Pregnant Snake Armpits

1 03 2011

Although I don’t appreciate talking about it, we have a black list of companies and organizations for which we will not again partner with, work with, or bid their request for proposals.  What type of activities land somebody on this list?

Companies or organizations that take our business development efforts and give it to someone else.

We are working on retro-commissioning for a major player in the Midwest grocery market.  As with most of our investment-grade studies for energy retrofit or retro-commissioning, we like to use contractors to provide us with pricing because we expect they will get the work and therefore, the pricing is going to be more accurate in addition to having accountability for the prices at implementation time.  The contractor was very reluctant to help because he was afraid he would help develop pricing and concepts and then somebody else would get the work.  I laughed out of familiarity with such shenanigans.

Unfortunately, while working on the grocer project, we were victims of just what the contractor was talking about, on a different project.  We had completed an energy study for a quasi non-profit, quasi-government outfit (Jeff, how many times do you have to get burned before you learn?) and we were moving into developing the design and provided a proposal.  We had already pretty well nailed down the scope of the project.

Inject another righteous government agency to “help” this end user.  Well, they took our developed scope of work and put out a competitive request for proposals with OUR work on it.  So now we’re faced with throwing away all the development we had already done just to be competitive with the other bidders who were handed this on a silver platter.  As I wrote last week, it’s a rainy day in hell when a government outfit takes anything but the low bid, otherwise known as the cheapest, crappiest system imaginable; one that meets only the major recognizable features, like equipment efficiency.    There are plenty of places to cut cost on the design and on the project itself.

That agency is blacklisted.

Companies that use our credentials to win a job and then dump us like a cheap date.

Last year we had “teamed” with a local architect on a LEED project for a new nearby federal facility.  I must digress for a moment.  This project was in progress when the “stimulus” was passed – you know the one that was supposed to break loose the shovel-ready projects.  If this wasn’t shovel-ready, I don’t know what was.  The plans and specifications had been lying about for year or two waiting for approval to proceed.  It drug on for months once the stimulus passed.

Come to think of it, this one too was in our hip pocket and they bid the work out again.  I’m not sure why because the design was 90% completed but I suppose some milestone had passed and federal statutes required a rebid or something.

So now that it’s competitive, once again after doing a bunch of development and front end work, we have to cut cost to beneath the cheap and crappy level.  So our client, the architect asked us to chop our down our price.  We provided a counter offer and waited.   And waited, and waited.

We already had 20 or so LEED projects under our belt compared to near zilch for the architect.  Finally, we get a hold of the scumbag, er, I mean client, and he says, oh yeah, “The good news is, we won the project.  The bad news is, you aren’t on the team.”  This is lower than a pregnant snake’s armpit.  (stolen from the aussies and modified by me).

Blacklisted.

Companies or organizations that use our proposal in attempt to beat “their” firm down in price.

This one is more difficult to nail down but let’s just say if it walks like a duck and quacks like a duck…  A large organization pursued by a bunch of consultants / contractors has been working with a provider for years and maybe they want a new or modified service, or maybe it’s just the same stuff they’ve been provided with many times.  Now they suddenly want a proposal from us.  This is either a Sarbanes Oxley corporate requirement (ok), process to actually evaluate invited bidders (ok), charade to fake a bureaucrat into thinking the chosen one was competitively selected (not ok), or a hammer to beat down the firm they know they are going to hire (not ok).  Essentially, we are wasting a bunch of our time to benefit only the buyer.  The other bidder(s) gets screwed too.

Blacklisted after a few of these – typically takes a few rounds of abuse to have this scam come into clear focus.

Wolves in sheep clothing.

Over the years we’ve been pursued by numerous companies that would like to partner with us.  It would be a marriage made in heaven.  Next step: an initial public offering on the NASDAQ!  Uh huh.  Sure.  These dirt bags just want access to our clients and for some reason, controls companies and performance contractors make up a substantial portion of this bunch.

Show me the money before I lift a finger or you are blacklisted.

A better way.

Recently a business partner stated it well, “What do we have in business and life but our reputations?”  And I always say to our company’s people, you best treat well everyone you work with in the company, our clients, and even the competition.  You never know who will one day be your client or supervisor, employee, or maybe someone you want to partner with, or get help from.

Everyone involved in business transactions should benefit – consultant, owner, utility, shareholders, and contractor.  Clearly and unfortunately, some entities think they can get ahead while screwing others and thinking they are getting a good deal or making extra profit.  Sooner or later these outfits run out of victims to exploit.  It shouldn’t be a fixed pie that everyone fights over.  It should be a pie from which everyone’s slice grows.

Tidbits

It appears Sacramento is contemplating the same fateful robbery of EE program dollars by hocking the stream of energy efficiency money.   In WI, this grab actually happened and crippled programs.  Ironically, or maybe not so, they would be both carried out under Democrat governors.

Outrage of the Week

Maybe I should start an outrage of the week?  Well here is the inaugural.  The DOE is calling it “Market-Driven Solutions” to work with behemoths like Target and Wal-Mart to develop new efficient rooftop heating and cooling units.  Is this the same Wal-Mart with $420 billion worldwide sales and $14.4 billion in annual earnings?  Chu, you have got to be kidding me.

Like General Electric, why doesn’t Wal-Mart get back to what they used to do well; innovate, rather than going to Washington with its hand out.  Time to put a “strong sell” on Wal-Mart stock.  They’re washed up.

This is a free market solution: an RFP for manufacturers of rooftop units to develop units that meet Wal-Mart’s specifications, reliably, and supply them with heating and cooling equipment for the next 100 stores.  After 100 stores, the incumbent has a huge advantage for (hopefully) proven success.

A portion of the $1.6 trillion, or as I like to say $1.6 million million, deficit is funding this kind of crap.  This wouldn’t be funny even if it weren’t true.

Oxymoron of the week: “DOE facilitates market-driven solutions”.

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





Green Jacket, Cigar, Gold Rings, and Disneyland

18 01 2011

I attended the Midwest Energy Efficiency Alliance last week and it was an interesting environment, to say the least.  This was the 4th or 5th MEEA conference I have attended. 

Behavioral stuff is an up and coming topic/issue in the EE industry.  I am planning to do a rant that to save energy, people have to give a crap.  I just need something to push me over the edge.  After all, just about all lasting energy efficiency requires behavioral changes.  Only inanimate, stationary, non-energy consuming stuff, e.g., insulation, doesn’t require behavior change.  Everything else has a behavioral component for maintenance, avoiding rebound and things like that.

What was probably most interesting to me was the political environment addressed by speakers at the conference.  For whatever reason, MEEA likes to attract people from Washington DC to discuss current events.  Essentially, people from the Department of Energy, Alliance to Save Energy, and Center for American Progress, to name a few, are on the defensive with the congressional wipeout last fall.  The theme I absorbed was one of playing defense and riding out this storm.  The mood for some was as though their dog had just left them and passed on to k9 heaven. 

One speaker was afraid of the jobs that were going to be lost but also threw wild numbers around – like the energy efficiency portion of the stimulus produced $50 billion in economic activity and that the regulation put in place and on auto pilot will produce billions of baskets of bread from the heavens in the next couple years. 

Energy efficiency is not like giving a child an immunization.  I’m a member of Rotary International and one of Rotary’s missions is to end polio worldwide.  We were down to just a few very poor and politically repressed countries like Afghanistan and Sudan, but like anything, completely eliminating something is very difficult.  Anyway, I’ve seen many photos of children bawling their eyes out as volunteers dripped immunization in their mouth.  This may seem unpleasant to the tikes but it is obviously in their favor and has a practically infinite benefit/cost ratio. 

Conversely, we can’t ram energy efficiency down peoples’ throats.  How many times do I have to say it?  The price of ramming things down American’s throats: 63 house seats, 6 senate seats, 5 net governorships with a near sweep in the Midwest, and a tidal wave of state house flips.  Here’s how regulations work: increase the cost of doing business and businesses move out of the state or overseas and then they get blasted for being Benedict Arnolds by the very folks who impose the regulations. 

Like light bulbs I discussed last week, energy efficiency is gathering really positive momentum, not because of top down regulation, but because it’s good for business.  See Save Energy – Get Out of Jail where Wal-Mart used “green” to get thousands of critics off its back.  They in turn are requiring energy efficiency standards for their suppliers.  I just red about Holcim cement getting ENERGY STAR® ratings on five of their plants.  I can’t speak with certainty but I don’t think they are taking the time and expense to get ENERGY STAR to pump up their four-wheel-driven employees.  They are obviously doing it for marketing.

And the DOE person was concerned about the jobs that will be lost once the stimulus is gone.  What jobs?  I’ve never lived through such a bizarre two years in my life and I’ve been in business for 20 years – eewe, old codger, I am.  It’s been crazy.  Talk about modifying behavior.  Millions of people purchasing vehicles a few months before they otherwise would, leaving in its wake a predictable buying vacuum – how many jobs did that create?  I don’t know, but I just read that Ford is planning to bring on 7,000 workers about 17 months after the cash for clunkers fiasco.  The $8,000 first-time home buyer credit – same thing.  The housing market is still searching for a bottom.  Just let it bomb and let’s get on with the recovery.  With regard to EE, probably hundreds of millions of dollars have been spent pursuing federal grants.  Enormous efforts have been expended trying to get free money.  This, my friends, is not stimulative.  It’s fighting over other people’s money to be repaid sometime in the future by said people.  This too as with my rant last week was a bipartisan bad idea started by Bush. 

Meanwhile, our industry is booming but the DOE speaker doesn’t know this because she lives in the beltway bubble.  The downturn only hit our new construction and LEED services.  Our other EE services have more than made up for it and we have four engineering spots to fill but we can’t find qualified people.  How bizarre is this?!  I think I mentioned we had an outstanding candidate we spent no time giving an offer to but she already had two other offers and took one closer to the spouse’s job.  Our usual evaluation teams have had to sit out requests for proposals because some couldn’t handle the work they already had in the tank.  We’re passing on RFPs as well.  So jeezo woman, when the stimulus goes away we’ll still be working hard to find people – as will be many others in this industry.

Back to the MEEA conference:  After a series of “Oh woe is me” talks, one guy in the crowd walked up to the mic to make a suggestion.  Rather than duking it out over regulation and climate change policy, why don’t we focus on the irrefutable common benefits that everyone can buy into – that EE is cost effective and is good for business.  Give that man a standing O, a green jacket, cigar, bottle of milk, gold rings, a trophy and a trip to Disneyland.  THIS is what we ought to be doing, not battling it out over something people rank 19th out of the most critical issues of the day and something half the population opposes. 

Tidbits

Speaking of jobs… Note to wonks trying to “create” or “focus on” jobs:  People invest and are in business to make money; period.  They are not in business to hire people.  People are hired as necessary to make more money.  Think about that.  If the bureaucrats want more jobs, let people and companies make more money. 

And speaking of sole purpose of business is making money…  In New Years Collage I chronicled a three way fight The Wall Street Journal, several utility CEOs and the EPA were having.  Among the CEOs cheering the EPA’s increase in emissions regulation was Exelon Corporation’s John Rowe.  I was eating lunch at MEEA next to a long-time Chicagoan familiar with Mr. Rowe’s strategy for Exelon (parent of ComEd, which serves Chicago).  The gentleman said Mr. Rowe sold off all of Exelon’s coal generation, leaving it with only nuclear plants.  He said the nuclear plants had among the highest operating costs in the country, which left Exelon with a high operating cost, which had to be made up by higher rates.  The gentleman explained how Mr. Rowe brought on a former Naval Nuclear engineer (Yeah!  Go Navy!) to improve the “efficiency” of the nuclear fleet.  And so he turned them around overnight.  As a result Exelon has virtually no coal generation, very efficient nuclear plants, and the highest return on capital of any utility in the business.  As I mentioned above and in several other rants, CEOs report to shareholders.  Shareholders rule.  Profit is king.  I have no problem with any of this except, I think lobbying for government to regulate a competitive advantage for yourself is not something I would do.  Preparing for and reacting to policy, good or bad policy, is fine, and indeed smart business to me.  Otherwise you might find yourself on a street corner with a tin cup. 

BTW, this was not a wild eyed ideologue I was enjoying lunch with, but I did check the facts and what he told me was pretty well right in line with an article by Forbes magazine

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





A Frivolous Novelty

20 07 2010

For this week’s publication, I was trying to think of an expensive, short-lived, duplicative, inconvenient, limited use, frivolous novelty.  Did I mention expensive?  After a half-hour of wonderment, the best I could do is a Homer Simpson bottle opener.   But really the Homer Simpson bottle opener will last longer and at least be useful (note, I didn’t say serve it’s purpose, which is to make people laugh) probably for a far longer period than the electric car.

Twenty years ago “they” were talking about developing electric cars, I guess to save us from carbon dioxide, but I don’t recall the CO2 debate being as intense then as it is now.  I recall arguing with my roommate, who was a perfect match for me (we shared best men duties at each other’s weddings), that the electric car is a stupid idea because once again our friend Pesky Reality will not allow this bad idea to ever go mainstream.  You know, Pesky is going to be our imaginary friend from now on.  I’ve never had one actually so we will see how this goes.

I already have a 20 year winning streak, but “they” are making another futile run at this doomed idea.  Of course this is being served up by the connoisseurs of bad ideas.  The factory of remedies that are worse than the disease: Washington DC.

GW Bush’s dopey idea for the next miracle of personal transportation was the fuel cell.  The only emission would be water vapor – egads! The number one greenhouse gas.  Maybe the next time this stupid idea comes back to life Pesky can start a campaign advertising the greenhouse gas thing and it will crash and burn faster the Hindenburg.   Hmmm.  Hindenburg.  Hydrogen.  Bad idea.  Crashing.  Seventy years later here we are again!  I would call that an overt, as opposed to a subliminal message from Hephaestus, the god of fire.

I’ll just mention a few of Pesky’s problems with the fuel cell.  First consider the fuel, hydrogen.  Where does it come from? Where can I buy it?  How do I store it?  How is transported?  What is the driving range on a full tank?  Answers: splitting the water molecule with electricity (?), ?, ?, ?, and 36 feet.  So there it is.  You can’t mine or drill for hydrogen.  Well, I guess you can, but just not successfully.  As I recall, from what was it, 9th grade chemistry, it is the first element on the periodic table and a mole of any gas takes the space of roughly 1 cubic foot.  In other words, this is an extremely sparse gas and fuel source.  Liquid hydrogen?  Sure, at about minus 270C.  I just pulled that number out of the air but trust me, you won’t be able to make -270C with some standard plumbing pieces parts and household chemicals from Home Depot and Wal-Mart.

Back to the electric car.  I am aware of the Nissan Leaf, Chevrolet Volt, and Tesla something or other.  The first two have a driving range of 100 miles.  The Tesla has a more conventional driving range of 300-400 miles.  Price tag: about $100,000.  The Leaf and Volt can be had for a song: $40,000.

Yeah, yeah, yeah.  As soon as someone is able to push Pesky aside and develop a long range battery that weighs less than the sculpture of Abe Lincoln in his monument on the national mall, we’ll be home free.  I don’t think so.

The fuel source for electric cars is widely distributed and you can get it pretty much anywhere.  However, Pesky requires a rectifier and transformer to turn AC current delivered over the power lines to DC and then step the voltage down or something like that to “fill” the battery.  Price tag: $2,000.   Ok. Maybe you can buy one of these things and use it until the next ice age.  But it takes 8 HOURS to charge the batteries.  It takes 3 minutes to fill the tank with gasoline.  One hundred miles in 8 hours: 12.5 miles per hour of filling.  Gasoline: 340 miles in 0.05 hour: 6,800 miles per hour.  If I remember correctly, that is roughly Mach 10.  This is like making 30-year aged, single-malt scotch compared to thawing, or as my wife calls it “de-thawing”, a bagel in the microwave.  What happens if you forget to plug in when you get home at night?  Call in to work dead? As in dead battery?

Where are you going to charge once you leave the home-base 30 mile radius?  Who is going to install all $2,000 charging stations for you?  It will be like the Amish when they all get together for their Sunday services.  All the buggies are parked in the yard while the dozens of horses that pulled them there are packed in a shed munching hay, drinking water and lying about for 8 hours.  They are recharging their batteries, man.  That’s beautiful but is the modern American going to put up with 12.5 miles per hour of charging time?  Does anyone root for both the Vikings AND the Packers?  (If so, he/she should be locked up)

Assume engineers are able to speed up the process.  Charge time will still be constrained by the electric “pipes” coming to your home.  An electric water heater or clothes dryer probably pull the greatest demand in a typical house.  The water heater input is limited to 4.5 kW, equivalent of about 6 horsepower.  My lawnmower has at least 3x as much power.  See why it takes such a long time to charge, and it’s not ever going to change without a bazillion dollar modification to the electric grid?

And then there is this little problem:  You probably haven’t thought of it this way but your gasoline-powered automobile is a little and very efficient combined heat and power plant.  That’s right.  I’m going to guess a car is about 20% efficient with maybe 10% burned up in friction and the other 70% dumping heat out the radiator, just like a power plant.  Everyone north of the Florida panhandle needs heat and even if you don’t mind wearing a snow suit and big furry hood, you won’t be able to see where you are going with out lots of heat to keep the windows defrosted or defogged.

Well how much heat does it take?  When I first drove my little (2002) Honda Civic to work in -20F weather, as I coasted down the “big hill” (at least a mile long, maybe 500 feet vertical), the water temperature gage went from “50%” to about “20%”.  I thought crap, the thermostat is probably stuck.  No.  The heater just sucked all waste heat out of the engine while it wasn’t “working” in about 70 seconds.  Where is that kind of heat in an electric car coming from? – from the battery.  But the gas car has 70% of its energy consumption available for space heat.  Once the same heat is extracted from the Abe Lincoln battery, you’re hundred mile range is now down to about 30 miles.  Well guess what the average commute distance is in the U.S., Pesky.  Its 16 miles, 32 round trip.  I guess that car is good for a drive to the convenience store for milk and bread, but just make sure it’s fully charged so you can make it back up the hill.

Recently, Obama has been doing photo ops at an electric delivery truck factory in MO and a battery factory for electric cars in MI, neither of which would be a shadow of themselves without hundreds of millions of free money from the “stimulus”.  I don’t give investment advice but if I were an investment advisor, I would put a strong sell on these stocks.  Then I would short them.  I would buy put options.  If I worked at these places, I would be looking for another job.  The government gave these guys a big push to get going but there is no engine under the hood.

I never like to just thrash things and leave it be without offering alternatives.  Sooner or later we will have no choice but to use alternate fuel sources.  There is no infinite source of oil, although there is probably a 200 year supply if we decided to remove restrictions and technologies allow us to extract oil in more extreme places.  Remember, in the late 1970s we were on the verge of running out of natural gas.  Forty years (40) hence we have a bigger glut of natural gas than ever.

Like efficiency in buildings, in the short term we can make huge gains with existing “technologies” – have heat, have a driving range limited by the driver, and refuel in three minutes every four hours.  In the long term, the alternate fuel source will be in liquid form.  Sources may be algae, wood, (not corn ethanol), garbage or other waste material like dog hair.  I have a bottomless and continuous supply of free dog hair.

Unless something riles me up more in the next week, I will discuss the interim.  Pesky will have the week off because he will have no say in these matters.

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





The Nebulous Green Job

13 07 2010

“Green jobs” have been all the buzz for quite some time, probably before Barack Obama was elected president, but I don’t know for sure.  What the heck is a green job anyway?  Some real answers include those like we have at Michaels Engineering with 20+ engineers working full time on real energy-saving projects.  Another example is the guy who operates the humongous crane that helps erect humongous wind turbines.

But politicians and academic eggheads aren’t talking about jobs like we have at Michaels, although they probably do agree the crane driver has a green job, but it goes far beyond that to Alice’s wonderland.  Take this Mark Izeman guy’s interview.   I’ll paraphrase the questions and answers for brevity here.

Q:  What should graduates look for by way of green jobs?

A:  Look into areas of energy efficiency, renewable, cap and trade, and local food, which is a red hot issue.

These are shot gun recommendations for everyone leaving college with cap and gown stuffed in a suit case: physical education, political science, sociology, library science, foreign relations, mass communication majors included.  Quite frankly, I don’t know what people with these sorts of academic backgrounds are going to do unless they want to weld and assemble wind turbines and electric cars.  Otherwise, there are always more PR jobs like the guy being interviewed in the article, but what good does that do?  It’s like hiring cheerleaders to double as special teams experts in the NFL.  What we need is more players and fewer cheerleaders (strictly speaking about the “green jobs” industry and not the NFL).

And then he says buying local food.  What are you going to do with that?  Start your own vegetable farm?  I think there is a lot of cheap land available in Detroit for this.  There are more jobs available working for Dole, which grow strawberries in CA, bananas from Guatemala or Ecuador or someplace like that.  I’m sure there are a lot of management, marketing and sales jobs and stuff like that with these companies.  Oh, I forgot.  These aren’t “green jobs”.  Never mind.

RA (real answer):  Think before selecting a college major.  With an engineering degree you will have the flexibility to fill or create any number of green jobs.  Library science guy?  Not so much, for real anyway.

Q:  Has the stimulus created “green jobs”?

A:  Fifty thousand “green jobs” have been saved or created.

Can we count the 20 plus engineering jobs we “saved” in this total?  Why did “jobs created” morph into “jobs created or saved”?  Obviously, the latter can mean anything.  Since the 4 million jobs have disappeared while the unemployment rate has gone up (down most recently because the workforce is shrinking as people quit looking for work), it’s pretty hard to claim jobs have been created.

Fifty thousand is a pathetic number, even if it represented “created jobs” only.  Here’s a sneaky secret:  you know when you apply for a federal grant, which seems to be part of nearly everyone’s business model nowadays, one of the selection criteria is you guessed it, “jobs created or saved”.  Well my new LED street lighting job is going to create or save at least 200 jobs.  This probably gets as much scrutiny as an Energy Star dust mop.

RA:  Nobody has a clue, really.

Q:  How many “green manufacturing jobs” will replace lost manufacturing jobs?

A:  Lieberman/Kerry cap and trade will create 200,000 jobs per year over the next 10 years.

RA:  In China and India.

Q:  How do you define “green jobs” in the first place?

A:  He doesn’t know but the Bureau of Labor and Statistics is figuring it out.

Why?  A job is a job, so if my job is a green job, I guess that’s one less engineering services job.  It’s one or the other.

RA:  Whatever it takes to capture enough jobs for some political end.

Q:  What is the outlook for “green jobs” sector over the next 40 years?

A:  “Greening the economy and creating new jobs, which will become so plentiful and normal we won’t label them “green jobs”.

RA:  The outlook is good.  I don’t think this will be going away, but let’s dispose with the “green jobs” moniker, which is just political wrapping paper to pass massive spending bills.

Demand for green stuff is growing on its own.  Take LEED, which is run by a non-profit United States Green Building Council.  It has been wildly successful and as far as I know, it has taken very little if any money from federal, state, or local governments.  I don’t see a single government employee on the board of director committees.  Gee.  I wonder if there is a connection between wild success and lack of government bureaucrats??  You don’t suppose.

Wal-Mart has probably produced more “green jobs” per the definition provided in the article/interview noted above than the federal government could ever hope to accomplish.  People buy hybrid cars on their own volition.  Leading hybrid-producing car companies didn’t need any government largess to be successful in this market.  I do think they will need government handouts for development of electric vehicles which, I am guessing will go on the scrap heap of bad ideas, right on top of the fuel cell vehicles that we should have been driving by the thousands by now.  More on this later.

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