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Alternative Energy Tech for Transportation “Skunk Works” / Could the USPS lead the charge?

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July 23, 2008 – Comments (9)

I was listening to NPR on the way home today from work and there was an interesting segment, talking about how the good old United States Postal Service has a division dedicated to finding ways to be more fuel efficient. This makes sense once you think about it. The USPS operates the largest fleet of vehicles and with rising gas prices, they have by far the biggest incentive to find alternatives to gasoline. They have several labs looking into propane, natural gas, biodiesel, electric, etc. for their automotive fleet. This is very cool and made me very excited to hear it. I was very pleased to hear this about this proactive development.

I am wondering if there is a way to convince our government to take this to the next level. To get an organization like the Department of Energy to come up with a “Skunk Works” program with a mandate to replace all of the fleets of the US governments vehicles with fuel efficient alternative energy ones. If there was a mandate like this, then you would see all kinds of investment money from private sector and the government flow into all kinds of alternative energy investments: Companies like SATC to make electric motors more efficient, Algae biodiesel firms (all of which are private right now) to start increasing output / closing on viable processes through research through large cash infusions, Thin Film solar panel manufacturers like Nanosolar or FSLR. And could you imagine what this would do for GM? If they had a large customer already waiting for a fleet of cars derived of the Chevy Volt concept?

Not only will there be stock plays like these, but biodiesel distribution stations would have to be set up to supply the governments fleet of vehicles, this would in turn be the entry point for the rest of the economy.

This is where the government can do the most good with the economy, come up with a wide-reaching mandate that stimulates a large part of the economy. Much like when NASA was formed, not only did it stimulate the aerospace industry specifically, but materials science exploded, funding into computers increased significantly, etc. And all new industries were formed as a spin-off of a very important government mandate.

I hope we can get a wide reaching government alternative-energy for transportation mandate going. Something like the Pickens Plan is very good for baseload power, and he does talk about Natural Gas for cars. But that is ultimately a band-aid. Biodiesel from algae and electric cars / hybrids that can use power generated from thin-film solar is the next leap that needs to happen that will make a huge difference for the environment, global warming, and energy independence.

Any thoughts on how to lobby congress to put this into action? Has anybody heard about initiatives like this that are happening, either in the US or elsewhere? (For example, Brazil uses a huge amount of its sugar cane for ethanol production).

9 Comments – Post Your Own

#1) On July 23, 2008 at 10:03 PM, Tastylunch (29.24) wrote:

I know my city tries this somewhat on a local level with their Get green fleet, but I don't think it's nearly as radical as your idea BInv

I agree it would be a very good way to get an instant jumpstart on making green cras more conomically viable , but with tax dollars drying up it may be hard to convince gov'ts to spend a bunch of money on new vehicles in the near future...

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#2) On July 23, 2008 at 10:17 PM, anchak (99.84) wrote:

A "skunk-works" is what's required to shake things up. Very difficult to imagine public enterprises invest unless there's govt backing. I am sure a lot of biggies like GE, UTX etc are going to jump - if the govt sweetens the gestation period for payback. I think the Oil lobby is really strong - honestly do you think Exxon really care for this - I think they may already have some of this going - after all if they have any foresight , its about their own survivability - but dont forget , irrespective of whether XOM performs as a stock beating the S&P or the Energy index - their staggering profits mean a huge % in bonus for the executives. I do not think they need to grow profits much - they are sitting pretty. The oil markets are really manipulated - nobody wants to go against the Gorilla

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#3) On July 23, 2008 at 11:45 PM, ajm101 (31.91) wrote:

I bet it comes from the military, since it represents 1/3 of US government spending, and they are fuel hungry.  I can imagine it evolving similarly to the ARPANET -> internet transition, but a little quicker.  Unfortunately the only thing I know of (I'm not in a position too know anything, though) is of the USAF / Syntroleum CTL / FTP contracts.

It's encouraging to see that a oil friendly executive branch can't hold back the desire to move to a more energy independent and environmentally friendly economy - from the California emission standards vs the EPA, to many solar thermal players (including GOOG) vs the BLM.

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#4) On July 24, 2008 at 5:13 AM, binv271828 (< 20) wrote:

Tastylunch

Hey man! Yeah, I hear you. The "conventional wisdom" is that tax dollars are drying up so you need to conserve. But if you think about where much of this tax revenue was coming from 3 years ago (real estate taxes and consumer spending) and how the projections of tax revenue will be dropping exponentially due to falling home prices, stagnant wages which leads to less spending.

This is precisely why the conventional wisdom in this case is wrong. The US has built much of its GDP off two very fickle areas: housing and consumer spending. And the governemnt also relied on these for taxes. They were happy to for years because both areas were growing like gangbusters.

But America has no real dominant position in manufacturing anymore. No real sustainable tax base that generates true value for the economy and the rest of the world. We needed a plan like this 10 years ago, which means it is needed even more direly (is that a word?) now. I agree that it will be a difficult decision, but the payoff is that our economy starts becoming stabilized by true sustainable economic growth, and not just reinflated from a bubble.

I sure there are a few flaws in my logic, but that's the gist anyways :) Thanks man.

anchak

Exactly! People are complaining that alternative energy is not economically viable. This is where government can do the most good, to become a pathfinder with a true mandate to make it economically viable.

To harp back on the NASA example again. They didn't just say, "we'll develop the first stage of the Saturn V rocket and led private industry come up with the rest". This is analagous to the stupid corn ethanol boondoogle. They try to help "solve" the energy problems is a very narrowly focused way that only starts us down that path, and not only doesn't solve any problems but creates food shortages.

A real mandate would have been to invest in biodiesel too (through similar subsidies), thin film solar grants, battery tech investment matching challenges, and a lab that was driving towards a goal on the government side. Because at the end of the day, the goverment can run their cars on $20 gas anymore than the rest of us can.

I hear what you are saying about the energy lobby, and Exxon or Shell could care less. But companies like Conoco Phillips, BP, and Statoil-hydro are really becoming proactive about alternative energy. I think the landscape really is changing (mostly out of necessity, but that is good nonetheless). Thaks for the comments man!

ajm101

Hey, I wasn't even thinking that! But I bet you are right. There will be MIL-SPECs for biodiesel fuel mixtures in the future :). That would be very cool. However congress will probably not try to take on a mandate to change the military in any substantial way.

But an agency like the Department of Energy is ripe for a mandate. I think political will is growing. It would be highly visible to the US and the rest of the world. And it would be a lot more transparent (military research projects, even benign ones, usually have a hush-hush aspect to them. Believe me I know).

Yeah, I am very optomistic about something like this. I really do think it is that far fetched. Thanks ajm!

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#5) On July 24, 2008 at 2:43 PM, LiluTheDog (30.46) wrote:

Your blogs are always thought-provoking and alarmingly common-sensical.  Thanks

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#6) On July 24, 2008 at 4:37 PM, GreenMycon (< 20) wrote:

Great entry.  Great score too -- I'm feeling your pain ;p

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#7) On July 24, 2008 at 8:52 PM, binv271828 (< 20) wrote:

LiluTheDog

Thanks! I really appreciate that!

GreenMycon

Thanks man!. Yep, my rating back down into single digits, just like I predicted :). Yeah, actually I got down as low as 0.89 at one point today, good times :) I hear you about the pain, but it is just temporary. High oil is not going away, just taking a brief hiatus.

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#8) On July 24, 2008 at 10:18 PM, Tastylunch (29.24) wrote:

binv271828

No argument here man, on that they need to change the way they think.No doubt our tax structure is far over relaint on propertt taxes, especially schools. Agian no doubt 'bout manufacturing too. However ther are three roadblocks I see to getting your plan implented

1) 9/10 Politicians are gutless.  Considering the nature of their employment (i.e. having to rewin their job every x number of years) I know few politicians who want to take short term risks for long term gains that will probably show post term.

2) taxpayers are real upset right now. I've gone to city council a lot lately the public is fighting them over every dollar. They cna't get engineering studies approved for even basic road maintenance without controversy.This only reninforces number 1

3) The win-win avenue to raise money (Bonds etc) is not available or not as lucrative due to the freezing of the Auction Rate Securities market.

I think we need real systemic change in our politics or more feasbily a federal mandated "Manhattan project" esque project for this to happen.

I wish you were runnin the show holmes, real stuff would get done.

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#9) On July 25, 2008 at 6:19 AM, binv271828 (< 20) wrote:

Tasty, I know exactly what you mean. There is really no way to overcome points 1, 2 and 3 in the current political environment. You are absolutely correct. So it is so unfortunate that the shortsightedness that occurred the last many years can't be replaced with action now that we have a crisis. $4 gas is a realitiy. And maybe it will relax to $3.50 because the run up has been so fast, but it is going right back up to $4 eventually and far beyond that (IMO).

This is why action has to be taken now, even more than before. But you are right, there will likely be no action on this front. The crisis will have to turn into a full-blown catastrophe before something is done. It will really be too late then though. If this is peak oil effects that we are running into (and I believe they are) then the time it takes to go from $4 to $8 gas will be roughly the same time it took to go from $2 to $4. People will be panicing at that point and it will be even harder to reach consensus on anything. The finger-pointing between Dems and Reps on domestic drilling (which is the dumbest converstation I have heard yet) will be nothing compared to the chaos that will ensue when trying to get the country going in one direction in the middle of an $8 gas crisis.

See, all's I need is several billion $s like Pickens and I could come up with a plan too :)

Thanks man. At the end of the day (many years from now) we will get past this, and real alternative energy vehicles will be a reality. I have no doubt of this at all. It has to happen. The question is, can we get a government that is smart enough to realize this fact and to be proactive about that goal so that we can build an ecomony around it and help ourselves and the rest of the world at the same time? The vehicles will come from somewhere. Some nation will become the leaders in this new era, and it should be the US. I hope it is :)

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