Hidden Risks, Challenges and Solutions Relating to Commercialization of Technologies for the Extractive and Utility Industries

 

Technology is helping reinvent how the energy industry approaches extraction, power generation, regulations and sustainability in its business operations. A surge in technology innovation is reflected in investment trends into innovations targeted to help the oil and gas and electric utility industries respond to increasing regulations, an increase in the number of patents relating to the extractive industries and an increased number of business models focused on technology deployment.

Integrating new technologies that can facilitate extraction, minimize environmental impact and positively impact a company’s bottom line are increasingly sought after and new business models that involve multiple stakeholder engagement can expedite the process. A Bain report highlights development of “globally competitive clusters” defined as geographic concentrations of interconnected companies, specialized suppliers, service providers and associated institutions in related sectors to increase productivity and lower the cost of doing business. In another example, national oil companies play a big role in driving technology development. Brazil’s Petrobas has developed leading-edge technology for deep-water exploration, development and production.

While technology deployment represents huge business opportunity, commercialization of technology can pose a number of legal challenges to companies in the energy industry and those that are approaching the energy industry. In particular, there are key issues that every company should be aware of, for example: (1) the consequences of public disclosure; (2) the consequences of a failure to define ownership of technology; (3) the difference between trade secret and patent protection and the impact on talent acquisition; and (4) the challenges that may arise from employee developed technology - just to name a few. Beyond the intellectual property issues, testing technology under real world conditions can raise challenges in the regulatory arena. For example, achallenge can arise when an early stage innovator asks a utility or a company in the extractive industry to modify an existing permit so that they can test technology under unique parameters. In effect, the innovator is asking the utility to put their permit or “stack” at risk, a scenario referred to as “stack risk”, and asking the utility to accept the uncertainty of the regulatory process.

It's further no surprise that access to financing is often a barrier to these emerging companies. Power generation and natural resource extraction are cost intensive industries. For some technologies, the fully deployed cost could be $200-$300 million. A number of energy related venture capital firms fund promising startup companies in energy technology, materials and related businesses. Large corporations fund some of these venture capital firms and many have created venture funds of their own. Chevron Venture Capital for example, finds and makes investments in early-stage companies offering technology valuable to Chevron, then helps Chevron business units implement that technology. Chevron Venture Capital searches for technologies that will enable Chevron to operate more efficiently, expand operations, or launch viable new businesses.

More specifically, Chevron seeks investment opportunities in four critical and broad categories, namely: the spectrum of oil and gas (including infrastructure, enhanced oil recovery and water remediation to name a few), emerging/alternative energy, advanced materials, communications and networking to support industrial and remote applications and information technologies.

Shell created Shell Technology Ventures to promote and accelerate advanced technologies and game-changing innovation. The Shell Technology Ventures team invests in companies across the energy sector to speed up the development and deployment of new technologies that they foresee will complement their business. Shell seeks to make investments in early-stage technology companies that accelerate deployment of oil and gas technologies, investments in early-stage technology companies and projects focused on future energy technologies, as well as Shell spin-off technologies.

For technology companies, the ultimate goal is to move from proof of concept to market integration. There are a number of organizations that were established to assist with market confirmation and to accelerate deployment while also often providing additional access to capital. It is also important to note that not all innovation involves new technology and sometimes the fastest solution is adaptation of existing technologies. The Oil and Gas Innovation Center was established to identify new technology ventures that might apply to the oil and gas space. The Oil and Gas Innovation Center also provides the opportunity for emerging technology to confirm with industry a need for their technology solution another critical element to commercialization.

Another organization that recognizes the importance of adaptation of existing technologies is the Research Partnership to Secure Energy for America (RPSEA), a non-profit established to cooperatively find solutions to energy production in the United States and offer funding opportunities in specific technology areas. “Their mission is: to facilitate a cooperative effort to identify and develop new methods and integrated systems for exploring, producing, and transporting-to-market energy or other derivative products from ultra-deepwater and unconventional natural gas and other petroleum resources, and to ensure that small producers continue to have access to the technical and knowledge resources necessary to continue their important contribution to energy production in the U.S.”

In summary, the energy industry presents huge opportunity for new technology ventures. It is critical however, for companies to protect their intellectual property, define ownership up-front and confirm that their solution directly comports with the identified problem.

At de la Torre Law, LLC we understand intellectual property and the energy industry. We can help you confirm opportunity and protect your interests. Contact us today to learn how.

 

 

Energy 101: Why do we need to fracture anyway?

This is the first in a series of blog postings on the Lifecycle of Oil and Natural Gas based on the certification course offered through The University of Colorado's School of Global Energy Management. 

Why do we need to fracture rock to retrieve oil and gas?

The answer lies in where oil and gas is found – sedimentary rocks.  Sedimentary rocks are rocks that comprise different sediments like pieces of other rocks, shell material, and salts.  Sandstone, limestone and shale are sedimentary rocks.  The key to sedimentary rocks is how they formed.  Over time, sediments were deposited in basins and layers of sediments built on top of each other, resulting in thick accumulations of sediments.  Tens of thousands of feet of sediments accumulated in some basins and the weight caused grains to compact, realign and break.  Compaction, combined with pressure and fluids moving through sediment deposits worked to cement in between grains to form sedimentary rock.

Although the rock is compacted and cemented together, the rock comprises sediments of different shapes that don’t fit together perfectly.  These irregular shapes create holes or pores in the rocks.  These pores house water, oil and gas.  Permeability is a measure of the rock’s capacity to move fluids through the pores.  The more porous a rock is, the easier it is to move fluid.  For example, in the photo below.

On the other hand, the smaller the pieces of the sedimentary rock, the closer these pieces can be compacted and the smaller the pores and channels for fluid removal.  Shale, for example, has tiny pores and the connections between the pores are also tiny.  Introducing open fractures, however, dramatically increases permeability.  Fractures are artificially induced in wells to increase the production rate and ultimate recovery of gas and oil from shale rock.  For example, see the picture of shale rock below.

Shale Rock

 

What types of sedimentary rocks are geologists looking for?

The two rocks of interest are reservoir rock and source rock.  Reservoir rocks have the ability to store fluid and transmit the fluid held within pores in economic volumes.  That is, these rocks are porous and permeable, for example, sandstones and carbonates.  Source rocks comprise fine grained sediments that contain organic material that can become oil and gas.  These rocks have tiny pores and low permeability, for example, shale rock. 

America's rich oil shale deposits likely hold 1.5 trillion barrels of oil, according to Jack Dyni, a geologist emeritus at the U.S. Geological Survey. According to the Rocky Mountain Energy Forum, “that amount is 4 times the proven reserves of Saudi Arabia. And, it’s greater than all 12 OPEC countries combined, which have proven reserves of about 911 billion barrels of oil.”  To put it another way, “Colorado, Utah and Wyoming have as much oil as Saudi Arabia, Iran, Iraq, Venezuela, Nigeria, Kuwait, Libya, Angola, Algeria, Indonesia, Qatar and the United Arab Emirates combined.”

Oil and gas are less dense than water so as oil and gas generates within the sedimentary rocks in the basin it moves upward through fracture and pore systems until something stops or “traps” it.  A trap is an impermeable layer of rock that surrounds a permeable rock, either vertically or laterally.  One type of trap is a structural trap.  In this mechanism, an impermeable rock seals the oil and gas trapping it so it can’t escape.  Another type of trap is a fault trap.  In this mechanism, the plates in the earth shift up or down displacing reservoir rock against impermeable rock so that the oil and gas can’t escape.  Geologists can locate these traps and drill to access the trapped oil and gas.

How did the oil and gas get there?

Although a common misconception, oil and gas does not originate from dinosaurs.  Plant matter and planktonic organisms were deposited over time in deep oceans, swamps and lakes.  These deposits are made of organic carbon molecules containing carbon and hydrogen or hydrocarbons.  Organic carbon exposed to high temperatures for a long period of time will yield oil and/or natural gas depending on the temperatures.  The type of hydrocarbon produced depends on the type of organic matter that was deposited. 

The role of the geologist, petrophysicist and geophysicist is a critical component in identifying and validating resource plays.   With technology, these experts can identify areas of potential interest and characterize the reservoirs geometry, continuity and variability.  The data collected is used to develop drilling plans and select locations.  In the next posting we’ll walk you through the process involved in identifying the next big play.  Stand by!

Image credit: www.123rf.com

Approaches to Global Resource Development with Spatial Terra and ICOSA: Addressing the Social Space

A recent report by the Canadian Energy Research Institute (CERI) entitled “Global LNG: Now, Never or Later,” predicted that “Africa could be considered a dark horse in gas production with the potential to increase production dramatically over the long-term.”  The report explains that while African producers have also had political disturbances, the International Energy Agency (IEA) expects Egypt and Algeria to increase development.  “In addition,” continues the report, “East Africa is expected to start developing gas reserves of its own and there have been indications that Nigeria and Angola may increase output as well.” 

According to the IEA, “the factors that drive natural gas demand and supply increasingly point to a future in which natural gas plays a greater role in the global energy mix.”  The CERI report, citing to the IEA’s “Golden Age of Gas report,” further highlights the role of developing countries in this expansion and explains that “global natural gas demand has increased by over 30 percent since 2001, and amounted to 113.8 TCF in 2011. By 2035, natural gas demand could exceed 180 TCF, with developing countries accounting for the vast majority of incremental natural gas demand growth.” According to the Golden Age of Gas report, “the strongest centers of growth in natural gas production are expected to be the Middle East, Russia, Caspian, North America, China and Africa.” 

While these centers of growth have yet to be defined, one thing is certain – the Golden Age of Gas presents opportunities for global resource development.  These environments, however, can be particularly challenging to companies when it comes to risk assessment and mitigation.  That’s where SpatialTerra comes in and we had the opportunity to talk to Scott Kesterson and Pete Gillette, co-founders of SpatialTerra Consulting Group, LLC, about their business model on ICOSA radio.

According to Kesterson, organizations make decisions based on traditional corporate competitive intelligence.  To mitigate risk and maximize profits, however, traditional competitive intelligence is not enough. To mitigate risk, corporations must pay attention to a community’s social dynamics.

Gillette goes on to explain that in the globalized economic, social and political spheres, all problems are local. Hyper-networked communications have outpaced even the most sophisticated government controls and corporate talking points.

“Today, any organization is but one Twitter feed away from crisis.”

 

In nearly every global flashpoint crisis in recent years, be it commercial or governmental, the core contention could be traced to social dynamics — impacts to individual and collective health, welfare, traditions, security or justice. The factors that have been dismissed as “soft science” were, in fact, the consistently and immediately identifiable drivers in events as diverse as the uprisings in Libya and labor disputes in Brazil to community pushback on the Keystone Pipeline in Nebraska and hydraulic fracturing in western Pennsylvania.

Failure to take into account consequences at the local level results in a gap between the outcomes envisioned by the organization and the actual outcomes during local implementation.   The gap highlights the unexplored understanding of the social space. This amorphous gray space poses the most complex risks to corporate ventures, both overseas and domestic.

How does this apply to the global natural gas market?  In the next several decades, companies will be entering new markets and every corporation entering an emerging market tells a story – the key is to match this narrative with the local language.

Without a grasp of the narrative and a sound exploration of the social sphere, a vast gray space emerges.  If left unbridged, the impacts to revenue and brand can be catastrophic. A quick examination of domestic hydraulic fracturing or international energy operations reveals the multitude of potentially devastating scenarios. In these and other cases, the roots of dispute lie squarely in competing narratives. Corporations have frequently failed to speak “the local language.”

Every place in the world has a distinct local culture, with traditions and values. There are common fears and desires that compel people toward or away from potential outcomes. Collectively, these become the motivations that define the community and form the local narrative.

More than language translation or historic ethnography, narrative sets the conditions for an organization seeking entry into a community. The ability to embrace and craft the evolving narrative determines whether innovative products and services gain acceptance.

Spatial Terra identifies the core motivations for the local narrative and shapes the business environment to the client’s benefit by bridging the narrative gaps that impede effective operations.

Consider the hydraulic fracturing debate.  In spite of potential benefits to the US economy and security, energy companies face significant resistance in some local areas. The scene is familiar: Concerned residents rally, emotionally citing empirical evidence to reject hydraulic fracturing outright. Energy firms dispatch world-class engineers to counter the concerns using complex technical data and use other methods to undermine local resistance.  Rather than acknowledging the public’s concerns, lowering the tone of the debate and building cooperative trust, these firms accelerate the collision.

“Fueling contention does nothing to bridge the narrative gap.”

Spatial Terra has helped shape some of the most hostile and austere environments on the planet. They believe the solutions, while not necessarily easy, are a very simple sum of component parts. They have explored the gray spaces and bridged the narrative gaps that determine the success or failure of technical innovation and strategic objectives. That outcome depends on how one tells the story. 

Join us on ICOSA’s Driving Force radio for Part I and Part II and to listen to more about how Spatial Terra is working with companies to tell their stories in a way that will mitigate risk, and maximize profits.

ScottKesterson:  CEO of Spatial TerraConsulting Group, LLC.  He is an award-winning combat videographer/filmmaker.  For the past 6-years, Kesterson has worked as a Subject Matter Expert and Consultant for the Department of Defense, US Special Operations, Department of State, and private corporations pioneering work in the areas of cultural narrative, visual education and social media program development.  He has worked in the Middle East, Afghanistan, and Europe.  A graduate of Oregon State University, he currently lives in Portland, OR.

Pete Gillette:  Founding partner at Spatial Terra Consulting Group, LLC.  He is a 16-year veteran of military and government service, with experience as an Army paratrooper, Foreign Service Officer for the Department of State and special advisor for US operations in Afghanistan and Iraq.  Pete has worked throughout the Middle East, Asia, Africa and Europe.  A graduate of the University of Colorado, he earned his Masters in foreign policy from Georgetown University. He lives and works in Washington D.C.

 

The Energy-Water Nexus: It's a Thirsty World and the Stakes Are High

“All the water that will ever be is, right now.” With this simple sentence in 1993, National Geographic summed up the challenge: How do we continue to supply 7 billion people with enough water from a finite supply and satisfy the needs of modern society with increasing population and demand?

Water and energy are the life’s blood of industrialization. These resources are inextricably intertwined and work together to quench our thirst for power. Water is integral to resource extraction, refining, processing, transportation and electric power generation. Conversely, significant amounts of energy are needed to extract, transport, treat, and use water in urban areas. The collision of these two resources is often referred to as the energy-water nexus.

 
It’s a thirsty world and the stakes are high. However, using no energy uses no water at all and consumers and businesses alike can take advantage of new technology to minimize energy use. According toSandia National Labs, “coal, the most abundant fossil fuel, currently accounts for 52% of U.S. electricity generation, and each kWh generated from coal requires withdrawal of 25 gallons of water. That means U.S. citizens may indirectly depend upon as much water turning on the lights and running appliances as they directly use taking showers and watering lawns.”

Fortunately, many new and proven critical technologies with real solutions are currently jockeying for position to strategically target market opportunities to reduce power use in the building sector. These technologies can chip away at building power consumption and improved policy could dramatically speed this process. For example, mandated efficiency targets or on-bill recovery for retrofits could transform the industry across the board.

Many of these technologies address multiple problems. For instance, SolaRover, a Colorado company, offers a rapidly deployablecritical-output mobile solar power generator system that properly configured, can deliver up to 50 kW of continuous power. These generators can be plugged directly into a facility and be used to reduce facility energy use and cost during times of peak load demand—the time when energy costs are highest. At the same time, these units reduce water use by reducing the facility’s power needs generated off-site. In the event of an emergency, like Hurricane Sandy, these mobile generators can be simply and quickly moved to where they are needed – without the need for fuel. Thus, mobile solar generators can provide a lifetime of energy and water savings.

The Green Power Resource Management multifaceted solar powered air conditioning unit can be further adapted to function as a virtual power plant can further minimize building energy use by combining PV technology with DC engineered air conditioning innovation.

More and more businesses are recognizing the potential to turn their company building, previously a pure expense, into a power generation asset that can generate abundant and clean electricity. Pythagoras Solar, a company focused on building integrated photovoltaics (BIPV), provides building owners the opportunity to achieve “ubiquitous solar” via integration of solar windows and solar skylights. The Pythagoras Solar window is a solar panel built around two panes of glass which allows it to function as both a window and an electricity generating source.

New innovations can further facilitate production of potable water without using fossil fuel powered energy to power filtration.  

Modern society is characterized by growth: Demand for energy and water is increasing while our water resource is finite. We are at a crossroads and the challenges that we need to address are daunting. Fortunately, with challenge comes opportunity and policy makers, businesses and consumers can take steps to reduce use by incentivizing a harmonized approach to energy-water planning and by incentivizing deployment and integration of technology that can reduce energy use and create a sustainable energy-water infrastructure. 

As a lead-up to Abu Dhabi Sustainability Week, January 13-17, Masdar is sponsoring a blogging contest called “Engage: The Water-Energy Nexus.” The winner will be invited to Abu Dhabi as VIP media to cover the week’s high-profile events. Please vote for me here: http://masdar.ae/en/#adsw/detail/kelly-de-la-torre-the-energy-water-nexus-its-a-thirsty-world-and-the-stakes

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Arzu Studio Hope: A Sustainable Business Model for Transformational Change

It isn’t enough to talk about peace.  One must believe in it. And it isn’t enough to believe in it.  One must work at it. – Eleanor Roosevelt

How do you lift women out of poverty in a country where women are marginalized and defined by their subordinate status?  According to Connie Duckworth, CEO of Arzu Studio Hope (Arzu), you use the tools you have available to design and build a platform for growth.    “There is dignity in work and self –reliance,” said Duckworth.  “Women are amazingly resourceful.  Women do the work of the world and are also the face of poverty.  They are peacemakers and mothers everywhere want the same things.  We want our kids to have opportunities, to be healthy and to have a future.”   

Arzu demonstrates that transformational change can happen even in the world’s most horrible places.  “Each one of us holds the power of hope and change in our hands,” continued Duckworth.  As a mentor to countless women coming up through the ranks at Goldman Sachs and an advocate for family focused policies like maternity leave, Duckworth has demonstrated a lifelong passion for women’s rights and economic sustainability.  Arzu is a reflection of that passion and with Arzu, Duckworth has created a roadmap that could be replicated to impact women globally.   “We’ve developed a successful business in Afghanistan, a conflict zone with no infrastructure, no power grid, no internet, no roads,” says Duckworth, “if we can do it there, we can do it anywhere.”

The concept is based on the mantra, “she who writes the check controls the agenda.”  Women that have an income can have a sense of independence that they would not otherwise have; with an income women gain authority.  The idea for Arzu grew out of an identified need.  Duckworth was asked to travel to Afghanistan as a business representative of the US Afghan Women’s Council, a Council created to ensure that in the restructuring of Afghanistan that women have a seat at the table.  They were the first delegation allowed to overnight in the country.  She describes it as stepping back in time 2000 years.  Kabul is a city devastated by civil war that flattened whole sections of the city.  On the way back to the airport the group stopped by a bombed out Soviet-style building and met dozens of women and children squatting for the winter with very little in the way of clothing and no heat, electricity or water.  Many, if not all, of these women were widows with no education and no way to support their children – and it is not uncommon for women in Afghanistan to have 7 or 8 children. 

Struck by these images, Duckworth knew she was going to do something to create a business to employ as many women as possible.  The challenge: start a business with no access to electricity, in a war-zone, without a shipping infrastructure or banking infrastructure.   While she did not have these things, she did have a vision.  She wanted to identify an export product that would create enough cash to fund the back end of the business including all the materials, all the social programs and provide for fair wages.

Here is where the process begins to emerge.

Step one in starting a business is to get as much information as you can.  Duckworth hired a woman at the UN to compile economic data.  One drawback was that the data was from 1975 but it still provided some framework to work from.  Afghanistan is extremely poor, extremely dry and access to water is limited – thus, no opportunity for agriculture.  To set the stage, there are really no employment opportunities for women or men.

Step two was to use this information to identify the product.  Weaving is a culturally acceptable activity for women, they can weave in their homes, and in theory the business could be started that day.    So, through trial and error, Duckworth essentially backed into high quality Afghan rugs as the target product. 

In life, success is based partly on the cards falling your way.  Bamyan Province has the first, and so far, only female governor, Habiba Sarabi.  She was appointed in 2005 and she invited Duckworth to start an enterprise in Bamyan.  Bamyan Province is home to the magical Buddha’s and translated means ‘The Place of Shining Light.’  Bamyan is one of the thirty-four provinces of Afghanistan.  According to the Regional Rural Economic Regeneration Strategies (RRERS), 

Bamyan is one of the poorest, most mountainous, and agriculturally least productive areas in the country. Much of the land is barren and inaccessible, with acute water shortages, small landholdings, extensive food insecurity, and poor soil quality characterizing much of the region. While specific communities in Bamyan have benefited from short-term relief efforts and some infrastructure improvements, substantial need for well-planned initiatives remains. 

Duckworth made the decision to start an enterprise around training and developing Afghan talent.  While still a segregated society, the company is run by two production managers: one male and one female.

Step three is to negotiate or garner the support of family and community.  To do this, Arzu went village to village and house to house negotiating with the male heads of households to create a social contract.  The deal was that in exchange for fair labor wages, the company would pay for “A” quality product and add a 50% quality bonus.  These are highly skilled and talented artisans.  Each year Arzu formally sits down with each family to negotiate and they truly understand what a job can do to transform a woman’s life and her social position in the household.

One story that Duckworth tells is that of a widowed woman weaver named Fatima.  Arzu gives priority to widows.  Before Arzu, Fatima was living in a refugee camp with her seven children.  Statistically, 25% of children in Afghanistan die by the time they are 5 years old, 95% of women will never have any medical care and Afghanistan has the second highest maternal death rate globally.  These women suffer from malnutrition and illiteracy and 85% of them suffer domestic violence.  If there is a history of being a sole wage earner, however, that woman’s respect goes up dramatically.  Fatima is now reading at a fifth grade level, supporting her family and is a shining beacon of hope for them.

Why does this model work?  Because, says Duckworth, these families are being economically incented to support the model.  “Follow the money,” says Duckworth.  “We believe that for this to work, women need to be empowered economically and also supported with an ecosystem.  You can’t just pull one end of the thread out of a ball of yarn.  You need to bring in education and promote health.” 

Part of Arzu’s success is because they consciously built an ecosystem of support that consists of three components.  First, the family must agree that the women get released to Arzu for 2 hours a day for tutoring.  One woman who realized this change in her life commented that, “reading is like a blind woman getting her eyes.”  It is amazing that things that we take for granted can make such a huge impact.  Second, the family must agree that all children in the household go to school and Arzu tracks compliance.  Third, the family must release the women for pre- and post-natal care health checks.   It is significant that since 2006 the community that lives within this ecosystem has not lost a mother or baby in childbirth in a country with one of the highest maternal death rates.   The difference is that the families have bought into the business model.  They are economically incented to do so and their success is based on their own performance. 

“If you follow the money and trace it back, you can figure out why people behave the way they do,” explained Duckworth.  For example, why do families marry their girls off at the age of 12? Economics -  the family gets money from selling the daughter to the in-laws.  If, however, we can figure out how to provide employment to teenage girls they are worth more to their families earning a consistent income.  Whenever possible, Arzu employs teenage girls for part-time jobs.  They are the teachers for the women weavers, they help in the garden.  Seventy female students are attending college.  The equation is simple: income = girls get to stay in college.     

Arzu demonstrates that if you can show someone that they can be the catalyst to set their children on the path to a better life, they will do what it takes to make that happen.  The message to us is that no change happens if you don’t start.  “It doesn’t matter what you do,” says Duckworth.  “Just start.  If each of us just did that one thing that we are capable of doing there could be a tsunami of change.”  Arzu has created between 700 and 1000 jobs in a place where there are no jobs, scarce resources, cultural challenges and overwhelming destitution.  Change happens with baby steps and celebrating small victories.  Arzu is an inspiration for promoting transformational change through sustainable business models. 

For more on Connie Duckworth’s vision and journey, listen in to ICOSA’s Driving Force radio and anyone can support by going to Peace Cord. 

 

 

 

Living Better Electrically AND Efficiently – Elevations Credit Union and the Denver Energy Challenge Team Up

It's almost unimaginable that consumers would have to be encouraged to use electricity to make their lives easier - but that's where we started.  To explain, we can look to the visionary known as the Wizard of Menlo Park, Thomas Edison.  It was Edison's vision to create a system to deliver electric light into private homes in the late 1800's and ultimately, his vision revolutionized our way of life.

During the postwar era of the 1950s and 1960s, the power industry's growth transformed America and the American way of life. The opportunities provided by electricity seemed endless.  Remarkably, in 1956, to keep demand high and increase public awareness, General Electric launched its "Live Better Electrically" campaign.  The campain, supported by 300 power utilities and 180 electrical manufacturers across the nation, was designed to extol the benefits of "better living by living electrically!"  The result was a revolution in the quality and ease of domestic life.  Consumers now had electric-powered vacuum cleaners, clothes dryers, toasters, refrigerators, televisions, raido and even air conditioned movie theaters.

Decades have passed since the “Live Better Electrically” campaign and with it remarkable changes to our energy landscape. First and foremost however, today, a campaign to encourage use is unnecessary. Indeed, our energy use has grown exponentially.  For Americans, electricity is both pervasive and essential. We love it and our appetite for it keeps growing. The average household today owns 26 electronic gadgets. Electricity consumption doubled since 1980 and is expected to grow by another 25 percent by 2030. We take for granted that when we flip a switch a light will come on and when we plug in those gadgets they will recharge.  One way to keep up with demand, however, is to reduce our energy use and luckily, we can save money and live more comfortably at the same time.  That’s the beauty of energy efficiency upgrades.  After all, the cheapest energy is the energy that we don’t use.

Gone are the days of Jimmy Carter and his red cardigan.  Welcome to a new world of efficient buildings that manage energy use and integrate new technologies to achieve huge energy savings and vastly improved comfort.  An added bonus, potentially huge money savings to the bottom line for homeowners and business owners alike.

It’s no secret that I’ve taken steps to reduce energy use in my home.  I talk about it on ICOSA Driving Force radio and on this blog.  For example, I have all of our electronics on power strips so that they can be turned off at the strip to prevent “phantom power” or the power drawn by gadgets and electronic devices when they’re switched off or not in use.  I installed a clothesline and hang our clothes to dry outside in the sun (thereby also earning the nickname of Laura Ingalls Wilder from my husband.)  I’ve installed skylight blinds for the summer months and honeycomb blinds to help insulate the windows.  As my old “Edison” light bulbs burned out I replaced them with energy efficient ones – which as I explain below should have been expedited.  But what else can you do and what if there are upfront costs?

These challenges: the upfront cost associated with energy efficiency retrofits and identification of the changes that will make the biggest impact, are two key hurdles for consumers.  Luckily, the Denver EnergyChallenge provides education, free support services through an energy advisor, along with financial assistance to residents and businesses in the City and County of Denver. 

The Denver Energy Challenge was created to expand energy efficiency services to residents and businesses in the City and County of Denver and its funding comes from the U.S. Department of Energy's Better Buildings Program (under the American Recovery and Reinvestment Act).  The fact is, decisions on energy efficiency and investment can be time consuming and can be confusing.  To address this, Elevations Credit Union has teamed up with the Denver Energy Challenge and Energy Smart in Boulder County to bring Elevations Energy Loans to eligible homes and businesses in Denver City and County and Boulder County. This team of experts provides access to energy advisors to help assess the business needs and make retrofit recommendations, connect them with qualified contractors to make the improvements and loan specialists to provide low interest loans (2.75% for homes and 3.75% for businesses).  Under this program, Elevations Credit Union is committing $35M in financing for energy efficient and renewable energy upgrades for eligible homes and businesses in Denver and Boulder Counties. 

In-line with the “Live Better Electrically” campaign, we each have some control over our energy use even without implementation of smart grid programs or smart appliances.  I enlisted the help of the Denver Energy Challenge and Elevations Credit Union to find out how.  What I learned was that I can make small changes to my energy use and make a big impact.  Some of these fixes require minimal up-front costs like the following three examples. 

1.      Lower the temperature of your water heater.  Why?  It reduces standby energy loss.  The report recommended setting the water heater to deliver at 120F or the lowest practical setting for your preferences.  “A good measure is if you can take a shower using only hot water (not adding cold water).”  Estimated savings in my home: $60/year. 

2.      Replace lighting with CFLs or LEDs.  Why?  They use less energy and heat output is much less which equates to less cooling required for hot summer months.  According to the report, “Compact Fluorescent Light bulbs (CFLs) use ¼ of the energy of regular incandescent light bulbs and last 8 to 15 times as long.  Replacing them with CFLs will save significant energy and replacement costs over time.”  Installed cost is estimated for my home at about $60 and the savings estimated at $124 per year.  I made these changes in the basement and my kids say it now looks like a stadium!  Brighter light and less energy use. Can’t beat that. 

3.      Sealing air leaks can make a big difference and it’s an inexpensive fix.  Caulk between the object and the drywall on all of the penetrations of walls and ceilings where you can see gaps.  In my home we found gaps in the outlets and switch plates on exterior walls, bath fans, duct boots in the ceiling and the exhaust vent over the microwave. According to the report,” air sealing is typically the most cost effective improvement you can make to your home. To properly seal out air leaks, a contractor will use a large fan called a blower door to depressurize your house. When this happens, the contractor can easily find the air leaks and take corrective measures. A good air sealing job will dramatically increase the comfort of your home and help you save significant energy.” 

Overall, it was estimated that with simple fixes alone I could save about $220 per year.  That’s $220 of warmer living with brighter more natural light in the winter and cooler in the summer.  That doesn’t even include my other Laura Ingalls Wilder type habits!   

Thank you to Elevations Credit Union, the Denver Energy Challenge, and Logan Faser (aka, “Saving Slick” from the Comfort Cowboy video series) for the thorough education, money saving tips and the increased comfort! 

 

 

 

 

 

 

 

 

 

 

Sustainable Technology: What Can We Learn From the Military's Vision to Increase Mission Effectiveness

Think about the military and it probably conjures up images of guns, ammo and tactical vehicles - not energy and water.  Yet these two resources are critical in enabling the military’s continued operational capabilities; including maneuvers, mission command, sustaining troops and equipment and humanitarian services.  Implementing ways to reduce the manpower required to deliver fuel and water and to reduce the vulnerability to supply shortages are critical to improving readiness, minimizing casualties and reducing operational costs. 

Sustainable technologies can enable significant reductions in fuel and water and their efficacy is not lost on the military.  Indeed, the military recognizes the importance of implementation of sustainable technologies to decrease future mission constraints, increase flexibility and resilience, safeguard human health, improve Army quality of life, and enhance the natural environment.  According to the Army’s Sustainability Report 2012, “the Army’s innovative solutions in 2010-2011 lessened the logistical challenge of providing water and fuel, reducing the number of convoys needed and thus reducing the risk to Soldiers during combat operations.”

The challenge is to lighten the logistical burden on the Forward Operating Bases (FOBs).  Manpower focused on resupply is manpower not focused on the mission.  "We need to figure out how to enable our Soldiers to go out on patrol, to set up camps, without this long logistical supply train," said Assistant Secretary of the Army for Installations, Environment and Energy Katherine Hammack. "We want to enable our Soldiers to go further with less of a supply train so that they can really fight better." 

Technology Enables Soldiers to Focus on the Mission

The military is testing technology that supports the operational base camp smart grid called SAGE for Smart and Green Energy for Base Camps program.  SAGE is using commercial off-the-shelf technologies including, utility hardware and open source control software to demonstrate and validate whether they can design a smart base camp microgrid technical specification capable of reducing the need for JP8 fuel by 30 to 60 percent at basecamps for 600 to 3,000 Soldiers.  

To test the concept and the technology the Army launched the Base Camp Integration Laboratory (BCIL) using sites modeled after forward operating bases in Iraq and Afghanistan. The BCIL is split into two 150-person camps called “Force Providers” that house energy-efficient shelters and structures within a 10-acre compound to test a micro-grid, an energy storage system, a shower and laundry water reuse system, a waste management system, a solar hot water system and a power management system.  The BCIL also provides a live Soldier environment where service members training at Fort Devens stay at the BCIL and provide input on what is being tested there. 

The solution envisioned conjures up images of a futuristic utopian society – except that the future is now.  SAGE is described as a holistic energy generation, storage, management solution.  The SAGE microgrid interconnects easily transportable purpose built shelters that consist of insulated structures as well as integrated solar with solar water heating, plug-in charging stations, integrated renewable energy, energy storage and optional interconnectivity to the grid.

Critical to understanding how this arrangement is possible is an understanding of how these technologies work together to significantly reduce fuel and water requirements.  One aspect is energy capture, another is taking advantage of renewable resources that are readily available at these remote locations, and yet another aspect is to not use the energy to begin with.  Energy efficient technology such as lighting and insulation provide opportunities to drastically cut the energy that is required to power the basecamp.  After all, the cheapest energy is the energy that is never used.
 
Water reduction is also a focus and water reuse drastically reduces the logistical burden on units.  “Within the Army, 70 to 80 percent of our resupply weight or convoy weight is fuel and water,” said Hammack.  Once all of the security and logistics factors are taken into account, the cost per gallon of water delivered can range between $5 to $30 according to the Army.  One saving measure tested by the BCIL is the Shower Water Reuse System (SWRS).  In simple terms, the SWRS uses a series of filters, membranes and chemicals to recycle waste or gray water for future use.  Significantly, although the water is only approve for reuse within the shower, the recycled water falls within potable quality standards.  The capacity of the system is also impressive.  Of the 12,000 gallons of water that can be treated per day, 75% of it can be reused which results in the potential savings of 9,000 gallons of water per day or 3.2 million gallons of water per year in just one shower facility.

The Army evaluates technology in terms of force multipliers. In this case, use of SWRS reduces the water required for transport which in turn, reduces the number of water convoys and the Soldiers that would be on those water convoys are now available to remain engaged in the mission.  The SWRS also impacts placement of new FOBs because strategic considerations can weigh more heavily on location determination rather than ease of resupply.   "We need to figure out how to enable our Soldiers to go out on patrol, to set up camps, without this long logistical supply train," said Hammack. "We want to enable our Soldiers to go further with less of a supply train so that they can really fight better."

If successful, these technologies are immediately rolled out to remote FOBs like Afghanistan and the return on investment is almost instant.  Each SWRS system costs roughly $170,000. If used to its fullest capacity, the Army could realize a potential savings of millions of dollars per unit each year. It is this type of innovation that the Army is banking on to enhance their capability and "do more with less," according to Army officials.

Ideally, like the Internet and GPS, both technologies that were developed by the military and subsequently commercialized to transform the consumer market, these concepts could be used to support resilient domestic civilian communities.  The recent strike of Hurricane Sandy left 8 million people without power.  Building sustainable communities that use less power, mitigate risk and use more renewable energy resources could help protect against increasingly complex and disastrous weather patterns.  Sustainable technology is not just about being green.  Ask the military – sustainable technologies enable mission effectiveness.