hope those interested and are participating in the field of algae development will join with me and add themselves to the map.
Is BC’s Biodiesel Mandate a Sham?
Posted on | April 29, 2011 | 1 Comment
Something seems to be very wrong here in this province. I keep searching and searching and searching but I cannot for the life of me find any evidence that BC is importing BioDiesel to achieve its biofuel mandates. These mandates were set up in the early to mid 2000′s by the Campbell Government as a fiscally responsible approach to environmental leadership. The point was to make BC a leader in environmental practices and at that time, with the Olympics, we were supposed to show how government could make a difference in doing the right thing for the environment while encouraging economic development. Now that I have been poking around, I can only conclude that the biodiesel mandate to put our province on a path of environmental reform is simply just a sham.
If I am right, the oil companies might be getting away with a reduction in their payment to our Provincial Government in the form of unpaid fines to the tune of $150+ Million. Our province is being stretched as it is and that kind of money is much needed right now to pay for such things as teachers salaries and upgrades to our hydro electric infrastructure… For the oil companies who are supposed to make these payments, each one of them saw an increase in their profits this year greatly exceeding such a payment. Together they could have made the required payment and still had a boom year. I for one would like to see a detailed accounting of how the oil companies are keeping up with this biofuel mandate.
Some of you may have noticed that I was looking to see if there had been any biofuel imports to BC this year. You may be asking why I am looking to see if anyone is importing biodiesel? Well, the answer is quite simple, because currently BC cannot even theoretically produce enough biodiesel, even by converting agricultural seed crops, to replace a measly 4% of our diesel usage, let alone the 5%, which is what the mandate is for 2012. Don’t get me wrong, such an overzealous mandate is a good thing. In a world where our resources are dramatically diminishing we need to force the existing infrastructure and the scales of supply and demand to come up with a better solution. The whole point of this mandate was to force the oil companies to create a false demand so that the scientific community and clean-tech entrepreneurs could come up with solutions, such as a highly scaleable algae to oil bio-diesel plant. With these aggressive mandates, these type of solutions would have an established market to sell to. The oil companies control liquid distribution in this country and without mandated access to this distribution infrastructure it would be impossible to take a commercial scale biodiesel project to market.
The energy market is the worlds largest economic sector and the oil companies are simply too powerful. We need government to institute change and when they institute change they need to stand by their mandates.
It wasn’t until I began doing my due diligence and market research that I discovered this lack of information on who might be suppling our shortfall. Currently BC only produces 20.9 million litres of biodiesel each year. This accounts for less than a single percent of the diesel sales in this province. In 2010 we were supposed to have a 3% mandate, so to make up for our 2.4% shortfall we were supposed to import the remainder. As of yet I have found no proof or even any talk of importing this required shortfall. Now we are in 2011 and we have a 3.4% shortfall and still no announcements by any US, Asian or European bio-oil or biodiesel producers announcing any big contracts to sell biodiesel to the BC market. You would think a 150 Million Dollar contract would be something to tell investors about so that you could rally your stock prices.
If I am correct and there is no biodiesel being imported to make up for this shortfall, it is a big deal and there are many reasons why we need to correct this situation. These mandates are critical for many reasons;
- It forces the transportation infrastructure to clean up its green house gas emissions
- The biofuels industry could generate high paying energy jobs in our province instead of spending billions on importing fossil fuels
- If the oil industry is getting away with not paying the appropriate fines our provincial government is loosing out on millions of dollars
- Without this excess false demand created by these mandates, the biofuels industry has no incentives and no market to bring new technology to play.
If my suspicions are correct, we as British Columbians should be mad as h&#* for the sake of both our economy and our environment. It is critical for anyone who is in the ‘know’ to respond to this article and to flush out the facts. Now that the Olympics have come and gone and the worlds eye is no longer on BC, the Provincial and Federal Government seems to have put a complete stop to all programs that were once in place to initiate a clean technology revolution. I look for ward to your comments.
Tags: BC > BioDiesel > Biodiesel Mandates > British Columbia > business > Canada > Economics > Economy > government > Greenhouse Gases > natural resources > Oil > Petroleum
PNNL: News – Study: Algae could replace 17% of U.S. oil imports
Posted on | April 16, 2011 | 1 Comment
Researchers at the Department of Energy’s Pacific Northwest National Laboratory found that water use is much less if algae are grown in the U.S. regions that have the sunniest and most humid climates: the Gulf Coast, the Southeastern Seaboard and the Great Lakes."Algae has been a hot topic of biofuel discussions recently, but no one has taken such a detailed look at how much America could make – and how much water and land it would require — until now," said Mark Wigmosta, lead author and a PNNL hydrologist. "This research provides the groundwork and initial estimates needed to better inform renewable energy decisions."
via PNNL: News – Study: Algae could replace 17% of U.S. oil imports.
Tags: Algae > Algae Industry > Algae Production > Economics > Economy > government > United States
The lighter side of Saving our Planet
Posted on | April 8, 2011 | No Comments
After many months of trying to find a carbon neutral solution, it would appear that in Vancouver they have found a carbon neutral solution but as this video shows, some people are not too happy with the results.
OK, now back to the grind of finding a solution for everyone.
Canada vs US Biofuels Industry
Posted on | April 4, 2011 | 2 Comments
WASHINGTON — President Barack Obama on Wednesday, (March 30th, 2011), called for a one-third reduction in U.S. oil imports by 2025, reviving a long-elusive goal of reducing America’s dependence on foreign supplies as political unrest rocks the Middle East and gasoline prices rise at home.Even if Obama’s efforts can reduce U.S. demand for foreign oil, experts say they’re unlikely to bring down the cost of gasoline, since oil is priced globally and increased demand from China and other developing nations continues to push prices up.
The president also ordered government agencies to ensure that by 2015, all new vehicles they purchase are alternative-fuel vehicles, including hybrid and electric. Obama has previously set a goal of putting 1 million electric vehicles on U.S. roads by 2015.
- Huffington Post Read More
The US has some very aggressive initiatives directed at driving the alternative fuels industry such as the $1.00 per gallon subsidy on biofuel. This announcement plus the aggressive past mandates will undoubtedly put additional pressure on our Canadian federal government to act on behalf of the alternative biofuels industry. Because of our free trade agreement with the US it is going to put some significant pressures on our government to come into line with US policy.
In the event there is additional unrest in the middle east, the resulting action would be a major shift in the demand for our Canadian Oil. The problem is that the vast majority of pipelines out of Alberta run North to South into the United States. British Columbia, and more importantly, Ontario and Quebec are vary reliant on imported oil.
When the free trade agreement was set up, there was specific clause inserted regarding transportation fuel to protect US interests. It broadly states that the Canadian Federal government cannot legislate favourable pricing within Canada, ensuring an open oil market between our two countries. With advanced biofuel becoming a key component in our transportation fuel needs here in North America, there is going to come a time when that same piece of free trade legislation will begin to create a whole new issue and those of us in the Canadian biofuels industry might see some significant benefits.
Almost ten years ago, February 2002, the US Senate accepted a $1/gallon subsidy and that $1 subsidy is still in place today. Here in Canada, the only thing that we have seen in support of biofuels has been a recent 3-6% carbon tax reduction for biofuels. In the US, this favourable subsidy has slowly filtered throughout the supply chain resulting in such practices as large payments to restaurants for their waste oil. This difference in dealing with biofuels, for both the US and Canada, has resulted in two very different business climates. In the US, the biofuels industry is much larger and fatter. In Canada we are a much leaner and more competitive group.
Another inference from this article is that car and truck manufactures are going to be gearing towards higher biofuel standards and flexibility within their warranties to meet US government contracts and infrastructure demands of biofuel mandates. This will intern give a lot more latitude for growth amongst the biofuels industry.
Now fast track to this future Middle East issue and Canada will be in a bad situation. If Canada needs to import US biofuel, the US will need to sell us fuel with the benefit of a $1.00 subsidy care of the US Government and our free trade embargo. This is obviously going to create some very awkward political discussions. That free trade bargain is a double edged sword. The US will intern put a lot of pressure on the Canadian Government to either equal their $1.00 subsidy or to accept a $1 increase in their sale to cover the subsidy.
Remember now that that $1 increase has over the past 10 years artificially filtered down throughout the US supply chain, but not here in Canada. Either way the Canadian biofuels industry has been build on a lean and aggressive environment and will be well positioned to take advantage of this opportunity to be very price competitive.
Tags: Alternative > Canada > China > demand > Economics > Economy > Electric Car > energy > Fuel > government > Obama > Oil > Petroleum > US
Algae – An Economic and Environmental Model
Posted on | March 31, 2011 | No Comments
I though I would share with you part of my presentation in my keynote address to Squamish Climate Action Network just before Earth Hour 2011. It was so nice to see that many people coming out to an earth hour event. A special thanks to Ana Santos for putting the event together.
When I do presentations I like to be highly visual, using images to deliver the concept in a manner that each individual can relate to in their own way. Although graphs and bullet points are good they just don’t allow you to get a grasp of the solution that algae provides. So I created this model to visualize the solution at work. The following is an economic representation of British Columbia, with your typical urban communities and industry.
With the introduction of Fossil Fuels 100 years ago as a cheap transportable energy source, BC, and the rest of the world, built a powerful economy based around the simple concept of trade, efficiently travelling to work, using energy to build products and then shipping the goods we make to other consumers in urban centres around the globe. Now that we have built this great economy, we cannot let it fail without major economic and environmental implications. We need to be productive to support our massive global population. As you look at this model, I would like you to really think about the complexities of this issue and what it means to you.
The problem is simple, petroleum introduces carbons, that were buried hundreds of millions of years ago, emitting it as a gas into our atmosphere in the form of greenhouse gases. With that in mind, I would like to show you how this algae solution works.
Algae growing facilities can be placed around our provinces biggest CO2 emitters. The reason we would do this is that algae growth becomes exponential when exposed to CO2.
Now instead of having industrial flue gases spewing CO2 into our atmosphere we can direct it into algae tanks to feed the algae. Algae is extremely good at absorbing CO2 and in return the algae emits oxygen. Algae represents the lungs of our planet. Up to 60% of the oxygen in our atmosphere, the oxygen we breath, comes from algae.
The oil derived from algae can produce biodiesel which in turn can be used to run our commercial transportation fleets, potentially displacing up to 25% of the petroleum we burn. To give you an idea of how good algae is at producing oil, I will compare it to corn, corn produces only about 18-36 gallons of ethanol / acre / year. Algae on the other hand, in conjunction with technology provided by Pacific Rim BioEnergy can produce close to 100,000 gallons of biodiesel / acre / year. The reason why we focus on biodiesel is that diesel fuel offers much more stored energy then gasoline and diesel fuel also emits a significantly greater volume of toxins than gasoline does. Algae Biodiesel removes the vast majority of those toxins while maintaining the high energy output associated with diesel fuel.
The concept of becoming totally carbon neutral is not an easy one, and it requires a lot of different solutions in combination with one another such as; hydro, wind energy, solar and a wide variety of other alternative energy solutions as well as simple reduction and recycling of the resources we use. We could become a carbon neutral British Columbia, that does not have to buy carbon credits to make itself feel good. In addition to the elimination of additional greenhouse gases, we would have an even stronger economy because we would be fully energy self sufficient using sustainable sources and we would no longer need to spend billions each year on importing the fuel that drives our economy.
For those of you who did not see my full keynote address, I hope you enjoyed this post and the attached presentation. You are more than welcome to copy, paste and embed this presentation and it’s text, but I would ask that in return you provide the appropriate recognition to Pacific Rim BioEnergy.
Tags: Algae > Algae Industry > BC > BioDiesel > British Columbia > Canada > Carbon Dioxide > clean tech > Climate Change > CO2 > Corn > Diesel > Economy > Environment > Ethanol > fossil fuels > green presentation > Oxygen > Sustainability
