Got Milk? Spike in fuel and corn prices driving the price of milk to all time highs

The mainstream media has finally broken the news - higher demand for ethanol has lead to a chain reaction of inflation throughout the food chain. Dairy products like milk, cheese, and pizza are experiencing inflation due to dairy farmers having to raise their prices with a gallon of milk approaching $4 at the grocery stores.

The dairy farmers are experiencing a perfect storm of price hikes for their two biggest expenditures - fuel for their machinery and corn which is used to feed their dairy cows. The dairy farmers are able to pass the cost onto the consumer, so the small pizza shop owner and low wage earners with 5 mouths to feed are the ones who are going to be feeling the pinch.

Now here is my question to you. For the short term consumers are going to suffer from both $3 gasoline and $4 milk, but what does this mean for the long run?

I for one think it could save us from going farther down a path towards chaos. I am serious when I say that. Corn is a commodity that should not be treated like a non-renewable fossil fuel. With the exception of natural events such as hurricanes, droughts, etc the price of corn should remain stable and not be subject to shortages due to government policies.

If our governments, both federal and state, continue to subsidize ethanol investments then we are going to be in a heap of trouble. There is only so much land available to grow corn and only so many bushels of corn that can supply ethanol fuel without affecting our food chain.

So, $4 milk may be a blessing in disguise as long as our politicians are paying attention. This may finally open their eyes to the fact that in order to meet ethanol demand they MUST LOWER OR REMOVE the tariff on imported sugar. Unless cellulosic technology is ready(it seems to be a year or two away) we must have another source for ethanol besides corn. Sugar has already been proven to more efficient source for ethanol and would be much cheaper than corn as long as the 54 cent subsidy is removed.


So, is there anyone out there who still think that corn based ethanol won't have a big impact on our food chain?

Candidates respond to Senate's (watered down) Energy Bill

The latest energy bill that was just passed by the Senate contains a lot of loopholes for auto manufacturers and only an average fuel efficiency requirement of 35 MPG by 2020. It looks like those campaign contributions are already paying off! As Thomas Friedman points out in today's NYT, the hoax is not the threat of Global Warming and Climate change, but rather the promises of our politicians to do something about it. Besides a huge failure on vehicle fuel efficiency the Senate failed to include a mandate for utilities to provide 15% of their power from renewable sources.

Here are some of the comments from a few of the 2008 Presidential candidates. Some of the BS on this bill makes me gag.

Senator Hillary Clinton: “This bill is an important step towards increasing our energy independence and fighting global warming,” said Senator Clinton. “As we move forward I hope we can do even more to spur investment in clean energy and create new jobs.”

My comment: Unlike many of her Democratic rivals Senator Clinton is definitely not playing the "anti-big business" card. Sure, she can trash the Bush administration, but where is the tough talk on the automakers and oil companies?

Governor Bill Richardson: "The Senate's energy bill makes progress, but not nearly enough. I especially congratulate Senator Feinstein and conservationists who finally got SUV's included in the fuel economy standard. But overall it's another band-aid approach, not the comprehensive medical treatment our nation's energy policy needs. The fuel economy standards will not spur serious technological innovation and change. They are still far below those of Japan, China, and Europe. To be world leaders, the United States has to be serious about fuel economy. The Senate's failure to adopt even a 15% renewable electricity requirement is another failure. The future lies in sustainable, renewable energy and both the Congress and the President are failing to prepare for the future."

My comment: I think Richardson is definitely one of the few who truly get this issue. Too bad his state is ranked close to last place in about every major category from education to healthcare.

John McCain: "We don't want to do anything that would kill any of the Big Three", "I would prefer to see it done voluntarily, myself..." "You're seeing a different attitude on the part of the manufacturers," he said. "They're going to have to make adjustments. Manufacturers all know that. And the industry is in trouble. We all know that."

My Comment: What ever happened to that wily maverick named John McCain? Talk about selling out.

What about Mitt Romney, Rudy Giuliani, John Edwards, and Barrack Obama? Unfortunately I did not find any quotes related to this energy bill but I did want to mention a few of my observations.

First, Obama did go to Detroit to speak to the automakers and mentioned a plan to trade health care insurance assistance for higher fuel standards. He also proposed a plan to increase fuel standards by 4% annually. Obama's website had some nice content on where he stands on Global Warming and I think he is a candidate that is serious about breaking the oil addiction.

I would have to say that John Edwards' website has a lot of information on the issue as well, although when listening to him and by reading the press releases from his camp energy issues do not seem to be anywhere near the top of his list of priorities. Thats just my opinon though.

I couldn't even get passed the introduction page to Rudy Giuliani's website. If this was an exam he would fail before he even got to question #1. Maybe this is Rudy's way of forcing you to donate to his campaign?

Last but not least is Governor Mitt Romney's website. I have to say I've been impressed with Romney overall so far but the lack of details on energy issues at his web site is disappointing. Here are some video clips of him speaking to energy issues and energy independence. He doesn't get into specifics and his responses seem to be very generic. I would have to say the jury is still out on Mitt for this issue although I really liked his quote that "Healthcare, education, and the environment are not Democratic issues. They are American issues."

Google says "Don't be Evil - be Green!"

The news of Google.org's RechargeIT initiative is very exciting. With companies as powerful as Google putting their money where their mouth is I feel a sense of hope that we still have a change to turn things around because let's face it - our politicians and the majority of the "traditional" corporations have had enough time to do something about climate change and energy independence. Both have failed miserably.

Now it is the Google guys' turn. The RechargeIT initiative is similar to the one proposed by the Mayor of Austin, Texas. Here is how it works - Google will utilize its 1.6 MW solar installation (largest of all corporate campuses) to recharge its fleet of plug-in hybrid vehicles while they are parked during the day, and, they will also utilize vehicle-to-grid technology to feed excess power back to the grid which would then be distributed by the utility.

Talk about a breakthrough. If this is indeed a viable technology - it has been around for a number of years now - our vehicles will no longer be gas guzzling pollution emitting people transporters, rather, they would become zero or low emission portable power stations. It could be ten years or longer before I see this technology here in my area, but I think that thanks to Google's lead this could be a common practice within the next few years in more progressive regions like California and Austin.

Google's Great Barrier Reef

Toyota Prius Plug-in

79.6 MPG 142.5 Wh/mile

This car is a gasoline-powered Toyota Prius that has been modified by adding a second, larger battery. The additional battery can be charged using a normal 120-volt outlet, ideally at night when electricity demand (and cost) is at its lowest.

City of Pittsburgh and local startup Plextronics receive DOE funding

The Department of Energy announced today that as part of the Solar America Initiative it was providing $60 million in funding for solar energy research. Pittsburgh was one of the 13 "Solar America Cities" selected to receive funding for solar energy projects in a move that I hope kick starts the Green Pittsburgh movement. The DOE will provide financial assistance and will assist city officials with energy planning and solar integration. Sounds like a nice win for the burgh. I hope to follow up with a status report of the two year project once it begins.

Plextronics is a start up I have been following for some time. The company is funded by several of the leading VCs in this area and it's management team consists of several Carnegie Mellon and University of Pittsburgh alums. Plextronics' product pipeline looks very promising, particularly the printed electronic solar cells. The DOE's $27 million PV Incubator award will be split among a number of early stage solar companies that are predominantly from the west coast, with Plextronics expecting to receive up to $3 million of the total. The award would be used to fund commercialization of a thin film organic PV material, known as OPV, that would be applied to low cost solar cells. The Plextronics press release is here.

Hurting their cause - When individuals or segments of activist groups go over the top

Following my post on meeting up with Greenpeace in Chicago my friend who lives on Chicago's northside said that I was "joining up with a bunch of terrorists." He was referring to news of several incidents in which Greenpeace members from other geographies and countries went a little too far and actually did some things some would call "piracy." The charges of piracy came about when Greenpeace boats rammed into whaling boats. I think that is a ridiculous way to make your point and I do not condone it. I also do not label Greenpeace an "eco-terrorist" organization as this is an example of how idiots are everywhere and how idiots ruin it for the responsible ones.

The thing that made me think of this was a story from a friend this evening in which he and his car were caught in the middle of a Critical Mass event in Pittsburgh's Oakland neighborhood. My friend was actually harassed as a mob of bicyclists surrounded his car and shouted and cursed at him. It came to a point where one of the riders hit his car with a bike lock, causing some damage. HOW RIDICULOUS!!!! Talk about hurting your cause. Just like the Greenpeace example, idiots are everywhere and just because a few of them did this at a Critical Mass rally in Pittsburgh it doesn't mean all members are complete loons.

Anyone else have any negative experiences with some of these activist groups?

What happens when politicians are former scientists, engineers, and economists?

They actually get it! China is considering a ban on all corn and food based fuel production. The politicians in China realize the consequences of food inflation due to increased demand in the corn when used for fuel. Amazing isn't it?

Message to our government - swapping Petro based fuels for Ethanol is not the answer!!!

While we're on the subject of ethanol, for those of you with access to The Wall Street Journal, Matt Vella has an excellent story on his road trip around the US driving an E85 FlexFuel Chevy Suburban. Mr. Vella points out that while there are environmental benefits to driving with E85 fuel, because of lower fuel efficiency of ethanol a gasoline only Toyota Prius would achieve great efficiency and less green house emissions. Here are some of the highlights:

"My excitement at having a full tank of E85 was quickly dulled by the lack of perceptible performance difference between the renewable fuel and regular gas. The driving experience was, in fact, indistinguishable. No electrical whine of a hybrid motor. No gurgling growl of a diesel. Nothing to let me know I was driving greener.

Reduced fuel economy was noticeable. A Suburban gets between 14 and 20 miles per gallon, whereas on E85 the same vehicle earns just 10 to 15 miles per gallon.

Pros: E85 is a renewable energy source; growing feedstock – usually corn -- recycles carbon; fewer emissions; gas engines require no modifications to run E10, a blend of gas with 10% ethanol, and minor changes to burn E85; cost premium of an E85 capable vehicle is just a small fraction of diesel or hybrid technology; flex-fuel vehicles can run on either gas or ethanol.

• Cons: E85's low-energy content drops flex-fuel vehicles' fuel economy by about 30%; limited availability; looming concerns over water used to grow crops, soaring corn prices.

"

Positioning Pittsburgh for the Future

Today's Post-Gazette article by Carolyn Pengidore of Comperio Energy asks how can Pittsburgh position itself to take advantage of the economic opportunities associated with alternative energies and green practices. Her article mentions how Pittsburgh must get ahead of the clean energy tidal wave and take advantage of Governor Rendell's new energy independence initiative. Here are my thoughts on how we must reposition Pittsburgh as a region known for clean tech and green policies

To start, Pittsburgh has the story - a city that was once the industrial center of the world - black smoke and all - and one that is still in the midst of a major social-economic transformation. The reason I believe we are still in the transformation stage is that Pittsburgh does not have an identify - nationally and internationally - as being known for something besides the "Steel City." The region is also behind the curve in terms of immigration - most large cities already have had an enormous influx of Mexican immigrants and I believe Pittsburgh's low cost of living will soon lead to the same effect happening here.

One thing is clear when looking at all of the regional marketing and communications for the region - the messaging is confusing as those in regional development positions, our elected officials, and their overpaid consultants still struggle to come up with a new identity for the region. "Great place for families" and "Most livable" are two messages I see a lot these days but they don't really define the region as a whole and arguments could easily be made against both claims (high taxes, public school quality, air quality, etc).

I know how important the industrial heritage is to this region so I'm not stating that the next big thing for Pittsburgh will make the steel association obsolete. The Steel association is important to the region - it brings up images of how Pittsburghers played a critical role in the industrial revolution and laying the foundation for this country. It reminds us of the hard working European immigrants who settled here and made Pittsburgh the city we know and love today. It is also why I find it puzzling that our past full of diversity and change brought on by the immigrants and industrial revolution are represented by a culture of "Who Moved My Cheese" and intolerance to those who are "different" than the rest of us.

However, as Dick Florida and many others have pointed out, the old Pittsburgh mentality is the exact opposite of what is needed today to fuel growth in major metropolitan areas. Pittsburgh needs to be open to change and tolerance and needs to take the lead on something just like it did with the steel industry. As Ms. Pengidore points out in her Post-Gazette article, the region is positioned nicely and has the amenities to be a leader in clean tech and renewable fuels.

What we need now is an audacious plan that positions the Pittsburgh region for the next generation, a new identity that is more than just a marketing pitch or press release . This has to be more than just offering grants and incentives like the Rendell Energy Strategy. This initiative, this plan - it has to be a plan that covers the entire region and leverages all of the intellectual as well as risk capital that is available for something of this scale. Creative Destruction may be in order for a change of this magnitude , a revolution if you will, as we will be redefining one of the important American cities of the 20th century. This audacious plan needs to be big enough and broad enough to anoint Pittsburgh as the "Green" city rather than a Steel City. Where do we start? How do we do this?

First, it's time to start trumpeting our successes with green practices - more national and regional marketing of our leadership in Green Building is an easy place to start. Pittsburgh is home to first LEED certified convention center, in addition to many other buildings with green designs (full list is here).

How about green companies? Pittsburgh is still the birthplace and home of the central offices of Alcoa, one of the greenest and socially responsible manufacturing companies on the planet. How about clean tech startups? Plextronics is an early stage company based in Pittsburgh that is working on manufacturing a breakthrough thin photovoltaic material that generates solar electricity.

Here are some of the things we have going for us in the race to become the "Green" city:

• Leading city for green buildings
• Support and research at leading academic institutions (See CMU's Green Design institute) as well green graduate degree programs (why isn't CMU marketing it's GREEN MBA program???)
• With Consol Energy's presence, the Pittsburgh region could become known as a leader in clean coal technology (let's hope the folks at Consol are sincere)
• State alternative fuels and energy grants and incentives (part of Governor Rendell's Energy Independence Strategy)
• Large urban parks and creation of 3 rivers parks and trails
  
• Poor air quality rankings year after year which provides some extra incentive to get going on these initiatives

Here are some of the hurdles that I see preventing us from reaching the goal of being known as the Green City:

• Risk averse culture - status quo is the easiest route so why should we change?
  
• Local government support - politicians not on board with this movement yet and once Steelers season starts forgettaboutit
  
• Lack of incentives for green businesses - subsidies going towards casinos and sports stadiums rather than young innovative companies that will bring jobs and capital to the region
• Lack of public and government support for mass transit and car pooling - how do we incentivize people to stop driving their cars? (parking tax hikes are okay as long as there are viable alternatives for commuters such as light rail) How do we raise more money for more rails?
  
• Lack of a manufacturing sector - most of the solar manufacturing companies are out west - close to the venture capitalists. Incentives are the only real option we have right now to get them here

• What other areas are we weak when it comes to going green? Please comment with your suggestions.

Stay tuned for Part II on building a Green Pittsburgh

Greenpeace in Chicago

On my walk back to my hotel after work today I ran into several members of Greenpeace's street team who were in town for the opening up of a new Greenpeace office in the windy city. I talked to one volunteer, Johnny, for several minutes on a number of topics, several from the posts on this blog, while he opened my eyes to several environmental issues I was unaware. Jonny Henderson (far left in picture), who hailed from the Los Angeles area, filled me in on the Trash Vortex that is killing wildlife and destroying the environment and beaches of the west coast. How did it get this bad?

We also touched briefly upon politics and he agreed with me that the Governor of his home state, while being a little over the top, is doing great things to lead the green movement. We also agreed on the dangers of liquid coal and how our politicians don't get it when it comes to ethanol, but I don't think Jonny was as keen on Wal-marts new environmentally bent. I told him to at least wait until we see if Wal-Mart does indeed put its money where its mouth is.

Oh, and I signed up to be a donating member of Greenpeace. Up until today I wasn't too aware of their purpose and initiatives since it seems that they are all over the place, but I was impressed with some of the big wins they've had when it comes to changing the habits and practices of big corporations like Coca-Cola, Dell Computer, Motorola, among many others. To donate please follow this link.

Save the Environment - reuse your towels!

I love how serious all of these big corporations are taking climate change but seeing this message hanging from the towel rack in my room at the Wyndham Hotel made me wonder ...are these companies genuinely interested in saving the environment or are they using the environment as an excuse to cut corners and save a few bucks - or worse - are they using it only in their marketing but not in their daily operations - like the big oil companies.

In the case of Wyndham hotels - their request for their guests to reuse their towels seems to be authentic. According to some research I did on the internet the hotel chain has had this practice in place as far back as 2002 or 2003 - long before the green "boom."

Is it possible that some financial analyst or marketer approached management and said "hey - this would be a great way to save money AND market the company as environmentally responsible!". Certainly. I myself was once a financial analyst who proposed investment in solar power at the company I worked for. Not only did I have to do the spreadsheet analysis but I had to stress to marketing how it was a "win win" since we would save millions of dollars over the years while simultaneously improving our public image. That is the reality of green business - it takes one person who is passionate to get the ball rolling - myself in this example - but it takes the selling of the idea to others who may be less passionate and who are the ones calling the shots.

So - does it matter if a business is implementing green practices because it wants to save money rather than doing it solely for the sake of saving the environment? Well, it would be nice if this was a perfect world and everyone was in it for the right reasons, but the fact is that they are doing something that will help save the environment. Regardless of their motives it is still probably more than they would have done in the past. Actually going green is better than just saying you are going green and not following through on that claim.

Summary of Corporate Climate Response Conference in London

Rohit Bhargava wrote a nice summary of the event over at the CCR blog

"Below is a wrap up of the event and some central themes that may offer a useful summary for those looking to plan or do more within their own organizations for climate response. Perhaps it will also serve as a look forward at the next Corporate Climate Response event in Chicago later this year:

1. Reinventing Waste - Several of the best ideas from the event centered around reinventing the idea of what we call “waste” and considering it more in terms of “byproducts.” This idea was echoed through a discussion of heat and power and the insight that the amount of heat generated through transport in the UK is nearly equivalent to the amount of heat required to supply for current demand. The challenge is how to get it from one place to the other.
2. Low Carbon Does Not Equal Low Fat - A spirited discussion ensued on the topic of whether consumers may believe that simply because food products are farmed, packaged and shipped in an environmentally friendly way - they are automatically healthier. This, of course, is not true - but the smart marketers may see an opportunity in this. Whether or not Grove Mill’s zero carbon wine tasted sweeter or cleaner is not the point. In marketing where you are selling the story, the low carbon story is becoming more and more appealing to consumers.
3. Carbon Credits Are Misunderstood - This was a nearly universal theme that was shared by most panelists, speakers and even attendees. Consumers do not understand carbon credits as they work today, and therefore are as likely to see them as a “get out of jail free” card for companies, as we they are to see it as a beneficial effort for funding environmentally friendly and sustainable projects. The only solution is to offer more transparency to consumers about what these carbon credits actually buy. The credits may be virtual in nature, but seeing images of a carbon farm that is funded by these credits is very real. The industry must do a better job of demonstrating these efforts to counter the skepticism from consumers (and from much of the media).
4. Budget Is Not A Barrier- Perhaps the most encouraging part of the entire discussion was the refrain repeated from many speakers about how getting approval for major capital expenditures need not be the only way to affect change. The Church of England is advocating for each parish to go through a checklist and make changes to save energy and therefore saving money. Marks & Spencer is saving millions of pounds by switching from curved fridges in certain store sections to straight fridges. BT is working to change an outdated perception about the required level of cooling in datacenters. Each of these are low cost efforts in terms of expenses, but potentially yield big savings and impact on the environment.

At the end of the entire event, one is left with a sense of hope that there is much businesses can do without the necessity of spending huge amounts of money to make a change in their current processes. Everyone is aiming for a target of reduction from 30% to 50% of current levels … which, if anything, simply demonstrates how much wastage there is in the system that we have the opportunity to change. Climate change initiatives do not have to be painful or expensive. They simply need to be made a priority"


Video clip of Andrew Slavin's summary of the CCR