Per Dahlen on CNBC Asia Squawk Box

// Wed. Nov. 18 2009 | 09 08 00 ET

Per Dahlen, partner at Portelet Asia says the region has potential to produce much more green energy, and that Southeast Asia could someday be a net exporter of clean fuel. He talks to CNBC’s Martin Soong. (Link)

Crisis? Save on Gym and Laundry!

So we have a crisis, bith economical and environmental, well why not combine your efforts into one single solution – the bicycle wash machine!

Go on, get going build your own and get fit!

When you come home after a tough day at work and you know you will need to do the washing and head to the gym, just jump on the enviromentally friendly washer, you will save on gym fees, laundry ditergents, water, electricity and you will make a good deed for mother earth.

Estimated ROI should be a couple of hundered percents, even better if you have an old bike which you have not used in the past years, with a little bit of handyman work (TJ, Greg?) you are up and running in a day.

And do remember you get fit at the same time you save money and the environment. Bish, Boom, Bang – and you are the hero at home, Mama will love you.

I call for action right now, take your responsability – biuld a bike-washer today!

Full story here form MIT.

Per

Singapore is not ready…

Eugene wrote a great article about the current status in Singapore with regards to its readiness for Renewable Energy. I was thinking of writing a something similar after having attended the same meeting, but I decided it would better to just add a comment to Eugene’s article.

Per

Oil going $200, $300….

The price of oil is for me a very fascinating topic as you can see from my previous postings, here and here. Yesterday the price reached another high, passing $145 per barrel, and where every you look you read stories about how it will continue. In today’s Business Times (Singapore) there is a story about some investors buying futures for oil at $300 by December this year, that is 2008!

So is this a bubble or is it here to stay? Well looking at the steep increase recorded in  the past 18-24 months, everything points to a bubble ready to burst. However the more I read about this I do believe that we are actually seeing the market forces playing out, it is a simple question about supply meeting demand.

Goldman Sachs, which I do believe knows what they are talking about, they were among the few to recognise and act on the recent Credit Crunch, they just released a report claiming that the current raise in oil prices are not due to speculation, it is a result of too much demand and too little supply.

Supply of Oil

Supply has been flat since 2003, that is 5 years ago, at around 85 million barrels per day. I recommend you to read this very interesting story from National Geographic. If true, which is very likely, then we have reached the end of cheap oil, anything from here will be more difficult and more expensive to extract, process and to distribute.

Scary actually, when it is time for Karl, our 2,5 years old son, to get his drivers licence the oil production may be half of what it is today. Just imagine the prices by then, maybe €1.000 to fill-up the tank? Not a fun prospect, especially taking into account that the demand is growing extremely fast, especially in this part of the world.

Demand for Oil

On the demand side there are two major drivers, India and China. In China they are adding 20.000 cars on the roads EACH DAY! India are launching Nano’s and other similar, small vehicles at an ever increasing rate. Now clearly these cars are much more fuel efficient that a gas-guzzling SUV’s in the US, but the sheer numbers is just mind boggling. The underlying reasons for this, is the economic growth of 8-10% per year, that brings more disposable income to the local population.

Today in China you have about 250 million middle class workers, and this will increase to 750 million in just 10-15 years. Imagine, that is adding the population of Europe being able to purchase a car, in China alone, then add India and the rest of Southeast Asia and we are facing a massive growth in the number of cars.

I do believe that this will be somewhat self regulating by the fact that the infrastructure just can not grow that fast. Roads, bridges and parking garages, can only be built at a certain pace, but the trend is irrevocable.

Implications

Setting aside the Climate Change issue, power generation for electricity will be OK for the next 50-80 years by the supply of Coal and Gas, just dig it up and burn it, to generate electricity and distribute through the grid. Fuel on the other hand is much more difficult and is the biggest worry for the future. If I were to bet on anything related to CleanTech and Green solutions, transportation sector must be the obvious choice.

In the next coming 5-10 years the cost of transportation will have paramount implications on how we live, work and play, due to the reliance of Oil as the only resource to power our cars, trucks, planes and ships. Currently about 60-65% of all oil is used for transportation and when demand continues to increase and supply is limited, alternatives to this dependence is required now.

Future scenarios

Looking into the future of energy supply and demand for the transportation sector, what will be the evolution? I normally use a very simple model when dealing with Cleantech related business opportunities:

1. What can we reduce?
2. How can we make things more effective?
3. What alternatives to clean fossil fuel are there?
4. Renewable energy alternatives?

Let us review the future using this simple model.

What can we reduce?

Well it is simple really – Drive less. And we will do. We are going to travel less and making more intelligent choices when travelling. We are already seeing changes in behaviours. For example schools in the US has already been reported to go to 4 days in school and one day of home studies.  I live in Changi, a remote location in Singapore, and we see a drastic drop in people coming out here to eat, despite the reputation for some of the best food in Singapore.

We will also see less travel to work, working from home is a trend that will increase over the next few years and video conferencing and Skyping will be even more important. Vacations will probably also be effected, we will travel less and we will travel shorter distances in the future. Distribution and logistics will become a more important cost factor for products and locally produced products will be more competitive, hence reducing the demand for logistics transportation.

To sum it up high oil prices will reduce the demand for transportation. The businesses to be in is Communications, SOHO equipment and services and local tourism. However we will always need to move around.

More effective transportation

When we travel we will use more public transportations in the future. Buses, Trains and Metros will be more important and more and more people will use them. Cities and regions will increase spending on infrastructure and public transport will be easier, faster, more convenient and will reach longer distances that what it does today.

Making the cars and trucks more fuel efficient is something that the manufacturers has been doing for decades and not much will be happening here. What will happen, and what is happening, is that we will choose smaller and more fuel efficient cars. GM, Ford and Chrysler has seen dramatic drops in SUV sales and has announced the closure of several plants making big, fuel thirsty cars.

If you are to invest in something here, betting on car manufacturers of small cars (Tata, Smart, etc.) and public transportation infrastructure companies (ABB, Alstom, etc.) would be good bets.

Clean Fossil Fuel?

There are a lot of activity in using other fossil fuels for transportation instead of Oil and Petrol. CNG, compressed Natural Gas, is the clear alternative and is better then oil from a climate change perspective. Many countries, including Singapore, has started to promote the conversion and sale of CNG compatible cars. I do believe that we will see an increase in the use of CNG cars, if not just due to the cheaper price then petrol.

CNG still has one major obstacle and that is infrastructure, to build a network of Gas filling stations is a major undertaking and similar to the needs for Hydrogen to take off (more about Hydrogen later). As a owner of a CNG car you also have the inconvenience about having a big gas tank in your trunk.

Coal to gas is also being worked on, both converting coal to liquid fuel and to gas. Clearly an alternative looking into, in order to supply enough fuel, however it is not a long term viable proposal, in the end coal will also run out and prices will increase.

Short term business opportunities in businesses related to CNG, if there is a support from the different governments and industries. In the end though we will have to look for Renewable Energy alternatives.

Renewable Fuel Alternatives

There are three major alternatives and a host of variants to choose from. The major alternatives are BioFuel, Electricity and Hydrogen. This definition is chosen due to the use of engine, Biofuels uses the traditional internal combustion engine and the current fuel distribution infrastructure and be reused. Electric cars just need a plug into the wall to charge the batteries and an electric motor is powering the vehicle. Hydrogen cars are using a FuelCell as the power source.

BioFuels

Ethanol and BioDiesel are the two major potential fuels. Ethanol is derived from sugar based feedstock (Corn, Sugar, Wheat, etc.) that has been destilled to alcohol and to be used in petrol engines with a sparkplug. BioDiesel comes from oil-based feedstock(Rape seed, Palm, Algae, ect) and has been processed to be used in Diesel engines.

Current debate about Food-for-Fuel is a result of ineffective first generation technology for ethanol production and poor agricultural subsidies and political decisions. With improved technology and proper regulations and government, Biofuels are to play an important part in replacing Oil for transportation in the future. The biggest advantage for Ethanol and BioDiesel is the possibillity to blend it with fossil fuel in existing vehicles and distribution infrastructure.

Biogas is an alternative with potential, especially if CNG distribution networks and installed vehichle park increases. The use, and growth, of Biogas for transportation will be in direct relation to the use of CNG, Argentina, Sweden and maybe Singapore are potential markets.

Electric Cars

The electrical engine has an efficiency of close to 90% compared to the 35% efficiency of an internal combustion engine, making it a great propulsion solution. The problem with electrical cars is not in the engine, nor in the distribution of the power, the problem lies in Electrical Storage (batteries) and the source of the electricity.

If I take the electricity from the plug in the wall and the electricity is generated from a coal fired plant, then the net effect is very questionable, as well if the source is an HFO plant, Natural Gas plant or a Newclear plant. We would just be shifting the problem to another souce. If electrical cars are to have a real impact the electricity must also come from a renewable source.

Now thanks to the introduction of renewable alternatives to energy generation, electrical cars can be very interesting. PV, Photo Voltic solar panels is of course the best, and ideal solution for local electricity generation. Many may not know this, but today (2008) it is possible to drive 80 Km powered from 10 m2 of PV solar. When prices of electric cars and PV comes down we will see a lot of PV installed on-top of garages, especially in sunny regions like California, Spain and in the Middle East.

The biggest problem for electric cars is however the storage of the electricity, we need a small, fast loading and long lasting battery in the vehicles in order for electric cars to take off big time. A lot of money is going into this at the moment, recently a Dutch company announced a battery able to be charged in just 10 minutes for 80 Km of driving, pretty cool when this comes into production.

Hydrogen and Fuelcells

Hydrogen and Fuelcells has been mentioned as an alternative to petrol for decades and a lot of money has been spent on this, notably from companies like BMW. Infrastructure is however a major blocker for widespread acceptance, so is the generation of the Hydrogen. I do believe that we have niche applications for Hydrogen in Forklift trucks, Golf carts and Delivery trucks, however it will not be a mainstream solution for the majority of our transportation needs.

Conclusions

I do not believe that there is an Oil Bubble, we are just experience the natural market forces of supply and demand. There is just not enough oil around to power all the cars, busses, planes and ships out there. This will make the oil price continue to raise, how fast I leave to the investors and economists to work out, but we are experiencing a major shift in how we use oil and petrol.

The future may look very grim, especially since it is happening as fast as it is. On the other hand, and from the perspective that I choose, the future looks extremely bright. Never have we had such a huge business opportunity in world history, it is estimated that 45 trillion dollars (!) are to be spent to sort out Climate Change and dependence of Fossil Fuel over the next 20 years.

As Nicholas Parker, the Chairman of Cleantech.com told me, “While our past generations had to fight for independence, or to fight fashism, the only thing we have to do is to be smart and bring in the money”.

I guess this article raises more questions than answers, however it is a great framework to use for the continued effort in finding the best business opportunities related to the Cleantech revolution.

See you soon again….

Per

Future for our children….?

Everyday we hear the same thing over and over again about oil prices and climate change, but I am pretty tired of not being able to find the real numbers behind the current situation, so this morning I just decided to make a brief Google research to get some more facts on the table.

My friends – Wake-up!

Take a look at this graph from “The Oil Drum“:

Complicated? Nee. It shows you different scenarios by different agencies around the world about how much Oil is actually left to produce. Please note that every curve peaks between 2008 and 2012. That is now, today!

I wrote earlier about the possible Oil Bubble, you can read that story here, looking at the graph above it is probably likely that prices will just continue to raise, after all here is a clear example of supply and demand, no? Looking at the Oil price development from 1999 and projecting towards end of 2012 we see the following trends:

To compensate for the weak dollar I just added in the currency exchange rate to get the Oil prices in Euro and the truth is probably some where in between, so in the big picture Oil prices is not in a bubble, at least not a big one, we are running out of supply!

You may say that this is due to speculation, yes it is true in part, according to BBC yesterday the current invested “speculation” capital in oil commodity is equivalent to the current consumption of China, to put that in a context China is using some 7.500 thousand barrels per day and the world consumption is 85.000 thousand barrels per day. So less then 9% of the current oil price should be due to speculation, but probably a lot of people are banging on the continued raise so let’s say that some 25%, or USD33 is due to speculation, still giving us a price per barrel over USD100.

This is my own crazy predictions, let us see what the traders on Wall Street thinks about the future of Oil:

So let us reflect a little about this and put things in our own perspective. Clean up the graph and put in concrete measures and you will end up with this:

In just 12 years, when Karl is to go into Secondary school and to start chasing skirts, oil is finished, no more, zip……maybe…

Let’s assume that it is not that bad, so maybe another 10 years (Karl 24) another 20 years (Karl 34) no matter how we are trying, the generation that we have brought to the world will suffer badly in their lifetime, that is a fact.

Now this is only taking into account the use of oil, and its potential impact of the world as it is. What about the global warming issue:

So is Biofuels the answer to our problem? Well I am convinced that the current generation of Biofuels does more harm than good. You can argue this from many points of views and here is one point of view from the side of the spectrum that thinks current use of Biofuels are madness:

Earlier this year BBC ran an full week story about the state of Oil and Climate change and one thing that stuck to my mind was the fact that; if you drive a Range Rover Sport in London for a year on Biofuels, you use up are much grains enough to feed a whole village of 200 people in Africa for the whole year. I like Range Rover Sport, as a matter a fact I was thinking of getting one, but this is just crazy.

As a Swede I grew up with Greenpeace and Treehuggers and it was just not cool, nerds in funny bag packs and “no to everything” attitude. Now things are different and I do believe that the only way to change the current situation is to make CleanTech a business, and it will probably be the biggest business opportunity we have aver faced, it will dwarf the Internet craze back in the 90’s.

If you are interested in CleanTech and would like to know some more, here is a great 20 minute report from BBC, link.

What we for sure can do today is to start reducing our energy consumption, drive less, go and change your light bulbs, use less heat/air-condition, use less water, reduce waste, etc.

Think through your current situation, think your next career move, what can you do, you are smart, you can help without sacrificing much, if any at all…

Join in and do your part – Today.

Stay tuned….

Per

Al Gores New Slideshow

Here the latest sideshow from Al Gore.

Oil bubble?

A lot of people including myself has become very interested in the CleanTech riding on the wave of current oil prices and increased awareness of global warming and climate change. It feels right to do something in this area and it is necessary, however let’s be fair, none of these business activity in Cleantech would ever have happened now if it wasn’t for the increase in oil prices.

And what if this is just another bubble, I was myself very much involved in the last major bubble – the Internet bubble, and I hopefully learned from my mistakes, but have a look at the following chart, it looks very like a bubble to me:

In this graph you find in the oil price per barrel since 1993 plotted against the price of Natural Gas. In the two smaller graphs you have to your left, the 1929 stock market crash and in the right one, the Internet bubble crash, looks kinda similar to me, no?

What if now this is a bubble and we will return to lower oil prices, we I guess that is good for the majority of the people in the short run, current commodity prices just pushed some 100 million under the minimum level of existence, hence all the fuzz in the UN the past few weeks. But what about the environment in the long run? How much focus on Cleantech will remain when the oil returns to US$50 per barrel and the business drivers are not there any more?

Most people agree that you can make Ethanol profitable at US$90 and Biodiesel at US$60 per barrel, or if it was the other way around, does not really matter in this discussion, the reality will be that climate change warnings alone will not be enough to pull the CleaTech wagon through to a sustainable future, or will it?

The Internet brought with it Boradband, Google and Software as a Service, great inventions that we all benefit from. Will we be able to see the same thing in CleanTech even if the oil bubble bursts? Just looking into the Algae scene which you can read about in my other blogs, it looks frigtlingly much like the Internet photo scene in 1999 when I started ViaCarla together with Greg Lee. There were more then 200 start-ups back then and the total investments into the Internet photo space was at least US$500M over 3-4 years.

The trick will be to pick the oFoto, Shuttelfly of Snapfish amonth all the Algae technology companies out there. I have no doubt that Algae will be a very important ingredience in the future of fuels and climate change, but the question is how and when, as I can see it right now we are still 3-5 years away before we can see what emerges out of this industry. I believe that it will be something great, but it will probably look more like YouTube, Twitter, or Facebook then the early internet photosites in web 1.0.

As always I welcome comments to these simple reflections from a rainy but warm Singapore.

Per