Cruising north on Interstate-5 in a Chevy Equinox hardly sounds like a reason to be excited, but I felt lighter than air yesterday. That may just be an effect of the hydrogen fueling the car, or perhaps just the giddy sensation that comes from driving the future of General Motors on the same day their future looks so uncertain. Whatever the cause, my heart was beating loudly as I drove the 40 miles or so from Ft. Lewis to Seattle in a caravan of other hydrogen fuel cell cars. My heart was definitely much louder than the practically inaudible sound of the fuel stack converting hydrogen to electricity and water.

The Equinox is a compact sport utility vehicle, sort of like a minivan for people who don’t want to drive minivans. This Equinox is one of eight hydrogen powered cars from Daimler, General Motors, Honda, Hyundai-Kia, Nissan, Toyota and Volkswagen traveling north from Chula Vista, CA to Vancouver, BC as part of the second annual Hydrogen Road tour. The cars, which left on May 26 and will finish their tour on June 3, are stopping at 28 cities along the way to give people a chance to try out the cars and learn about hydrogen fuel cells. To put it simply, hydrogen fuel cells work like batteries, with the hydrogen ionizing into electrons and protons. The electrons are forced through a circuit, creating an electric current. The waste products coming out the end of the tailpipe are just water and a little bit of heat—much cleaner than internal combustion exhaust.

One cell produces very little voltage, but stacked together they do quite well. The Equinox I drove could produce 94 kW, reach highway speeds of as much as 100 miles an hour (electronically regulated to prevent overtaxing the fuel cells), and go 150 miles on just 4.2 kilograms of compressed hydrogen.

I got the experience of what it’s like to drive one of these cars this morning, when I drove down to Fort Lewis near Tacoma, WA. Fort Lewis was chosen as one of the sites to stop at because the military is building a hydrogen fuel maker from a wastewater treatment plant and plans to have a shuttle bus and 19 forklifts that run on hydrogen gas sometime in the next couple of years.

Fort Lewis also currently is expanding its use of other alternate fuels such as biodiesel and ethanol. “We’re trying everything to see what’s best,” says Miriam Easley, sustainability outreach coordinator at Fort Lewis. With the military rather than civilians in charge, much can get done quickly, including testing different alternative fuels in a semi-closed economy. “If anybody can get it right, the military can get it right,” said Col. Cynthia Murphy, garrison commander at Fort Lewis.

Much of the future of alternate fuel vehicles depends on the infrastructure available to support them. If there were enough places for people to fuel hydrogen powered cars, people would be more willing to buy them. But to create demand for the fueling stations, the cars have to be already sold. “It’s a chicken and egg question,” said Dawn McKenzie, and assistant manager of product communications for GM and one of my passengers as I drove. This is a thorny problem for car manufacturers. Washington does not currently have any hydrogen stations, but it does offer other types of alternative fuel. After driving back to Seattle, we went to one of them, a Propel station providing both ethanol and biodiesel.

Compared to hybrid vehicles like the Prius this felt more like a gasoline powered car, albeit quieter. There’s no abrupt transition like in the Prius between the battery and gasoline engine. If it weren’t for a small indicator light, it would be hard to tell if the car was even on.

Perhaps the most important and most subtle aspect of driving a hydrogen car is that it really is not that different in feeling from driving a regular car. But it is quieter, more economical and decidedly more environmentally-friendly than standard gasoline engines. It’s easy to imagine a transition in America to these kinds of cars. It’s a hope that keeps me buoyant.

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At least five area companies that we watch at Xconomy have had significant layoffs in the past two weeks. They span the fields of energy, biotech, hardware, and software. The sad part is that none of these cases is particularly surprising. You can check our updated list of tech and life sciences layoffs in the Northwest here.

Here’s a roundup of the carnage from the past couple of weeks:

—Imperium Renewables announced yesterday it has laid off 24 workers at its biodiesel production facility in Grays Harbor, WA. (An undisclosed number of employees remain there.) The company said the cuts were made because of reduced demand for biodiesel, high feedstock prices, and highly volatile petroleum fuel markets. “These are difficult choices that will allow Imperium to survive and grow when the market turns around for the biofuels industry,” said John Plaza, founder and CEO of Imperium, in a statement. “We understand this is a difficult blow to the Grays Harbor community. We remain committed to Grays Harbor and are doing everything we can to reverse the course our industry has taken.”

—Cell Therapeutics (NASDAQ: CTIC) in Seattle cut 34 jobs, or about 28 percent of its workforce, leaving it with about 88 employees, as Luke reported last week. The move is connected to the biotech firm’s sale of its lone approved cancer drug, Zevalin. Cell Therapeutics has run dangerously low on cash. Two weeks ago, the company said it is closing its drug research center in Bresso, Italy, where it has 62 employees.

—Seattle-based Daptiv, which makes online project management software, cut about 24 positions two weeks ago, as reported by John Cook of TechFlash. The layoff leaves the company with about 100 employees. Daptiv was founded in 1997 (as eProject), and helps businesses manage their tasks, resources, documents, and portfolios.

—Spokane, WA-based General Dynamics Itronix, a maker of rugged laptops and mobile devices for field use, is closing its facility in Spokane Valley, which employs 353 people. The closure is effective April 24. The company has offices in Canada and Europe as well.

—Seattle-based Trubion Pharmaceuticals (NASDAQ: TRBN) cut a quarter of its workforce (about 25 jobs) two weeks ago, leaving it with a staff of about 75, as Luke reported. The move affects most areas of the company, and is part of a restructuring designed to invest in near-term opportunities such as a drug candidate for chronic lymphocytic leukemia. Trubion says the cuts will help it conserve enough cash to operate into the second half of 2010.

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The Automotive X Prize in Los Angeles announced today it has chosen its first 22 teams to compete for $10 million in prizes that will be awarded for developing super fuel-efficient vehicles (100 miles per gallon or equivalent is the nominal goal). Among this first wave of contenders are three Northwest teams: Bellingham, WA-based Avion; Kinetic Vehicles, based in Cave Junction, OR; and the Vehicle Research Institute at Western Washington University in Bellingham.

—Avion has built an aerodynamic, diesel-powered, ultra fuel-efficient sports car. The company is led by Craig Henderson.

—Kinetic Vehicles has developed MAX, a turbocharged diesel-powered roadster. Its fuel comes from petroleum, biomass, or straight vegetable oil. Jack McCornack leads the operation.

—Western Washington University’s Vehicle Research Institute (VRI) has developed a series of cars called Viking, which run on gasoline, electricity, or biomethane and compressed natural gas. The VRI was founded by Michael Seal in the 1970s and is now headed by Eric Leonhardt.

The Automotive X Prize, which is sponsored by Progressive Insurance, will kick off its competition next year, holding stage races in several cities. More than 100 additional teams have signed letters of intent to compete so far, according to the X Prize website. The winners are expected to be announced in 2010. “The technologies reflected in this first wave of Registered Teams are as diverse as the teams themselves, and we look forward to hearing more about their individual ideas in advance of the 2009-2010 stage race competition,” said Julie Zona, director of team development and relations for the Automotive X Prize, in a statement.

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Burnaby, BC-based NxtGen Emission Controls announced today it has closed a $15.4 million Series B round, led by Denver, CO-based Altira Group. Other investors included Itochu, an undisclosed Japanese auto maker, and return investors Yaletown Venture Partners, GrowthWorks Capital, BC Advantage Funds, and Polygon Financial Investments. NxtGen Emission specializes in “syngas” technology for reducing emissions and optimizing combustion of diesel, biodiesel, natural gas, and gasoline.

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With baseball’s Fall Classic about to begin (hats off to the Tampa Bay Rays), deals in the Northwest have continued to pick up. No blockbusters in the past week, but there was decent action in tech mergers and acquisitions, as well as funding of biotech and energy companies.

—Bob reported on the top 10 venture deals of the third quarter in the Northwest. Although the total amount of funding in the region is down, Seattle saw some large deals, such as Big Fish Games’ $83.3 million financing and AltaRock Energy’s $26.25 million round.

—GrapeCity, an international software firm with U.S. headquarters in Kirkland, WA, acquired Columbus, OH-based Data Dynamics for an undisclosed amount. The transition will begin in January. GrapeCity partners with Microsoft to make software tools and services for businesses.

—Seattle-based TrackSimple raised $2.5 million in Series A financing, led by Ignition Partners. TrackSimple makes a software platform that captures customer events, aggregating data almost in real-time.

—Luke reported on the dollar amount of the Imperium Renewables financing, which we reported earlier this month was being used to settle debts with the Seattle biodiesel maker’s creditors. According to the Seattle Times, which cited a regulatory filing, Imperium raised more than $18 million from its investors last month.

—Electro Scientific Industries, a photonics company based in Portland, OR, is merging with Middlefield, CT-based Zygo, a metrology and optics firm, in an all-stock transaction. The merger is expected to be complete in the first quarter of next year.

—Micronics, a Redmond, WA, maker of molecular diagnostics and monitoring tools, closed a Series C financing round led by the Southwest Michigan First Life Science Fund. Combined with a Series B round raised earlier this year, the deal brings $9 million in capital to Micronics.

—Bothell, WA-based Winshuttle, a maker of data-entry software for businesses, acquired ADAR, a French distributor of data-management tools, and launched a new office in Paris. Winshuttle’s French operations will provide sales and technical support to European customers.

—Seattle Genetics, a Bothell, WA, developer of targeted cancer drugs, received a milestone payment from Progenics Pharmaceuticals, as Luke reported. Progenics bought a license to the Seattle Genetics technology and has used it to develop a drug candidate that is in clinical trials for hormone-resistant prostate cancer.

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Imperium Renewables, the Seattle-based biodiesel maker, raised more than $18 million last month from investors to pay down some of its debts, according to this report by The Seattle Times that cites a filing with the Securities and Exchange Commission.

Greg reported a couple weeks ago that Imperium’s existing investors provided a cash infusion to settle debts with Societe Generale, lien holders, and unsecured creditors; the dollar amount wasn’t disclosed at the time. Imperium CEO John Plaza said in a statement that he hoped the recapitalization would help the firm “resume operations as soon as possible.” The company runs one of the largest biodiesel refineries in the U.S., a 100-million-gallon-a-year facility in Grays Harbor, WA.

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Heading into the baseball battles of October (go Red Sox), the dealflow is really picking up. In the past week, the Northwest has seen deals in gaming, mobile software, healthcare, genomics, and biofuels.

—Oberon Media, a maker of casual games and gaming platforms that is based in New York but has a publishing arm in Seattle (I-Play), raised $20 million from Infinity Equity, based in Hong Kong. The deal is seen as an effort by Oberon to break into the Chinese market, and a way for Infinity to get into gaming.

—The Institute for Systems Biology, based in Seattle, has formed a partnership with Mountain View, CA-based Complete Genomics to sequence the genomes of 100 people next year, and another 2,000 people in 2010. As Luke reports today, Complete Genomics has a different approach to the market, offering genome sequencing as a service.

—TriQuint Semiconductor, based in Hillsboro, OR, won a 21-month, $4.5 million contract from the Office of Naval Research to make integrated circuits and amplifiers for radar and communications applications.

—Imperium Renewables, the struggling Seattle producer of biodiesel fuel, received a new investment from its existing investors to help settle its debts with Société Générale and other creditors. Imperium hopes the recapitalization (the amount and sources were undisclosed) will help it resume operations as soon as possible.

—Dexterra, a Bothell, WA-based maker of mobile management software, closed a $21.5 million round led by New Enterprise Associates. Previous investors Canaan Partners, Intel Capital, Mesirow Financial, Motorola Ventures, and Sigma Partners also participated.

—NeuroCom International, a Clackamas, OR-based maker of tools for assessing and rehabilitating patients with balance and mobility disorders, is being acquired by Natus Medical, based in San Carlos, CA. The deal is worth $18 million.

—Issaquah, WA-based Digini, a maker of development tools for Windows and Xbox games, closed a round of funding from California Technology Ventures. The amount was not disclosed.

—Bezos Expeditions, the venture organization of Jeff Bezos from Amazon.com, has made a Series A investment in ZocDoc, a New York startup that helps people find doctors and book appointments online. The amount of the investment was not disclosed. Last month, ZocDoc announced it had raised $3.3 million from the likes of Khosla Ventures.

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Back in August, we wrote about the ongoing struggles of Imperium Renewables, the Seattle-based biodiesel fuel producer that canceled its $345 million IPO, went through several rounds of layoffs, and lost a key contract with Royal Caribbean. Today, Imperium announced a recapitalization involving its existing investors. The majority of the new investment (the value and sources of which were not disclosed) was “used to satisfy its secured project lender, Société Générale, lien holders and unsecured creditors,” according to a company statement. Imperium is also using an independent business-debt restructuring firm to “assist in negotiating with its creditors to settle its remaining creditor obligations to leave the company with sufficient capital to resume operations.”

Given Imperium’s financial problems in the past year, something had to give. Spokesman John Williams said in an e-mail that Imperium “is focused on managing through the challenging time for the industry and positioning the company for long term success.” Imperium’s investors include Technology Partners and Nth Power, who led a $214 million Series B round in February 2007.

Today’s recapitalization is part of a broader restructuring plan to get Imperium back on its feet. “This funding is a significant step in the process we set forth in January to turn this company around, but we still face hurdles as the amount of funding is limited,” said John Plaza, founder and CEO of Imperium, in a statement. “With this recapitalization and cooperation of our creditors, we hope to resume operations as soon as possible.”

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Targeted Growth has a business strategy that leads straight to your morning bowl of cereal. The Seattle-based biotech company is taking its technology to the market with a high-yield seed crop that can be turned into biodiesel, but it sees a bigger future in boosting production of what it calls “small grain cereals,” the type that end up in those pricey boxes marketed by Kellogg’s and General Mills.

This struck me as surprising when I heard it during an interview with Targeted Growth president David McElroy and Don Panter, the senior vice president for crop development. I met them after they spoke on a panel yesterday at the Biotechnology Industry Organization’s Pacific Rim Summit on Industrial Biotechnology and Bioenergy in Vancouver, B.C.

“We’re a seed company, and we plan to sell to growers,” Panter says. “Ultimately it ends up in your Rice Krispies.”

In his presentation on the panel, Panter didn’t cover any of that. He focused instead on developing more efficient raw material for biofuels, known as “feedstock” in industry lingo. Targeted Growth’s technology, Panter explained, modifies a couple of plant genes known as REV and KRP, which has been shown in field trials to boost yields of camelina by more than 20 percent. The company is now working to commercialize modified camelina, a member of the mustard family. It’s a high-yield source of raw material for biodiesel refiners, and can be grown on marginal agricultural lands in the Northwest and Canada with existing farm equipment. That product is actually going through a joint venture called Sustainable Oils, which Targeted Growth has established with Houston-based Green Earth Fuels.

Apparently, this is all just a beginning. Targeted Growth hit an “inflection point” in the fall of 2007 when it got results in from a real-life field trial (as opposed to a controlled greenhouse environment) that showed it could boost crop yields by more than 20 percent. “A 1 to 5 percent improvement on yield is pretty significant, so this is significant,” Panter says. The company parlayed that result late last year into a partnership in which it licensed rights to use its gene-modification technology to one of the top global seed companies, for “major row crops,” McElroy says.

Targeted Growth can’t say yet who the partner is, the deal terms, or which crops are involved, McElroy says. But the technology has also proven itself capable of raising yields as much as 35 percent in a second seed crop, and the unnamed partner is conducting a field test in a third crop. With multiple opportunities showing up, the company has to decide which ones to license to big players, and which ones to develop further itself.

“We’ve carved out small grains as an opportunity we plan to realize for Targeted Growth and its investors,” Panter says.

The investors are certainly a big piece of this equation. Targeted Growth has raised $32 million in venture capital since May 2006, from investors that include Capricorn Management, AllianceBernstein, and Seattle-based investors Integra Ventures and WRF Capital. The company is currently trying to raise much more. It wants to use the cash to double in size, from 50 employees to about 100 in two years, McElroy says. The plan is to add more expertise in product development, build out new facilities to make seeds and package them, run more field trials, and add two new R&D facilities in Seattle and Tennessee.

Targeted Growth, founded in 1998, got started to build on work at the University of Washington and Fred Hutchinson Cancer Research Center, where scientists (including Xconomist Jim Roberts) studied the REV and KRP genes. If you delete them in mice, the mice grow bigger, McElroy says. The same principles are at work in plants, he says, and can be broadly applied to most any crop where the seed is the product, he says.

McElroy knows a bit about how to deal with the big seed companies, too, being a veteran of DeKalb Genetics and Pioneer Hi-Bred International, a pair of big-name agribusiness companies in the Midwest. Panter joined the company after a six-year run as chief technology officer of Emergent Genetics, a Boulder, CO-company that was acquired by Monsanto in 2005.

I got the sense that a few of the companies at the BIO event have had the air let out of their bubbles recently, with quite a few half-hearted references to “hockey stick” projections on future revenues. These guys sounded more confident, yet then again, they didn’t promise that the financing was coming imminently. “We’re not a one-trick company,” Panter says. “We’ve got several shots on goal.”

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This is the last of my articles taking cleantech investing to task sector by sector (keep the hate mail coming, hippies!). The next few will focus on some areas I really like, including storage, solar thermal, water, and others. But first, a bit more constructive bludgeoning.

This is a bit of a “two for one special” looking at biofuels and wind—two forms of clean energy poised to wreck the environment they are purported to save. These dual titans of uselessness are powered by hype and corporate sugar daddies using influence on Capitol Hill in ways that would make even oil company executives blush. The VC community has avoided wind pretty well (with PE and traditional investment firms more than picking up the slack) but man, they have got quite the teenage crush on biofuels.

I’ll note from the top that some of these arguments are the very same ones I have with solar, and they apply to some extent to all new energy technologies. They’re about the cost of potential entry, if you will.

First wind, which has been getting a lot of attention lately, partly due to those late-night TV commercials from Texas oil baron T. Boone Pickens (who seems to have taken the place of Ron Popeil and the rotisserie-oven ads I so love). Pickens has a huge investment in wind and a plan to replace natural-gas-produced electricity that’s so ambitious that even the Sierra Club’s number crunchers find it unrealistic.

Wind power is rather straightforward: build a big propeller and put it up on an even bigger pole. The spinning of the blades generates 1 to 2 megawatts of power per turbine; wind farms generally consist of hundreds of turbines. But behind this simplicity is a highly engineered and heavily maintained system. Much like power from solar photovoltaic cells, wind power has serious downsides—such as being ugly, land-intensive, hugely dependent on subsidies, and unreliable.

How unreliable? Current industry estimates claim wind “can” work 30-40 percent of the time over the course of a year. But actual output is all that matters, and real-world experience shows that annual outputs of 15 to 30 percent of capacity are more typical. The wind just doesn’t blow as often at the right speed as a grid power system needs. The Searsburg wind farm in Vermont, for instance, produces no electricity at all 40 percent of the time.

Wind farms also require huge amounts of land, which is then rendered fairly useless for other purposes. Some wind farm proponents counter this by noting that monstrous wind turbines are actually a tourist attraction. Yes, and what family vacation isn’t built around a three-day drive out to rural Texas to watch giant blades create noise, vibrations, and seizure-inducing strobe effects, while slicing up bats and birds in a manner that would warm the hearts of the Khmer Rouge? Screw Disneyland, kids, we’re going to Uncle Boone’s Wonderiffic Wind Farm for vacation!

And more often than not, wind farms are built in pristine wilderness, on ecologically fragile ridgelines—places that, without the wind farm, might actually be attractive hiking or nature-observation areas. Getting the leviathan-like wind turbines out to these remote and beautiful locations requires huge trucks running over new roads ripped through the forest or prairie.

And at the beginning of this whole circle of destruction, don’t forget that wind turbines need to be manufactured. Football-field-length propellers don’t grow on trees. As with solar, it takes lots of energy to power those factories, which also use huge amounts of mined metals, petroleum-based plastics and lubricants, and tons and tons of concrete. And you ‘d be hard pressed to find dirtier industries than steel, plastics, and cement production and mining.

I know what you’re saying: “Well, every new energy source is going to need manufacturing and industrial development.” I agree, but the point is that we shouldn’t forget to factor that into the overall environmental impact. The oil, gas, and coal industries are already built out. It’s just like looking at the overall sustainability of buying a new Prius, when keeping your five-year-old Celica well tuned and on the road is actually better for the planet.

When you look at the portion of our energy requirements covered by wind power—less than 1 percent—it ends up being the most heavily subsidized of all energy sources. Ed Feo of Milbank Tweed recently noted that two-thirds of the economic value of wind projects come from tax breaks and subsidies from the federal government. And he was being generous, not adding that a wind farm operation can get another 10 percent in breaks from the coffers of state governments. That ’s quite a racket.

It may not surprise you to learn the wind industry as we know it was structured by a little company called Enron (Enron Wind is now GE Wind, by the way). And investors know it’s just a giant subsidies racket. Navigant Consulting, which advises on renewable energy technology, estimated that investments in wind and solar power in 2009 would amount to $26.6 billion with government handouts, but would fall to $7 billion without them. Ultimately the cost of these tax breaks and subsidies shifts costs from wind farm owners to ordinary taxpayers and electric customers.

And the biofuels industry. Urgghh! It’s little more than a scam perpetrated by …Next Page »

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Barack Obama probably doesn’t have to worry much about the cleantech vote. A handful of renewable energy entrepreneurs couldn’t say enough good things about the Democratic presidential candidate in a press conference this morning at the Propel Biofuels station in Seattle’s South Lake Union neighborhood.

The cleantechies gave me a series of blank stares when I asked if they know a single soul in the renewable energy industry who’s supporting Sen. John McCain, the Republican candidate. They were brought in to the event by the Obama campaign, which is advocating a 10-year, $150 billion plan to boost alternative energy. The plan includes a goal of getting 1 million plug-in hybrid cars on the road by 2015, and aims to generate one-fourth of the nation’s electricity comes from renewable sources by 2025.

“I’m an independent, I’ve voted for Republicans and Democrats in the past,” said Michael Weaver, CEO of Redmond, WA-based Bionavitas, a developer of algae-based biofuels. “I think the key issue this election is energy security, both in terms of the economy and the military. The strongest candidate is clearly Senator Obama.”

Before the event started, I chatted with Imperium Renewables CEO John Plaza, who has been pretty tight-lipped about recent struggles with his own company, including layoffs. He didn’t want to say anything more about that situation, but he livened up on the subject of Obama’s energy plan.

“You and I have never seen an aggressive, forward-thinking perspective on energy like this from a presidential campaign,” he says. “I just turned 43, so I’ve been following politics for 20 years. You look at Reagan, he took the solar panels off the White House. The first Bush never talked about alternative energy, it was about securing petroleum. Clinton talked about it, but oil was at record lows of $15 to $20 a barrel in the 1990s. Now we realize we have a real problem.”

During the press conference, Plaza turned a bit more combative, saying with McCain, “all he gives are platitudes and generalities.” He criticized the Arizona Senator’s support for more offshore oil drilling. (Nobody mentioned that Obama also is willing to support some more offshore drilling, in addition to conservation and investment in alternatives.)

There was some irony in the setting of the press conference, too. It was hard to hear many of the speakers, who stood at a podium between a pair of biodiesel pumps. They were drowned out by the noise coming from a lot of conventional diesel-powered dump trucks rumbling along Valley Street to construction sites.

Just when I started wondering if high prices of renewable fuels are sinking consumer demand, and possibly dragging down enthusiasm for Obama’s energy plan, a sign emerged. Just as I was interviewing Propel Biofuels CEO Rob Elam about how business has gone since the station opened in June, a customer in a Mercedes SUV pulled up for some biodiesel.

After some brief chit-chat with the customer, Elam pointed out that his 20 percent biodiesel blend fuel, called B20, was selling for $4.78 a gallon, about a dime cheaper than a conventional diesel station nearby. He didn’t disclose sales figures, but said they are climbing every week. I bet Obama’s people are keeping their fingers crossed that the trends stay that way through November, which will make it a little bit easier to fuel the American public’s fire for a big new alternative energy plan.

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It’s been a rough year for Imperium Renewables, the Seattle-based refiner of biodiesel fuel. Back in December, CEO Martin Tobias abruptly resigned and left the board, just weeks before the company announced it was canceling plans for a $345 million IPO and reducing its corporate work force. Then last month, Imperium went through another round of corporate layoffs. Now in the past week, Royal Caribbean, Imperium’s largest customer, has confirmed that its contract with the biodiesel maker ended as of July 1, as reported in the Seattle P-I.

What happened? Imperium was once the crown jewel of Seattle cleantech, having raised a whopping $214 million in Series B funding in February 2007, led by investors like Technology Partners and Nth Power, both based in the Bay Area. Renewable biodiesel, made from vegetable oils and waste oils, was touted as a way to reduce both emissions and our dependence on petroleum. Since then, the company has faced protests by a Seattle environmental group over its possible use of palm oil from Malaysia, and some criticism in the business community about its management in the wake of Tobias’s departure. (Reached for this story, Tobias said he couldn’t comment on Imperium.)

I put in a call to the company to get its side of the story. “There’s a lot of things being written and speculation,” said Imperium spokesman John Williams in an e-mail. “But Imperium is solely focused right now on getting through some big challenges facing them as well as the industry as a whole.”

Those challenges would seem to include cash flow, high production costs, and lack of consumer demand. Michael Butler, chairman of Seattle-based Cascadia Capital and a leading cleantech supporter, places the blame for Imperium’s woes squarely on the biodiesel market. “The cost of input—primarily soy and corn—costs too much given the price they get for their biodiesel,” says Butler.

Another energy expert is more blunt about what it all means. “The biodiesel market is in trouble,” says Jesse Berst, managing director of GlobalSmartEnergy, a Redmond, WA-based consulting firm. “The only long-term future for biodiesel is for 18-wheelers, hybrid vehicles, and maybe airlines.” Berst, an Xconomist, says questions remain about the current technology’s conversion efficiency and the “food versus fuel” debate—whether using crops for biofuels may harm the global food supply. “It’s a first-generation technology. You’re squeezing oil out of a plant, versus gasification [which is more efficient],” he says. “I never believed in first-generation biofuels.”

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Imperium Renewables, the Seattle-based maker of biodiesel, has made job cuts in its corporate staff. The news, first reported in the Seattle P-I, was confirmed today by Imperium president John Plaza, through a spokesman. The company didn’t immediately disclose how many people were let go, or how many remain. The P-I story, citing an anonymous source, said only a handful of employees are left at the corporate office, while the company’s commercial refinery in Grays Harbor, WA continues to operate.

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Not in my back yard. Just kidding, always wanted to say that. This morning I stopped by the media launch of Seattle-based Propel’s new biodiesel station on the corner of Westlake Avenue and Valley Street, which becomes Broad Street—just blocks from my home in South Lake Union. (In fact, I can see the green canopy from my living room.) The station is Propel’s sixth biodiesel fueling facility in Washington, but it’s the largest, and the first one dedicated to only biodiesel—no regular diesel. It officially opens for business tomorrow.

Biodiesel is derived from crops such as soybeans and canola, as well as recycled cooking oil. It is touted as being much better for the environment than petroleum-based diesel and gas, but it’s not without controversy—such as the issue of whether it contributes to rising food prices. This morning, Propel founder and CEO Rob Elam deflected the criticism, sticking to the theme that relying on petroleum is the real problem.

Elam pointed out that petroleum is up to $142 a barrel today, an all-time high. Meanwhile, the two 5,000-gallon biofuel tanks behind him spoke to the benefits of biodiesel, with the following stats printed on them: 1,126,000 pounds of carbon dioxide saved in total, 1,496 barrels of oil displaced, and the carbon equivalent of 87,647 mature trees saved annually. Regular cars won’t run on the bio stuff, but any diesel vehicle will.

Propel seems to have picked this location carefully—a very busy intersection in what Elam calls the “most sustainable neighborhood” in Seattle. Like a lot of residents, I don’t own a car here and I don’t plan on buying one anytime soon—not even a fancy diesel car that can run on biofuel (the Jetta model in the photo above will be available in August). But with all the construction and development going on in the neighborhood, it’s a good bet the station will get its share of business, as long as biofuel prices stay competitive with regular diesel. “This is an industrial area, and we want to fuel those trucks,” said Elam.

I couldn’t help but notice that this sustainable neighborhood with the “greenest” drivers also has a drive-through espresso store, right across the street from the Propel station (see right—photos courtesy of Mara E. Vatz). Let’s keep our priorities straight…

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Tired of city rankings yet? OK, I’ll be brief. So the July/August issue of Men’s Health, out this week, ranks Seattle #1 in “most environmentally conscious” drivers. Not that surprisingly, the Northwest did well in the survey overall: Portland, OR, and Spokane, WA, also made the top 10. The analysis of 100 American cities took into account gas consumption, annual mileage, vehicle efficiency, air quality, and mass-transit usage.

My colleague Luke and I have certainly done our part—we both recently ditched our cars. But how are local companies doing on greening up transportation, energy, and other technologies?

Startup activity in the cleantech space is certainly one good measure. According to DowJones VentureSource data for 2007, Washington state came in third in VC investments in cleantech (behind California and Massachusetts), with $175 million. It was dominated by a few big Seattle-based company deals: biodiesel maker Imperium Renewables raised $117 million in equity, but canceled its IPO at the end of the year; Targeted Growth, an agricultural biotech company, raised $22 million; Powerit Holdings landed $7 million; and Propel Biofuels raised $4.75 million.

(For a sense of what a larger cleantech cluster looks like, see the MIT Entrepreneurship Center’s energy map of New England here. Of course, it takes a lot of driving to visit all those companies.)

There is also some anecdotal evidence that local employers have contributed to the greening of Seattle. Microsoft and a few other companies run employee shuttles throughout the area. And roughly 70 percent of biotech giant Amgen’s staff in Seattle use something other than a single-occupancy vehicle to commute, says company spokesperson Carol Pawlak. Amgen runs a shuttle service from downtown, subsidizes bus and ferry transportation, and arranges van pools.

Xconomy doesn’t do that yet, but at least Luke and I will be getting our exercise.

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