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May 2008

May 30, 2008

REVA Takes 2008 Frost & Sullivan European Automotive Powertrain Company of the Year Award

Frost & Sullivan presented its 2008 European Automotive Powertrain Company of the Year Award to Reva Electric Car Company (RECC) for demonstrating excellence in sales volumes, superior market penetration and high levels of customer satisfaction within the electric vehicle (EV) industry. In 2007, on average one REVA electric car was sold per day in the United Kingdom.

The REVAi.

RECC has successfully tested and evaluated lithium ion batteries for the REVA quadricycle. The newly developed lithium ion batteries provide a driving range of more than 140 kilometers (87 miles) compared to 60-80 km from the existing lead acid battery pack.

The company’s current REVAi has been designed to facilitate upgrades to li-ion packs when they are made available for sale this year. With the incorporation of the new AC electric motor, the REVAi increases the mid-range torque by 40% and offers a boost mode for short term acceleration.

RECC has demonstrated technology leadership in European markets with its ability to deliver an EV at a competitive price with sufficient performance for its intended purpose as a city commuter vehicle. Priced at less than nine thousand pounds, compared to the twelve to seventeen thousand pounds charged by its competitors, the Reva car, known as G-Wiz in the United Kingdom, offers customers exceptional value for money.

—Anjan Hemanth Kumar, Frost & Sullivan

RECC is building a new plant to LEEDS guidelines that will expand production capacity to thirty thousand vehicles per year by the end of 2008. The company has announced that it will launch one new vehicle and one new variant every year in order to build upon its position as a pioneer in the European EV market.

May 30, 2008 in Brief | Permalink | Comments (3) | TrackBack

Discussion Paper Calls for Modification of Alternative Motor Fuels Act to Better Support Energy and Environmental Goals

Collantes proposes a logic sequence to assess whether to keep, eliminate, or revise the AMFA provisions. Click to enlarge.

The two decade-old Alternative Motor Fuels Act—the statute that currently provides automakers with incentives under the CAFE program to manufacture Flex Fuel Vehicles—needs to be overhauled or scrapped to better account for issues related to the consumer acceptance of biofuel-capable vehicles and to the geographical correlation between biofuel supply and vehicle deployment; and to enhance energy security and reduce greenhouse gas emissions in the transportation sector, according to a new discussion paper out of Harvard University.

The paper, Biofuels and the Corporate Average Fuel Economy Program: The Statute, Policy Issues, and Alternatives, was written by Gustavo Collantes at the Energy Technology Innovation Policy research group, Belfer Center for Science and International Affairs, Harvard Kennedy School of Government.

The Corporate Average Fuel Economy (CAFE) program has served as the US’ principal policy mechanism for the reduction of oil consumption in the transportation sector since 1975. Other policy strategies, including demand reduction, fuel switching and vehicle technology mandates, have either had limited success or suffered from limited commitment.

In 1988, Congress passed the Alternative Motor Fuel Act (AMFA) with the intent of encouraging the development and widespread use of methanol, ethanol, and natural gas as transportation fuels by consumers and the production of vehicles powered by those alternative fuels.

(The underlying motivation, Collantes points out, even then was to enhance long-term national energy security through reductions in oil importation and, even if secondarily, to reduce emissions of heat-trapping gases from motor vehicles.)

Specifically, Congress, through AMFA, endeavored to induce manufacturers to deploy vehicles capable of operating on alternative fuels by providing for special treatment of such vehicles under the CAFE program....Reflecting Congress’s awareness of the lower per-gallon mileage that alternative fuels generally yield relative to gasoline, Section 32905 establishes that, for the purpose of measuring fuel economy, one gallon of alternative fuel is equivalent of 0.15 gallons of petroleum fuel. Thus, the Administrator of the Environmental Protection Agency (EPA) is to estimate the fuel economy of a vehicle running on alternative fuel by dividing the actual miles per gallon by 0.15. This way, not only would CAFE not hinder the commercialization of alternative-fuel vehicles, but also deploying such vehicles would help manufacturers meet their CAFE requirements.

The Energy Independence and Security Act 2007 (EISA) with its new CAFE program effectively extended the applicability of the AMFA provisions. Under the AMFA provisions of EISA 2007, a given manufacturer can use alternative fuel-capable vehicles to increase its average fuel economy for a particular model year up to a maximum of 1.2 miles per gallon for each of model years 1993 through 2014. The fuel economy credits will be phased out gradually starting in 2015 and ending in 2019.

While noting that AMFA has been relatively successful in inducing manufacturers into deploying flex-fuel vehicles, Collantes also points out that the original expectation of Congress was that once a reasonable supply of such alternative fuel vehicles developed, a demand for alternative fuels would ensue.

The latter effect was observed to a very limited extent. Therefore, all in all, the AMFA amendments cannot be considered a success. More importantly, as it will be discussed in this section, they cannot be expected to be any more successful than they have so far been, if they maintain their current structure.

Though well-intentioned and pioneering, AMFA took a unidimensional approach to solve a multidimensional problem. AMFA could have been more successful had the chicken-and-egg problem actually been the main obstacle to the market diffusion of alternative fuels. The main obstacles have been, however:

  1. The relatively low value proposition that flex-fuel vehicles running on ethanol blends could offer to consumers, vis-à-vis the mainstream vehicle-fuel system;

  2. The lack of a policy mechanism to internalize the external costs of gasoline relative to alternative fuels.

...Starting from an incomplete understanding of the relevant mechanisms of technology innovation, AMFA provided incentives for the vehicle manufacturer, but ignored the consumer and the fuel provider.

Collantes suggests that policies to effectively address transportation energy problems ought to be systemic—more effective solutions can be expected if the fuel and vehicle sides of the equation are not only considered separately but also in coordination. Among the potential approaches he suggests are schemes that relate the fuel-economy credits granted to flex-fuel vehicles to the proportion of fuel dispensing stations that offer high ethanol blends in the state.

Ultimately, however, he says that the AMFA provisions should be revised to reduce the incentives for automakers to use them merely as a mechanism to meet their average fuel economy requirements.

Disabling the compensating mechanism altogether would leave automakers with little incentive to keep producing flex-fuel vehicles. Leiby and Rubin (2000) estimate that, without fuel-economy incentives, production of FFV would decline by about 50%. At the same time, leaving the mechanism intact does not correct for the perverse effect of inducing lower average fuel economy.

Possible ways out of this dilemma include:

  • Prescribing a minimum gasoline fuel economy level for every flex-fuel vehicle model;

  • Requiring that flex-fuel vehicles be more optimized to operate on the alternative fuel, so as to close the gap in per-gallon mileage when the vehicle runs on gasoline and on a high ethanol blend;

  • Granting AMFA fuel economy credits proportionally to the accessibility of the corresponding alternative fuel in the regions where the vehicles are sold;

  • Complementing AMFA with a set of incentive mechanisms that send the right signals to industry. Collantes suggests a demand-based incentive scheme (DBIS) in which credits are calculated on an estimate of demand for E85, rather than on the supply of vehicles. Under such an accounting, automakers would be rewarded as FFV owners do most of their driving on E85. Conversely, automakers would be rewarded less than under the current incentive scheme as FFV owners do most of their driving on gasoline.

Under such a scheme, Collantes says, manufacturers would have incentives to induce consumer demand for E85 by improving vehicle performance on E85, deploying more flex-fuel vehicles in areas with more established refueling infrastructure, educating consumers on the benefits of using E85, and other strategies.

Deployment decisions would be based on their expectations on actual E85 demand, rather than as a mere strategy to meet their CAFE requirements.

Looking forward, it may be useful to think of the AMFA provisions in the context of the CAFE program as a whole. With the current political drive to address the problem of global climate change, there is a temptation to use CAFE as a climate policy tool. Meanwhile, federal standards on vehicle emissions of carbon dioxide are pending after a Supreme Court ruling in April, 2007. Given the obvious overlap between a fuel-economy program and a CO2-emission program, it is entirely conceivable for CAFE to be replaced with a CO2-oriented program. Such approach could provide incentives for biofuels more naturally than AMFA currently does.


May 30, 2008 in Ethanol, Fuel Efficiency, Fuels, Policy | Permalink | Comments (9) | TrackBack

Ivanhoe Energy to Acquire Oil Sands Assets; First Commercial Application of HTL Upgrading Technology

HTL processing in High Quality mode. Vacuum tower bottoms (VTBs) are routed to the Reactor where thermal cracking takes place. Upgraded VTBs (product) are quenched at the exit of the Reactor Cyclone and routed to the Atmospheric Distillation Unit where distillate and lighter material is sent to product tank and blended with straight run gas oils. Atmospheric bottoms are recycled to the front end of the Vacuum unit to separate VGO and lighter material. VTB’s can be recycled to extinction depending on the site specific energy requirements. Click to enlarge.

Ivanhoe Energy Inc. has signed a preliminary agreement with Talisman Energy Canada to acquire all of Talisman’s interests in three leases located in the heart of the Athabasca oil sands region in Alberta, Canada. The transaction will enable the first commercial application of Ivanhoe Energy’s proprietary HTL heavy-oil upgrading technology in a major, integrated heavy-oil project.

HTL is a field-located upgrading process that converts heavy oil to a transportable, partially upgraded synthetic crude oil and converts the upgrading byproducts to onsite energy. The process frees the heavy oil producer from the need to purchase diluent for transport, significantly eliminates the need to purchase natural gas to steam the reservoir, and allows the producer to capture the majority of the heavy oil-light oil value differential. In addition, a study by Enbridge in 2002 concluded that partial field upgrading of bitumen could reduce total greenhouse gas emissions by more than 20% from a generic Steam Assisted Gravity Drainage (SAGD) operation.

HTL upgrading uses a continuous, short contact time thermal conversion process (Rapid Thermal Processing or RTP), which takes place at moderate temperatures and at atmospheric pressure. It uses a circulating transported bed of hot sand in the system to quickly heat the feedstock and convert it to more valuable products, in the absence of air. There are two general commercial process configurations of HTL (High Yield and High Quality) applicable to heavy oil or bitumen upgrading.

Furthermore, the HTL process is technically and economically scalable down to as low as 10,000-30,000 barrels of oil per day, allowing for vertical integration of smaller heavy oil assets in Canada and internationally.

The underlying HTL process was initially developed by the Ensyn Group in the early 1980s and has been applied commercially for more than 15 years in the biomass (wood) industry. Seven commercial Ensyn biomass processing facilities are in operation in the United States and Canada.

The technology was piloted in 1998 using various heavy crude sources. A commercial demonstration facility (CDF) with a feed capacity of 1,000 barrels per day was built and operated since 2004. Ivanhoe Energy and Ensyn merged in April 2005, and Ivanhoe Energy gained full ownership of the upgrading technology. Ensyn Group spun off its existing biomass processing business, Ensyn Renewables Inc., to its shareholders prior to the closing of the merger with Ivanhoe Energy.

The total purchase price for the Talisman transaction is C$105 million, of which C$30 million is payable at closing.

Recent evaluations of the Talisman leases estimate that they contain approximately 294 million barrels of contingent bitumen resources (with low and high estimates of approximately 216 million and 394 million barrels, respectively) out of approximately 752 million barrels of discovered petroleum initially-in-place.

The proposed home for the initial, integrated HTL heavy-oil project will be Lease 10, near Fort McMurray. Based on estimates of contingent bitumen resources, Lease 10—the principal block being acquired—would be capable of producing between 30,000 and 50,000 barrels of oil per day.


Talisman will retain back in rights of up to 20% in all of the acquired leases for a period of three years. During this period, Talisman will also have the right of first offer to acquire any participation interests in heavy oil projects in Alberta that Ivanhoe wishes to sell, excluding the acquired leases, on mutually agreeable terms. In addition, in order to allow Talisman to effectively monitor the commercial effectiveness of Ivanhoe’s HTL technology, Ivanhoe and Talisman will sign an HTL Data Monitoring Agreement.

We now have achieved our initial objective. We are anchoring the roll-out of our HTL heavy-oil upgrading process with a first-class, high-quality resource asset in the centre of the Athabasca oil sands region. We will now proceed full speed ahead with preparations for an integrated HTL heavy oil project on Lease 10, while at the same time progressing discussions relating to additional heavy oil opportunities in Canada and internationally.

—Robert Friedland, Deputy Chairman of Ivanhoe Energy

Lease 10 has a relatively high level of delineation (four wells per section). It is believed to be a high-quality reservoir and an excellent candidate for thermal recovery production using the SAGD (steam-assisted gravity drainage) process. The Lease 10 reservoir characteristics are believed by Ivanhoe to be similar to those at Petro-Canada’s 30,000 barrels per day MacKay River project—one of the most successful and longest running SAGD projects in the Athabasca oil sands.


Ivanhoe intends to integrate established SAGD thermal recovery techniques with its patented HTL upgrading process, producing and marketing a light, synthetic sour crude.


May 30, 2008 in Oil sands | Permalink | Comments (4) | TrackBack

May 29, 2008

Dynetek Announces US DOT Approval of 6,500 psi H2 Cylinder

Dynetek Industries Ltd. has received approval from the US Department of Transportation (DOT) of their 450 bar (6,527 psi) cylinder for use in Dynetek BT450 Tube Trailer Systems for bulk transport of compressed hydrogen.

In October 2007, Dynetek announced delivery of the first BT450 Tube trailer systems for the transport of hydrogen in Canada. These first systems were approved by Transport Canada for operation within Canada.

The traditional method of bulk gas hauling is with steel tube trailers with typical operating pressure of 3,000 psi. Our new high pressure cylinders and systems which will operate at 6,500 psi, will enable direct refueling of hydrogen vehicles from our specially designed BT450 modules.

—Dr. Christian Rasche, President and Chief Executive Officer of Dynetek

The tanks come in two sizes, holding 2.17 and 8.64 kg H2 respectively. Maximum fill pressure for the tanks is 563 bar (8,158 psi).

Dynetek has received an order from Air Liquide to provide cylinders for the construction of a BT450 Tube Trailer system, which will be used to refuel the hydrogen bus fleet being deployed by BC Transit for the 2010 Winter Games in Whistler, British Columbia.

May 29, 2008 in Brief | Permalink | Comments (5) | TrackBack

ABO to Host Second Annual Algae Biomass Summit

The recently-formed Algal Biomass Organization (ABO) will hold the second annual Algae Biomass Summit in Seattle, 23-24 October.

More than 400 experts in and proponents of algae biomass gathered for the first Algae Biomass Summit in November 2007. At that event, attendees agreed to form the Algal Biomass Organization to collectively push for algae-based energy solutions.

Summit attendees elected the following members to a Steering Committee responsible for organizing and developing the ABO:

  • Billy Glover and Darrin Morgan, The Boeing Company (committee co-chairs)
  • Thomas Byrne, Byrne & Company, Ltd (committee secretary)
  • Mark Allen, A2BE Carbon Capture
  • Dr. John Benemann, Benemann Associates
  • Dr. Keith Cooksey, Montana State University
  • Tyler Krutzfeldt, Mont Vista Capital
  • Dr. Greg Mitchell, Scripps Institution of Oceanography
  • Dr. Phillip Pienkos, National Renewable Energy Laboratory

The association is opening membership to any parties interested in this evolving area of research, development and potential commercialization.

May 29, 2008 in Brief | Permalink | Comments (1) | TrackBack

Approximately 19,000 GM Hourly Employees to Take Buyout

Approximately 19,000 of GM’s 74,000 US hourly employees have decided to take an early retirement or buyout package. Most of the employees participating in the company’s attrition program will leave the company no later than 1 July 2008.

GM will fill job openings with current employees whenever possible, as spelled out in the provisions of the GM/UAW national labor agreement. In facilities where GM needs new employees, those individuals would be hired in at the entry-level wage and benefit structure. The extent of the new hiring at each facility will be determined on a plant-by-plant basis.

This attrition program gives us an opportunity to restructure our US workforce through the entry-level wage and benefit structure for new hourly employees.

—Troy Clarke, Group Vice President and President, GM North America

Clarke recognized UAW leadership’s role in negotiating the 2008 attrition program.

May 29, 2008 in Brief | Permalink | Comments (3) | TrackBack

Sapphire Energy Introduces Algae-Derived Bio-Gasoline

Start-up algal biofuels company Sapphire Energy unveiled a renewable 91 octane gasoline that conforms to ASTM certification derived from algal a biocrude.

Sapphire has developed a platform that produces a “green crude”  and biohydrocarbon fuels from modified algae. Sapphire’s founders and leadership team includes scientists in the fields of petroleum chemistry, biotechnology, algal production, plant genomics, and biogenetics.

Brian Goodall, Sapphire’s new vice president of downstream technology, was most recently at Imperium Renewables, where his team there recently delivered the 1,000 gallons of biojet fuel used on Virgin Atlantic’s first-ever commercial “green” jet flight. (Earlier post.)

The one-year old San Diego, California-based Sapphire has already gathered $50 million in funding from investors, including ARCH Venture Partners, the Wellcome Trust, and Venrock.

Sapphire’s scientific supporters include Scripps Research Institute; University of California, San Diego; the University of Tulsa, and the Department of Energy’s Joint Genome Project.

May 29, 2008 in Bio-hydrocarbons, Biogasoline, Brief | Permalink | Comments (19) | TrackBack

UN FAO: Biofuels a Significant Demand Factor in Food Price Surge

Although not the sole cause for the worldwide rapid increases in food prices, the biofuels market has created a new and significant source of demand for some agricultural commodities such as sugar, corn, cassava, oilseeds and palm oil. This increase in demand, according to a report prepared by the UN’s Food and Agriculture Organization (FAO) “has been one of the leading factors behind the increase in their prices in world markets which, in turn, has led to higher food prices.”

The report, Soaring food prices: facts, perspectives, impacts and actions required, was prepared as one of the discussion documents for an upcoming conference on world food security in Rome focused on the challenges of climate change and bioenergy.

A “confluence of different forces” has contributed to the rapid increase in food prices, according to the report. On the supply side, these include:

  • Weather-related production shortfalls. Cereals production in major exporting countries has declined annually by 4 and 7 percent respectively beginning in 2005. Yields in Australia and Canada fell by about one fifth in aggregate, and yields were at or below trend in many countries.

    There was a significant increase in cereal output in 2007, especially in maize in the US, in response to higher prices. On the other hand, production of all the other major food commodity groups by major exporting countries was not affected in a similar way during the same period. The quick supply response for cereals in 2007 came at the expense of reducing productive resources allocated to oilseeds in some countries (especially soybeans in the United States), resulting in an important decline in oilseed production.

  • Stock levels. Global stock levels have declined, on average, by 3.4% per year since 1995 as demand growth has outstripped supply. Production shocks at recent low stock levels helped set the stage for rapid price hikes.

  • Increasing fuel costs. Increases in fuel prices have also raised the costs of producing agricultural commodities with, for example, the US dollar prices of some fertilizers (e.g. triple superphosphate and muriate of potash) increasing by more than 160% in the first two months of 2008, compared to the same period in 2007. With freight rates doubling within a one-year period beginning in February 2006, the cost of transporting food to importing countries also has been affected.

On the demand side, the surging biofuels market is the significant new factor.

Among all major food and feed commodities, the additional demand for maize (a feedstock for the production of ethanol) and rapeseed (a feedstock for the production of biodiesel) has had the potential for the strongest impacts on prices. For example, out of the nearly 40 million tonne increase in global maize utilization in 2007, almost 30 million tonnes were absorbed by ethanol plants alone, mostly in the US which is the world’s largest producer and exporter of maize. Over 30 percent of that country’s 2008 maize harvest is forecast to be diverted to ethanol distilleries, which amounts to over 12 percent of global maize production. In the EU, the biodiesel sector is estimated to have absorbed about 60 percent of member states’ 2007 rapeseed oil output, which amounts to about 25 percent of global production and 70 percent of the 2007 global trade in the commodity.

The issue is not limited to how much of each crop may be used for biofuels instead of food and feed, but how much planting area could be diverted from producing other crops to those used as feedstock for production of biofuels. To illustrate, high maize prices since mid-2006 encouraged farmers in the US to plant more maize in 2007. Maize plantings increased by nearly 18 percent in 2007. This increase was only possible because of reductions in soybeans and, to a lesser extent, in wheat areas.

Other relevant factors contributing to the rise in prices include operations on financial markets; short-term policy actions; and exchange rate swings.

Despite an expected increase in world cereal production of 2.6% in 2008, low stock levels that are not likely to be replenished quickly, the report notes, and “the possibility of further sharp price hikes and continued volatility as a result of unforeseen events seems to be likely for the next few seasons.

The report concludes that the world could be facing higher agricultural commodity prices for some time.

Of significance in this respect is the possibility of the persistence of demand for biofuels, which would depend on a number of factors, including:

  • whether the price of crude oil continues to increase and policies supporting the biofuels sector are maintained;

  • whether the rate at which second generation feedstocks—lignocellulosics that do not compete with agricultural products for land resources—are developed and commercialized speeds up sufficiently to replace first generation feedstocks.

Other important factors that will be influential over the longer term include population and income growth, as well as intensifying urbanization; climate change impact on agricultural yields in different parts of the globe; land and water resource constraints; and the ability to increase yields of agricultural products through more effective use of existing technologies and/or adoption of new technologies.

Separately, the just released Agricultural Outlook from OECD and the UN Food and Agriculture Organization (FAO) projects that while agricultural commodity prices should ease from their recent record peaks but over the next 10 years they are expected to average well above their mean levels of the past decade.

In OECD countries, at least, the growth of biofuel production has thus far been driven largely by policy measures, and the report says that it is not clear that the energy security, environmental and economic objectives of biofuel policies will be achieved with current production technologies. The report suggests further review of existing biofuel policies.


May 29, 2008 in Biodiesel, Biomass, Ethanol, Policy | Permalink | Comments (29) | TrackBack

Diesel Crosses $5.00/Gallon Mark in California

The price gap between diesel and gasoline has been expanding, most visibly in the California market. Click to enlarge.

The price of diesel jumped past the $5.00/gallon mark in California this week to $5.027—a 69% increase from one year ago, according to the latest data from the US Energy Information Administration. The average price for retail on-road diesel across the US was $4.731/gallon.

The average price for gasoline (all formulations) in California for the same period was $4.099/gallon. The average price of gasoline across the US as reported for this week was $3.937/gallon. The premium between diesel and average gasoline prices in California for the week is $0.928/gallon, or a 23% price premium for diesel on average. nationwide, the premium is $0.794/gallon price premium, or 20%.

The increasing—and persistent—gap between diesel and gasoline—which is beginning to eliminate the fuel consumption advantage of diesel over gasoline engines—could negatively affect the adoption of diesel powertrains, just as they are beginning to come back into the market.

In a presentation during a workshop discussing policy mechanisms for further reductions in vehicle greenhouse gas emissions at the California Air Resources Board (earlier post), Dr. Ken Kurani of the UC Davis Institute of Transportation Studies (ITS-Davis) noted that in the past, adoption of alternative fuel powertrains has dropped precipitously once the perceived price benefit of the switch decreases or disappears.

Click to enlarge.

He specifically noted the example of the adoption of diesels in California in the 1970s and 1980s, with a plot of diesel vehicle sales against the price of gasoline and diesel. With diesel priced lower than gasoline, sales rose; once diesel prices exceeded those of gasoline, sales dropped sharply. (See chart at right.)


May 29, 2008 in Diesel, Fuel Efficiency | Permalink | Comments (33) | TrackBack

Tesla Provides Update on “Powertrain 1.5”

Tesla Motors CTO JB Straubel has posted an engineering update on the company’s work on “powertrain 1.5”—an improved motor to handle higher current and torque; an improved inverter to deliver higher motor current; and a single-speed gearbox designed to replace its problematic two-speed transmission—on the company’s website.

Initial production deployment of the new powertrain is targeted for around vehicle #41 later this year.

We also have a Roadster with a prototype 1.5 powertrain that we are now driving regularly. The higher torque is really phenomenal. I have many hours behind the wheel of the 1.0 powertrain and this is simply much better. The motor torque is improved by a bit more than 30% beyond what was already great and the ¼ mile time for the car is now in the 12.9 second range. The top speed of the vehicle remains over 120 mph.

—JB Straubel

In addition to the improved motor, inverter and transmission, the new powertrain includes upgrades to the vehicle firmware and a new motor to gearbox coupler. There have been no changes to the battery pack.

According to Straubel, Tesla’s upcoming sedan project will also use a single speed gearbox that will be very similar to the new gearbox in powertrain 1.5, re-using most of the internal components and designs.

That is how we can accelerate the sedan project by leveraging this work.

—JB Straubel

May 29, 2008 in Brief | Permalink | Comments (18) | TrackBack

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