Galactically Stupid

1 02 2011

Some weeks I struggle a little to decide on a topic.  It isn’t for lack of topics for they are like natural gas reserves – at one time I wondered whether I’d be able to find a topic every week.  But like natural gas reserves, as I “worry” about running out of topics, the topic list is vastly outstripping demand.  This week it was easy.

I watched the state of the union address last week, or I should say I started watching the state of the union.  It doesn’t matter who is president, from Reagan through Obama, I can only take about 20 minutes before I am forced to turn it off.  I either get nauseous from the rosy talk or disgusted with vague speak of wrong-headed policy.  Luckily, or maybe not so, President Obama talked about “clean energy” in the first twenty minutes – a topic I’m most interested in. 

As he spoke about “investing in” clean energy, something like 80% “clean” by 2035, I kept asking my TV, “what is he talking about?” over and over.  WHAT IS HE TALKING ABOUT?  As I’ve written many times in this blog, the federal government should get out of picking winners and losers.  Let’s examine an example of the federal government’s brilliance in promoting clean energy. 

Energy Policy Act (EPACT) 2005 issued under 100% Republican power, mandated that 7.5 billion gallons of biofuel – which is essentially 100% corn-based ethanol – be produced annually by 2012, next year.   Last year, the out-of-control EPA declared we should increase the ethanol content in gasoline from 10% to 15%. 

Note what has happened since EPACT 2005.  Due to a combination of easy money, Fannie and Freddie government-backed loans, wild-eyed psychotic institutional investors, hedge fund managers, home flippers, and crap like interest-only mortgages, we experienced a bubble and then a colossal collapse of the housing market but also commodities at the same time. 

The government has a solid track record of screwing up markets and then when the poo hits the fan, there they are, lecturing the private sector and pointing fingers at everyone but themselves, the chief culprits.  The housing collapse fits this model.

The commodity balloon including corn prices that grew in lock step with housing in 2007-2008 put a crushing load on dozens of new ethanol plants that sprouted on the heals of EPACT 2005.  Many bankruptcies ensued. 

As a result of the struggling ethanol industry, the government once again runs to the rescue.  But STOP THE MUSIC!  Think for just a minute.  Let’s establish that ethanol producers are manufacturers.  I think everyone agrees with this.  Manufacturers take commodities, or raw materials like plate steel, bar, ore, grain, sugar, plastic resin and turn them into fasteners, heavy equipment, dipsticks, cereal, Pop Tarts, and ice cream buckets.  They make scarce goods out of less scarce goods, a concept I learned in basic economics in college, or maybe in the third grade when I made cookies from scratch. 

A whopping 40% of our 12 billion bushel annual corn crop goes to ethanol production.  While The Wall Street Journal waxes about food inflation,  which is all too real, what they don’t discuss is this issue of manufacturing the less scarce goods into more scarce and thus more valuable products. 

For the love of Pete, wake up you dunces!  The value of the gasoline the 2.5 gallons of ethanol displaces is worth barely more than the bushel of corn that produced it!  HELLO!  So what’s the response, let’s use even more of the more valuable feedstock for the same old demand of the end product.  This is lunacy; monumentally, gallactically stupid! 

According to the ethanol industry itself,  a bushel of corn produces 2.8 gallons of ethanol, and I’m sure this is the latest, absolute greatest conversion to make ethanol look good.  Current commodity cash prices include $2.40 per gallon of gasoline and $6.25 per bushel of corn.  Do a little math.  The ethanol leaving in tankers is worth barely more than the corn coming in, raw!  This doesn’t include amortization of the plant itself, labor, or the massive amount of energy required to manufacture ethanol. 

The price of corn is elastic.  That is, it’s price changes a lot with demand, especially when the supply of the feedstock is tiny , teeny weeny, itty bitty, compared to the finished product it is displacing.  I.e., if all 12 billion bushels of corn were manufactured into ethanol it would displace four percent (4%) of our petroleum demand!  This is like feeding hogs fois gras so we can reduce our dependence on foreign lard. 

Here is what is going to happen as a result of federal government brilliance pushing this renewable “clean” source of energy – I would say write it down and save it, but I’m doing that for you – the continued easy money, potentially devastating inflation (see Playing with Fire), and massive upward pressure on corn prices is going to ravage the ethanol industry.  It doesn’t take a genius to see this is going to happen, but apparently it takes somebody smarter than a U.S. Senator. 

Meanwhile, most people don’t realize it, but these completely government-induced artificial demands on commodities and resultant high prices are driving farmland prices to the stratosphere.  An acre of decent farmland in Iowa fetches $8,000 and in some places considerably higher.  Say hello to the same wild-eyed crazy speculation we had in the housing market two or three years ago.  Only this is a lot wilder, and the hangover?  It’s too serious to joke about.

The government’s intrusion into renewable fuels is going to bankrupt the ethanol industry.  Once that happens, the house of cards crashes along with grain prices.  Land prices will crash, and like the housing market, there will be a massive farm-country crisis that will make the mid-1980s crisis look like the failure of an eight-year old’s corner lemonade stand.  Land prices will plummet below the principal on outstanding loans, much more so than homes.  I estimate that land prices will crash by about two thirds or maybe only by half if we’re lucky, to somewhere near $3,000 per acre.  When will this happen? I would say for sure in the next 10 years, probably in the next 5 years. 

In a bitter case of irony, government “assistance” for states like Iowa is going to devastate the state.  Thank you Chuck Grassley and Tom Harkin, and here goes any shred of credibility I would give Newt Gingrich  (I actually wrote this whole thing before this last salvo went to press). 

And on the way to this pandemonium, livestock growers are going to go broke on exorbitantly priced feed.  Some already have per the above WSJ opinion piece.  We’re all paying for soaring food prices but food prices don’t matter to the Ben Bernanke.  It’s not part of “core inflation”, as though nobody eats! 

After the bomb hits, all kinds of suppliers of farm equipment, goods and services are going to get whacked and there will be a swath of bankruptcies again, making 1984 (the year) seem like Little House on the Prairie.  One “solution”, god forbid, is to throw more money at ethanol subsidies.  What’s it going to take? – $2/gallon of federal subsidy?  Is this the kind of “investment” we’re talking about? 

So think about it.  Do you really want the brilliant federal government driving us toward another cliff in renewable energy?  I can’t think of a more devastating outcome than will happen with ethanol, but then I also couldn’t think of a crazy scenario of how saving energy results in greater consumption in “Upside Down Consequence of EE” but then within a week in “The Delectable Light Bulb” a bizarre real example dropped in my lap.  The next government renewable energy drive may not be devastating, but I guarantee it will be a failure by any reasonable measure.  Has the federal government driven the breakthroughs in lighting and other technologies?  Not that I’m aware of.  The private sector has.  What happened to the Bush’s great government hydrogen solution for transportation? – and fuel cells cars?  How about the synthetic fuel godsend from the Carter days?  That was a winner, to be sure.

Renewable energy IS NOT like the development of space exploration leading to satellites for national defense then phones, TV, and GPS – or nuclear power.  In these cases, the features and requirements of the end product were well defined.  It was just a matter of physics and engineering to make it happen.  All known renewable energy today has significant physical barriers to success – like there are only so many acres of tillable soil on the continent.  The yet unknown successful, cost-effective, and plentiful source of renewable energy may be percolating in a lab somewhere or may only be a wild idea in someone’s mind or not even that yet.  I don’t know what it will be, but we aren’t going to ride solar and wind energy to the renewable sunset.

Feds – just defend us from enemies, foreign and domestic, and provide equal opportunity for all.  We will take care of the rest.  And, funny how things like satellites, GPS, internet, lasers, compact discs, DVDs, sonar, and stuff like that are spin offs of what the government is supposed to be doing – protecting us from enemies!

Tidbits

In reply to “Amber Waves of Ethanol” from The Wall Street Journal above, the CEO of the Renewable Fuels Association, (lobby) states there is no food-ethanol trade off.  Forty percent of the nation’s corn crop going through ethanol plants is no tradeoff?  Nevermind.  Put down your emotions and think about what he says.  The supply of crops (production) hasn’t changed and “remember, farmers in the U.S. see less than 20 cents on every dollar spent on food.”  What does either of these have to do with pouring 40% of the corn crop down the ethanol hole or changing supply or farmer’s share of the take?  In fact, it actually bolsters the fact that supply isn’t changing while demand is rising and will continue to do so.  You have to be smarter than that, man. 

Lastly, I want to make it clear I am not ranting against the ethanol industry.  As I’ve said before, everyone has to play the game by the rules government puts on us.  However, once this bust happens, everyone involved should have to live with the consequences without bailout.  People need to take responsibility for their own decisions.  I chose not to pursue government ARRA handouts because I considered the red tape, competition for the money, types of clients that would use it, and that it’s a one-time deal, would make for a miserable ROI for us.  If others want to land the money, and then hire us, I may consider it. 

All is not lost for farmers and ethanol-plant owners.  Sell!  Farmers can sell their obscenely overpriced land and lease it back with long term contracts.  When prices crash, take it off the hands of the sucker that bought it from you – at that point it will probably be the bank, but the bank will also be broke – maybe you can take it from bankruptcy court.

P.S.  ACEEE wasn’t fond of the President’s omission of energy efficiency either

written by Jeffrey L. Ihnen, P.E., LEED AP




Porcupine or Super Bowl, I Doubt It

4 01 2011

Although it’s a bit like the chicken and egg, my most important task is recruiting and retaining top talent.  We have a machine in place to land top talent from college campuses.  I’m quite convinced of that.  But with the sort of growth we are undergoing, we also need to recruit staff, primarily engineers at this point, with substantial experience and expertise in energy-using systems.  This would be easy if there were engineers in the market with 5-10 years experience like guys we have in that range.  It isn’t the case.

I work extensively with a recruiter and I provide constant feedback on candidates she forwards to help her better understand what we are looking for.  I’ve also written rambling explanations of what we are looking for.  Sometimes I get concerned that she thinks we are impossible to satisfy.  Well, we are almost impossible to satisfy.

First, a mini rant on recruiters.  I’ve been told by probably three recruiters that they, unlike their competition, will thoroughly vet candidates, ensure they meet our every qualification and then after a few weeks they will present a miracle list of 4-5 candidates all of whom we would just love to have on staff.  They would be so good, we might take two – even if we only need one and then we would be crying because we’d have to turn the other three down.  Fuggedabahdit!  The recruiter’s selling point is that they are supposed to save me time by not having to wade through a few dozen candidates.  Bull.  All this miracle recruiting service does is delay the process because the dream team they present to me has no more usable talent on average than 50 people a neophyte recruiter fresh out of college could find for us.  Give me the 50.

Back to my recruiting exploits; last week I was writing up a two column table for our recruiter, with one column describing what we want and the other what we want to avoid.  In the “don’t bother” column I essentially concluded we don’t want anyone from the competition, which generally speaking is where one should first look.  I’m talking about competition in the energy efficiency program business.

Why is this?  Quite frankly, because the engineering on average in this industry is poor, but it is also poor to a large extent in the systems design industry.  On the other hand, at least in the design industry, things have to be made to somehow work.  They may work like crap and waste energy up the wazoo but at least there is a required problem “solving” element.  In the EE sector, engineers can operate in a parallel universe their entire career – which brings to mind the myth of experience, a topic of another rant.

How do I know the engineering in the EE industry is poor?  Because we do a lot of program evaluation across the country, from east coast to great lakes to the west coast and beyond  – close to 20 utilities in about a dozen states.  Even stuff that a sociologist should be able to pull off is screwed up – like verifying a variable freq drive has auto controls installed, or knowing the difference between a heat recovery wheel for fresh air and a heat recovery wheel for dehumidification unit installed (unit is a god-awful pick for a northern climate anyway – design engineer should be fined, maybe spend a couple nights in jail too).  The latter resulted in a massive incentive for gas savings in a new construction program.  Uh, ouch!

So what sort of experienced people are we looking for?  Smart engineers with high GPAs but not too much experience; generally engineers who understand how systems work, how they use energy, and how they should be controlled – really understand it.  In general, best candidates come from smaller firms where they have interaction with the guy at the top and mentoring by people who know what they are doing.  On the flip side, competition sets up offices in states where they start running programs and they hire “experienced” engineers to work in those branch offices.  All I’ll say is it’s not worth looking at these candidates.  It’s probably as hard as finding a porcupine in my woods – I did experience a real live (and real big!) porcupine in the wild here in cheesehead land so although not impossible I’m not sure whether I’ll see another one or see the ViQueenies win a super bowl in my lifetime.

Why not too experienced?  Because engineers are either good or crappy and if they are good, they care about what their clients think and after being taken to the woodshed a few times for things the client doesn’t like they become calloused cynical curmudgeons unwilling to bend or change.  They play it safe.  This is typically not conducive to saving energy.  Let me know if you need an explanation as to why experienced but crappy engineers are no good.

To be sure, there are definitely excellent engineers in the industry.  We work for some of them as subs.  Others have reviewed our work for program QC and they are very good.  After throwing stones in my glass house I must break a few windows.  Admittedly, we’ve gotten comments back from outside engineering firms that make me think the guy on the other end must think we’re idiots.  However, rather than whining, crying, and denying, we get the things resolved and take long term corrective action.

written by Jeffrey L. Ihnen, P.E., LEED AP





Cool Milk, Raisin Bran, and I’m Fine

23 11 2010

I stay in hotels/motels probably 40-50 nights per year, at least it seems so.  If lodging facilities were in a league of teams competing to be the greenest facilities, these guys would be the Detroit Lions.

Most franchise motels, those not located in downtown high rise buildings, are built with the cheapest, crappiest stuff possible.  The only thing that is decent in them is the TV but sometimes even that is a junky 19 inch CRT clunker.  Who has spent a night in room with through-wall air conditioner/heater with a temperature control knob that spins round and round like the fake knobs on a Fisher Price toy for a 2 year old?  They fit as tight as clown pants and leak like a small fishing boat with a cannon ball hole in the hull.

At least they’ve gotten rid of the “Styrofoam” comforters that were once ubiquitous lodging fixtures.  I believe Styrofoam comforters were made of some sort of synthetic material and I think they may have been fireproof, like children’s fireproof pajamas.  (do they still make those things?)  Anyway, they could probably survive in a steel melting furnace.  They were scratchy and stiff like snuggling up under a cozy hunk of cardboard or yesterday’s newspaper at best.

Ventilation and exhaust in most lodging facilities are terrible.  A year ago I stayed in an older hotel in suburban Chicago.  They had the room temperature set way back to 55F and this was mid-January, about 15F outside.  Good thing?  NO!  I turned it up to around 70F.  I worked on my computer in the room for a couple hours before our client/colleague arrived from O’Hare for dinner.  In two hours the room struggled to get to 65F.  I never took my coat off in that time.  Why was this happening?  Exhaust fans somewhere, kitchen or swimming pool were sucking the building negative, big time, as I noticed with the blast of incoming wind when I entered the building.  So these guys probably thought they were saving energy by setting back room temperatures but instead, they were heating their makeup air coming in through the cheesecloth walls with crappy guest room electric resistance heaters, rather than much less expensive natural gas that they probably had somewhere on the rooftops.  At the same time they were freezing their guests.  This is the polar opposite of the Iowa State University removal of kitchen trays.  They are wasting energy like crazy and shooting their feet with terribly uncomfortable guest rooms.

Later last winter I stayed in a motel in Phoenix.  Ironically, this place was suffering from moisture problems.  The bathrooms had no exhaust whatsoever.  After a reasonable shower there is a stagnant fog bank until the door is opened.  The fog condenses on the cooler room surfaces.   The metal stuff around the ceiling was discolored by rust and the wallpaper was sagging and also discolored.  So let’s take a space that has plenty of cooling load, in Phoenix, and add a bunch of latent (moisture) dehumidification on top of that, and rot the bathroom to rubble at the same time.

In a motel in near the Minneapolis airport, they lacked ventilation/exhaust.  Entering the building, it smelled like a high school football locker room in August.  Again, I’m sure somebody thinks their saving energy while they are driving customers away with their raunchy environment.

Some lodging facilities still use incandescent light bulbs and there doesn’t seem to be a correlation with lighting type and facility age, nightly rates, or facility size.  Needless to say, these places deserve to go out of business because if there is one easy thing to do to save energy in a lodging facility with no adverse effects…

Another thing that always cracks me up is the location of ice and vending machines – typically in a small almost enclosed space.  The ice machine is hammering away as it bathes in its own waste heat at about 100F that hangs around like a cloud.  The soda machine and ice maker are working overtime to keep their contents cold with excessive heat gain in 100F heat while their compressors are working harder with higher condensing pressure.  Then there are those stupid ice machines that dump a pound of ice into an acrylic hopper thingy that dumps into your ice bucket.  The ice sits there and mostly melts before the next guest comes by.  They empty what’s left and need more.  Push the button for more ice and it dumps about 3 pounds into the hopper again.  They only need a handful so they either take 3 pounds or leave it there to melt – melt in the room or melt in the 100F cloud – take your pick.

With the bucket of ice in hand, go back to the room and take a crappy tiny plastic glass out of the crappy plastic liner.  It holds about a thimble’s worth of fluid.  You almost have to bite the ice cubes in half to fit them in the glass.  Nothing shouts cheap and crappy louder than these plastic thimbles.  A nice glass tumbler is probably worth paying at least $5 more per night.

And then there is breakfast which runs from reasonably sustainable to pornographically wasteful.  I’m very easy to please for breakfast, like Jeff Spicoli in Fast Times and Ridgemont High, “All I need are some tasty waves, cool buzz, and I’m fine.”  All I need is some cool milk, raisin bran and I’m fine.  Last week’s raisin bran feast featured two of those tiny jokes for boxes of cereal, a half pint carton of milk, plastic bowl and spoon.  I eat a tiny simple meal and have more garbage than I can carry in two hands to the waste bin.  What’s wrong with a big dispenser of bulk cereal, some porcelain bowls, metal silverware, and bulk milk?  What would that be, like 95% less landfill waste?  Bulk cereal and milk must cost about ¼ of the hokey kiddy boxes and cartons.  Somebody is short a few cards of a full deck.

Towels.  I think every motel/hotel features reuse of towels with a cheesy door hanger thingy with a white owl on it.  Help us save the planet (while we commit every environmental sin in the green bible).  It says simply hang your towel up rather than throwing it on the floor in heap if you want to reuse it.  I have found this to be more challenging than changing a tire with my bare hands.  The housecleaners take it no matter where I put it.  You almost have to hide it between the mattress and box spring but you would have to remove the mattress and lay it perfectly flat or they would notice the lump and take it.

I think the most sustainable motel I’ve stayed in was in Monterey (CA) last summer.  My room had no air conditioning.  Actually, I didn’t need cooling all week in mid-August so this was actually a pretty smart thing.  The room also had all CFL lighting of course and the bathroom had wall-mounted occupancy sensors – impressive!  Breakfast featured bulk everything, and no disposable dishes or utensils.  But no raisin bran!

Tidbits

I was pointed to this video on YouTube by a reader, regarding Playing With Fire.  A bit humorous, but scary.

And by the way, not only is this gamble risky and won’t work, it already isn’t working.  Interest rates have gone up since this was announced – the opposite of what was supposed to happen.  Could it be that people aren’t rats after all?  Supply and demand – when markets move in the opposite direction the puppet master would like, you know which is going to be right.

written by Jeffrey L. Ihnen, P.E., LEED AP





Dermal Beauty but Ugly to the Bone

19 01 2010

Attending a training session for steam systems a few years back, the class collectively chuckled as the instructor explained why he couldn’t go to the supermarket with his wife anymore.  As they would walk down the aisles he would be explaining how steam is used to make this and that.  See those potato chips, steam is used to peal potatoes rapidly and cleanly – and then he would launch into detail only a thermodynamics class would welcome.  Cheeseballs: puffed up by steam.  Carrot sticks: pealed using steam.  Chocolate milk powder: chocolate adhered to sugar using steam.  Aaaaaah!  Shut up already!  I don’t care how my Cocoa Puffs are made.  (I actually found it to be interesting)

We energy geeks have similar proclivities.  We can’t enter a building without a surface audit:

  • Jeez, these guys are living in the 1970s with T12 fluorescent lighting.
  • I bet there’s no makeup air unit for the pool in this hotel.  I can barely get the door open.  No wonder my room is absolutely freezing.  They probably think they’re saving energy besides.
  • These refrigerated door heaters are running in the middle of winter.  Typical.
  • It’s absolutely roasting in this gymnasium.  Their economizer has definitely been disabled.
  • Every light in that office building is on at 10:00 PM.  I’ll bet the cleaning guys come in and flip them all on for their entire 8 hour shift.

Last week I was reviewing American School & University’s “Architectural Portfolio 2009”, a compilation architectural masterpieces, submitted by architects and voted on by a panel of architects and facility managers to “win”, I’m not sure what.  I didn’t care.  Without even experiencing these buildings in the flesh, I found the following to be true:

  • I counted 92 spaces among these dozens of buildings that had not-so-good to very attractive daylighting designs.  The problem; 80 of them were shown with the lights on.
  • The lights were on in some spaces being scorched with direct sunlight.
  • Some entries advertised daylighting as a green feature… with the lights on!
  • One advertised as having exposed structure, e.g., trusses like you’ve seen in about 100,000 other buildings – to reduce finishing materials.  LOL
  • A gym had a great clerestory natural lighting design with fluorescent lighting – all of them burning of course.
  • One featured Low-e glazing.  Now there’s some spacey technology.

You may be thinking, the lights are on just for the photo shoot.  If that’s the case, then why are a dozen or so great photos of daylit spaces with no artificial lighting used?

These daylighting design failures or malfunctions are symbolic and symptomatic of energy efficiency in new buildings.  They are efficient on the surface only, to the untrained eye.  Once you start to dig into the heating and cooling systems, you’ll really start to see waste on a massive scale – across the board in all new buildings?  Probably not, but let me say this: we have been benchmarking buildings the last couple years and new buildings are notorious hogs.

Sadly, a substantial barrier to getting these buildings fixed up is somebody’s ego or “turf”.  That’ll be the subject of another rant but in the meantime if you think your new building (less than 10 years old) is a pig, do some benchmarking to compare it to similar buildings.

On a separate note, I found the controversy over LED traffic lights not working in snowstorms to be a bit amusing.  I see somebody in Colorado has developed a solution – something like a tube to prevent the snow from splatting on the LED surface completely covering the light.  I have another solution: hang a sign that says, “When traffic signal is covered in snow, stop, use your brain, and proceed with caution”.  Snow has plastered road signs for decades.  I’ve never heard of anyone complaining about their complete ignorance and inability to function without road signs – even critical ones like no passing or WRONG WAY – DO NOT ENTER signs.

written by Jeffrey L. Ihnen, P.E., LEED AP