Biggest Surprises:

• How risk adverse most VC’s are. I was expecting “bigger thinking” and more insight into energy and energy efficiency issues.
• How little debate there is in the media regarding global warming and the cause/effects: many automatically believe that the earth is getting warmer and humans are the cause, even though measured data strongly shows that neither may be true.
• How little regard most politicians have for the cost of various technical approaches to improved efficiency. The market always votes with dollars and low cost solutions almost always win.

Top Things to Look for in the Coming Year:

• Will energy “myths” continue to prevail or will economic realities begin to set in?
• How long will it take for “economic gravity” begin to sort out the energy alternatives?

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After giving my best attempt at an objective summary of Proposition 23 to a colleague, he asked rhetorically, “How can something like this even make it onto the ballot?” He was, of course, familiar with the process that allows any proposition that gathers enough signatures to make it to the ballot in, but the question was really addressing a more fundamental issue: how can something so transparently bad for California even make it to the ballot?

Proposition 23 is the legislative version of the flickering neon sign that reads “lower your standards for global environmental quality to protect state oil interests.”

To recap, Proposition 23 suspends AB 32, otherwise known as California’s Global Warming Solutions Act of 2006, until the state unemployment drops to 5.5% for four consecutive quarters (otherwise known as a year). AB 32 requires that California lower its overall greenhouse gas emissions to 1990 levels by the year 2020—an ambitious goal that may require certain sacrifices. However, the issue requires further investigation.

The author of this proposition is the linguistic equivalent of David Copperfield. First, the wording may lead one to believe that climate legislation and unemployment are somehow correlated. The proposition even seems to imply that climate legislation is causing unemployment and removal of the legislation may lower the unemployment rate.

This misdirects the conversation from the real issue, which is that the oil industry is attempting to self-regulate. The Yes side argues 23 would create a million and a half jobs. I argue that 23 would destroy an entire industry—the nascent clean technology business that so many courageous startups have begun to explore—and that any initial economic uptick would be short lived. Who is right? It doesn’t matter. The conversation has been moved to the only area where proposition 23 actually makes sense: the imaginary.

Proposition 23 will kill the Global Warming Solutions Act for a period of time. It is, literally, a proposition to suspend a solution. But the oil industry is not merely content to delay implementation of clean air standards in California. They would prefer to prevent it altogether, which is where Proposition 26 comes in.

Proposition 26 would cripple AB 32 with legislative bureaucracy, potentially rendering it ineffective. Proposition 26 is as damaging as 23 to the clean technology industry and air quality standards. Yet because of its subtle and often sleep-inducing wording, much of the fight has been focused on 23.

If Proposition 23 is all about flash, Proposition 26 will be the legislation to pull a quarter from behind your ear. Magicians often use sleight of hand techniques to misdirect the attention of audience participants in order to trick them. Proposition 23 may be the distraction, while 26 accomplishes the same goals right from behind our collective ear. Californians should ignore the oil industry illusionists and vote no on both.

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Yesterday we told you all about Recurve, a San Francisco home energy auditing and retrofitting startup whose founder argues that before energy-conscious homeowners put solar panels on the roof, they should focus on fixing what’s under it—poor insulation, leaky ducts and windows, inefficient HVAC systems, and the like. But let’s assume you’ve done all that. What’s next? Here in California, there’s an array of companies working to make it far easier and more affordable to install electricity-generating solar panels on your home.

One of the most innovative and fast-growing startups in this industry is Oakland, CA-based Sungevity, which is probably unlike any cleantech company you’ve heard of. The company doesn’t have its own installation workforce, and unlike competing firms such as SunRun, it doesn’t have “power purchase agreements” under which homeowners buy electricity from the company. What it does have is software. It’s got applications that allow technicians to peer down from the sky (via Google Earth-style satellite photos) and figure out exactly how many solar panels will fit on your roof, then generate a project estimate. It’s got applications to automate the sales process, and it’s got applications to cut through the red tape around permitting for solar installations.

In effect, Sungevity is a new low-overhead, high-efficiency middleman in a business that’s long been a cottage industry, dominated by small solar installers who have to roll a truck every time a potential customer requests an estimate. (In many of these respects, Sungevity is similar to Recurve, which, as I explained yesterday, is also using software to systematize and scale up a cottage industry—in its case, home energy retrofitting.)

Danny Kennedy, Sungevity’s founder, argues that simplifying and automating the solar installation process is the only way to bring this form of renewable power to the mass market. Together with co-founders Andrew Birch and Alec Guettel and chief financial officer Charles Ferer, he’s built a business that’s collected $9 million in venture backing and is set to grow from $3 million in revenue in 2009 to nearly $30 million this year, with no end in sight. The core of the business model is the 10-year “solar lease,” an idea Ferer brought with him from former employer Solar City. In return for assigning solar tax credits and rebates to the lender—Sungevity and its financial partner US Bank, in this case—homeowners get to install solar panels for only about half of the actual cost of equipment and labor, and they can pay for the project over the course of 120 months.

Sitting down with Kennedy to talk leases and rebates and software is an unusual experience, given that his background isn’t in the energy business at all, but in environmental activism. A native of Australia, Kennedy is a 12-year veteran of Greenpeace, where he started out in the 1990s working to block oil projects in Africa and went on to run the organization’s California Clean Energy campaign. That campaign helped to bring about Governor Schwarzenegger’s $2.8 billion California Solar Initiative, under which the state is providing cash rebates of $1 to $2 per watt for solar photovoltaic installations. (A typical home installation might amount to 3 to 10 kilowatts.)

Those rebates are a big part of what’s making programs like Sungevity’s solar leases affordable, and are one of the reasons Kennedy and co-founders decided to build their business in the Bay Area. Another is the population’s openness to new ways of doing business: “If there is anywhere that’s going to be comfortable adapting to Internet commerce models [for solar installation], it’s California,” Kennedy says.

Our look at Sungevity comes in the form of an extended Q&A. In Part 1, below, Kennedy talks about Sungevity’s business model and technology, and describes how the installation process works. In Part 2, coming tomorrow, he talks about how he made the leap from Greenpeace to energy entrepreneurship, how Sungevity plans to scale up, and how the company’s work fits into global efforts to reduce carbon emissions and blunt the effects of climate change.

Xconomy: What is the mission of Sungevity?

Danny Kennedy: The big picture mission is to take solar to scale. Which I’m sure every solar entrepreneur says they want to do, but our vision is to do it in the residential market, which is ultimately the highest value market for solar electricity. Finding a scalable way to deliver solar electricity to residential customers in middle America is the best chance to make large profitable ventures, which will in turn scale the production and consumption of solar itself.

If you can capture developed-country, grid-connected markets, such as the wealthy German, Japanese, or California markets, it will drive solar production in … Next Page »

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All of the research in the world will be unable to mitigate the potentially devastating impact of climate change without a plan that brings measurements into a coordinated operational system. That system must enable accurate change forecasts, must monitor compliance with emission restrictions, and must verify that emission restrictions fulfill their purpose.

While the Unites States and other nations have taken initial steps towards taking Global Climate Monitoring (GCM) into the operational realm, much additional progress is needed to avoid the economic and social disruption that climate change could cause.

Potential effects include sea rise and more severe storms that would impact populated coastal areas and island nations, drought in areas that supply much of the Earth’s food, greater rainfall in flood-sensitive areas, as well as a spread in the habitat range of disease-carrying insects. More storm damages, increased cost of food, and mass, climate-induced population migrations might be some of the consequences.

Much scientific research is being done to better understand the following important effects: increases in the atmospheric levels of greenhouse gases; changes in sea temperature and acidity conditions; shifts in land hydrology and biota conditions; rates of loss of global ice mass. Space, air, sea, and land-based observational assets are applied to collect climate data to support the research. In parallel there are numerous efforts to development sophisticated climate models. The current goal is to provide a basis for better understanding climate change and to determine to what degree climate change is driven by human activity rather than natural cyclical phenomena.

Most of the climate change research efforts to date have been pursued as a scientific enterprise. Specific issues or paths of inquiry are identified by researchers, and resources to sponsor applicable investigations and sensor platforms are competed. The result is many one-of-a-kind studies, each of finite duration that each help to address scientific questions along a specific paths of inquiry. Furthermore, the collected data is often not made widely available, and is stored in a variety of formats that are not mutually compatible.

The challenge now is not just to understand the causes of climate change, but to track its primary drivers to enable prediction, adaptation, and possibly mitigation. This will require continuous measurement, over many decades, of a variety of specific parameters. It will require sharing and cross-comparison of resulting large databases to account for the integrated meaning of all the … Next Page »

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Thanks to everyone who made it out to Babson College for the 2010 Xconomy Summit on Innovation, Technology, & Entrepreneurship! We had a great crowd, representing all slices of the innovation community here in New England. And we heard some new, off-the-cuff perspectives from some familiar faces, as well as talks from emerging companies and organizations that are making a splash in healthcare information technology, medicine, startup investing, personal computing, smart energy, and much more.

A top 10 list isn’t enough to capture all the highlights. So here are a dozen takeaways the Xconomy team has from the day, in no particular order.

—Everything I need to know about dating I learned from oneforty founder and CEO Laura Fitton at our Angel Tsunami panel, where she talked about the tribulations of raising early stage funding. “Angel investors are like dudes,” she said. That was a nod to the flakiness of investors who committed to giving her cash but then disappeared completely before the checks ever made it into her hands. Here’s another parallel between investors and boyfriends, she said: “An investor who’s interested in you will act really interested in you,” she says. So if he’s not calling you and is hard to get a hold of, he probably wants no part of the deal.

—Those at our State of New England Biotech keynote chat didn’t seem disturbed by the rash moves made by life sciences stockholders. “What we’ve learned at Alkermes is that volatility is very valuable. So people who buy our stock low have the opportunity to sell it high—again, again, and again,” said company CEO Richard Pops.

—The energy industry is experiencing a bubble just like Internet companies did—and it’s called global warming, our keynote speaker Bob Metcalfe said. How does he know? “Al Gore and I inflated the Internet bubble together, and he’s back,” says Metcalfe, the inventor of the Ethernet and a general partner at Polaris Venture Partners. He also said solving the energy crisis won’t reduce the amount of energy consumed: “We are going to be using more energy, clean and cheap energy in squanderable abundance, if the Internet is any guide.”

—Xconomy CEO Bob Buderi sang a song to the tune of Adam’s Sandler’s “The Chanukah Song” on how the New England innovation ecosystem stacks up with the Bay Area. He also … Next Page »

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After 40 years of observances, you probably know that April 22 is Earth Day. But you may not have known that tomorrow, June 19, is SolarDay. Billed by its organizers as a chance for alternative energy activists and solar energy entrepreneurs to highlight the solar technology options and government rebate and incentive programs available to consumers and businesses, the event was hatched last year in San Francisco and is expanding this year to nearly 30 cities. If it lives up to its founders’ hopes, at least 100 cities will be hosting SolarDay events in 2011.

“The biggest mission is to bring maximum exposure of solar programs to consumers,” says Addison Huegel, executive director of SolarDay. The San Francisco resident has a UC Berkeley physics degree and a background in high-tech public relations and marketing, and launched the effort in June 2009.

“Earth Day is for everything from organic gardening to recycling to batteries,” he says. “This is meant to have one day that’s focused on solar energy. There are all of these federal, state, and city programs now available to spur the industry along, and there really was no day to generate awareness of that.”

In San Francisco, the main SolarDay event will be an open house at Dosa Restaurant, the highly rated Fillmore Street destination for South Indian cuisine. Dosa is a “super-green” establishment whose owners hired Berkeley, CA-based Sun Light & Power to install a closed-loop solar water heating system. Over tea and cookies, says Huegel, visitors will have a chance to learn about incentive programs that can defray the cost of such systems.

There will also be SolarDay events in 11 other California cities, including Alhambra, Chico, Fort Bragg, Hayward, Little River, Redding, Richmond, Riverside, Roseville, San Diego, and Santa Rosa. Five cities in Arizona are participating, and SolarDay events are planned as well in Alabama, Colorado, Florida, Illinois, Louisiana, Michigan, New Mexico, Ohio, and Tennessee. There’s even an event in Cairo, Egypt: a garden exhibition, concert, and screening of the NOVA episode “Saved by the Sun” hosted by Donya Desee, an environmental events management company that also operates the website Eco Options Egypt.

As an energy source, solar is caught in the same bind as many other alternative energy options: capturing it to make electricity or hot water is still more expensive than burning coal or natural gas (assuming, of course, that you don’t count the costs of minor externalities like global warming). That means the industry needs subsidies to survive—and a growing number of incentives are available. “There are a lot of groups, especially the federal and state governments, realizing that … Next Page »

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Quite a few clean energy companies around Boston have a stake in the outcome of the international climate change talks that start this week in Copenhagen, Denmark. If nations set more aggressive goals for greenhouse-gas emissions cuts, after all, they’ll have a greater need for technologies to reduce their carbon emissions.

But only one local cleantech executive, as far as Xconomy can determine, is actually going to Scandinavia to participate in the discussions. It’s Christina Lampe-Onnerud, founder and CEO of Boston-Power, which makes green, longer-lasting batteries for HP laptops and other devices.

As a member of a non-governmental initiative called The Road to Copenhagen, Lampe-Onnerud attended climate change discussions in Brussels, Belgium in two years ago and Oslo, Norway, last year. She’s now heading to her native Sweden to take part in the group’s final conference in Malmö, just across the Oresund Strait from Copenhagen, on December 8 and 9.

Boston-Power is one of 13 corporate sponsors of the Road to Copenhagen meeting, alongside much larger companies such as Cargill, Procter & Gamble, and Whirlpool. Lampe-Onnerud, who trained as a chemist, says her most important job at the Malmö meeting will be to “bring some honesty to the scientific debate” around different options for dealing with climate change. “I have made it one of my personal and professional commitments to be a citizen of the Earth, and this is something I know something about, so I think I should volunteer some time,” she says.

The Road to Copenhagen group—an initiative of the Club de Madrid, a group of former presidents and prime ministers—consists largely of politicians, business leaders, and scientists who are not part of the formal negotiations at the United Nations Climate Change Conference. (That meeting starts today in Copenhagen and continues through December 18.) The group plans to develop a communiqué that will be delivered to representatives at the UN meeting. Its last communiqué, issued just before the 2008 UN climate change meeting in Poznań, Poland, called for a halt to further increases in greenhouse gas emissions globally by 2020 and a 50 percent reduction below 1990 levels by 2050—goals that are far more ambitious than the emissions caps set out by the Kyoto Protocol in 1997.

Developing a more aggressive, legally binding treaty to take the place of the Kyoto accord—which expires in 2012—was the original goal for the Copenhagen conference. But the U.S. Congress’s failure to pass energy legislation this fall committing the United States to emissions reductions means that President Obama is going to Copenhagen largely empty-handed. Many other nations have also been dragging their feet on climate legislation. In recent days, both the U.S. and China, the world’s leading emitters of greenhouse gases, have set informal reductions targets, but it’s too late for Copenhagen: UN negotiators have already scaled back their goals for the meeting to achieving an interim pact, with more negotiations over a binding agreement to follow in 2010.

Still, Lampe-Onnerud is upbeat (as always—she is perhaps Boston’s most cheerful technology CEO). “I know that there is disappointment in the setup [for Copenhagen], but I am going because I still think the time is now,” she says. “We have to take action, because the climate change threat is more severe than many want to depict. I will go in with a sense of urgency, and with the discipline of a measurable, milestone-driven agenda.”

One item on Lampe-Onnerud’s agenda will be to try to quash schemes for large-scale climate modification to dampen or … Next Page »

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Sapphire Energy has tried to maintain a relatively low profile since it established its headquarters in San Diego—especially since last fall when the media seized on reports that Bill Gates’ Cascade Investment had joined a $100 million secondary round of venture funding for the algae biofuels startup.

So when Sapphire opened its San Diego headquarters for a public tour during the Algae Biomass Summit that was held here earlier this month, I jumped at the opportunity. The venture-backed company maintains a 70,000-square-foot facility on La Jolla’s Torrey Pines Mesa, and now has about 120 employees. The company’s labs look like a lot of other biotech labs in San Diego, aside from all the gyrating machines with flasks full of gently swirling emerald-green fluid. But there were two particularly interesting factoids about Sapphire that I learned during the tour.

The first was ironic: Sapphire officials explained that algae consumes 13 to 14 kilograms of carbon dioxide to produce a gallon of green crude oil, which is roughly equivalent to conventional petroleum-based crude—and just as suitable for making gasoline, diesel, or jet fuel. This is a good thing, as the fast-growing algae helps reduce atmospheric CO2.

So what’s ironic? Sapphire and other algae biofuel companies have to pump carbon dioxide into the algae they grow in their laboratories. Moreover, Sapphire spokesman Tim Zenk says one of the big problems that Sapphire is facing these days is getting enough CO2—at an affordable price—to support the company’s algae biofuels research and development efforts. The greenhouse gas is so crucial that Zenk says it limits the growth of algae if it’s in short supply.

Once algae-based crude is refined into a fuel like gasoline, though, it produces CO2 as a byproduct of combustion—just as any engine that burns gasoline, diesel, or aviation fuel produces greenhouse gases. Nevertheless, the argument is that algae biofuels are better for the environment because algae absorbs so much CO2 while it is growing, Sapphire officials estimate that algae-based fuels represent a 70 percent reduction in CO2 gases on a life-cycle basis compared to gasoline, diesel, or aviation fuel made from petroleum-based crude oil.

In the laboratory environment, however, CO2 gas is a valuable commodity. “You can buy carbon dioxide on the market,” Zenk says. “It’s heavily refined and used mostly by the food and beverage industry.” (The beverage industry uses dissolved CO2 to put the bubbly fizz into carbonated sodas.) But algae doesn’t need purified CO2. In fact, Zenk says the gas that goes up the smokestack at most utility power plants is 10 to 15 percent CO2—which is ideal for algal growth. As a result, some startups developing algae-based biofuels intend to … Next Page »

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Microbiologist Larry Feinberg has dug into piles of waste from paper factories and explored hot springs in the West for microbes that he calls “tough bugs,” because of their ability to thrive in adverse conditions. The fierce bacteria are now shipped to the new labs and headquarters of Mascoma, a developer of cellulosic ethanol, in Lebanon, NH.

This week, Mascoma scientists gave me an inside look at the Lebanon labs where Feinberg and his colleagues are developing microorganisms to inexpensively turn materials such as wood chips, switch grass, and corn stalks into ethanol for fueling automobiles and machinery. Mascoma’s plans for streamlining the process of making cellulosic ethanol have been known since it launched with initial venture financing from Flagship Ventures and Khosla Ventures in 2006, but these are particularly exciting times at the company. In April, scientists at the firm were able to demonstrate their streamlined process in a lab experiment. The firm is now scaling up the process at a pilot production facility in Rome, NY, and plans call for completing one of the first commercial-scale cellulosic ethanol plants in Kinross, MI, by 2012.

Mascoma’s process is novel, for starters, because it would not require the use of food crops such as corn or soybeans, which are typically used to make ethanol. Ethanol production has driven up corn prices in recent years, and the total costs of producing such ethanol is high in part because lots of water and land resources are required to grow those feedstocks. Yet cellulosic ethanol production, which is Mascoma’s bread and butter, has plenty of challenges too. With traditional biochemical methods, enzymes are needed to digest the plant materials into sugars, and then yeast or bacteria are required to ferment the sugar to make ethanol. Mascoma’s key innovations include microbes that are genetically engineered to perform both those chores in a single step, making the process potentially more affordable than first thought.

Nathan Margolis, a lab manager at Mascoma, walked me through the labs that the company moved into about two months ago to explain how the firm is trying to harness a process which has been happening for hundreds of millions of years in nature, where bacteria are eating and digesting wood and grass and other plants to survive. “There’s a battle going on out there between the trees and the microbes trying to eat them alive,” Margolis said. “We’ve entered that battle on the side of the microbes” to produce ethanol from renewable sources.

We toured a lab where incubators were shaking up test tubes and glass bottles of yellow liquids that contained microorganisms. Here, the organisms are scrutinized and the genes that make them effective ethanol makers are identified. In nature, bacteria are particularly adept at digesting wood and other materials into sugar, but yeast are typically better at fermenting the sugar to make ethanol, or alcohol. Mascoma is reconfiguring the genes of yeast and bacteria so that each can perform both of those tasks in a single step. One of the firm’s leading microorganisms that can do this is … Next Page »

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If you worry about contributing to global warming–and who doesn’t?—there’s more than one way to go green. You can take actions to reduce your carbon footprint,which, for a big company, might mean doing things like building a LEED-certified office building or buying hybrid vehicles for your corporate fleet. Or you can buy carbon offsets, also known as carbon credits, which allow you to cancel out your own emissions by paying someone to take action that reduces or avoids carbon dioxide emissions somewhere else. Many utilities and other companies are legally required to purchase such offsets to meet “renewable portfolio” standards, and thousands more organizations and individuals do so voluntarily.

For cleantech entrepreneurs around the world, selling carbon offsets has become one of the major ways to finance green-energy projects. But there’s a problem: it’s not always easy to know whether a given offset is real—that is, whether it truly brings about new reductions in carbon emissions, or whether it subsidizes carbon-saving activities that were already underway. The national media have had a field day exposing examples of so-called “rip-offsets,” carbon offsets that turn out to have no “additionality,” to use the green energy jargon. The Washington Post, for example, ran an expose in 2008 charging that some of the $89,000 spent that year by the U.S. House of Representatives on carbon offsets for House office buildings went for no-till farming projects in North Dakota (the practice leaves more carbon trapped in soil than regular plowing) that farmers would have pursued anyway because they save fuel and increase crop yields.

Carbon credits would be one of the major commodities traded under any national cap-and-trade system for tackling greenhouse gas emissions, so there’s some urgency to figuring out how to assure buyers of offsets that they’re getting what they paid for. Several independent organizations offer carbon offset verification services, but for buyers, it’s still hard to assemble all the information needed to make an informed decision. Or at least, it was until Worcester, MA-based World Energy (NASDAQ: XWES) launched the World Green Exchange.

Unveiled in February 2008 and significantly upgraded in April of this year, the World Green Exchange is a free online marketplace where carbon-offset customers can not only price the various options, but peruse all the documents establishing their green bona fides, starting with additionality. World Energy says it set up the exchange as a more transparent alternative to the larger and more established Chicago Climate Exchange, the marketplace where many of the carbon credits criticized as rip-offsets originated.

My first story about World Energy, back in May 2008, focused on the company’s work to execute the first-ever online auction for greenhouse gas emissions allowances. Massachusetts and nine other Northeastern and mid-Atlantic states, collectively known as the Regional Greenhouse Gas Initiative (RGGI), had hired World Energy to help conduct the auction, which was widely viewed as a dress rehearsal for the rollout of a national carbon cap-and-trade system. But RGGI auctions are restricted to power plant owners, and World Energy has also been busy developing the World Green Exchange, which is open to anyone selling or buying carbon credits. Last month, I had an in-depth interview about the exchange with one of its architects, Kenneth Ivanic, the vice president of environmental markets at World Energy. A partial transcript follows.

Xconomy: What were your main design goals for the World Green Exchange?

Kenneth Ivanic: One of the things we excel at is bringing liquidity and transparency to a closed, opaque market. When we looked at the green markets, we saw a real need to counter the “rip-offsets,” but also to help bring people together. To do that, we looked at the key variables that people need [before buying carbon credits]. The first thing, obviously, is transparency—they have to know who is behind the projects. If they know each other ahead of time, they can go over things like credit risk before they spend a year trying to make a deal. The next thing was … Next Page »

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The President of the United States is supposed to know the differences between Sunni and Shia Muslims. But somehow, as Richard Muller points out, nobody expects America’s commander in chief to know the differences between uranium and plutonium, or between gasoline and hydrogen.

That’s why he teaches “Physics for Future Presidents” at UC Berkeley, a course for non-science majors that Muller relishes as his opportunity to inform the business majors and liberal arts students who represent our future leaders. The longtime Cal physics professor turned his idea for the class into a textbook, and more recently into a popular book with the same title.

Now he’s on a roll. Muller was the featured speaker at Xconomy’s premiere event in San Diego Monday night, just a week or so after meeting with global leaders at the World Economic Forum in Davos, Switzerland (He even got to fly home aboard the Google jet).

With “Physics for New Presidents” as his theme, Muller assumes a role that could be described as an equal opportunity “Debunker in Chief.” In rapid succession, he separates some core, inescapable scientific truths from the myths surrounding them. He started by dispelling fears sown by Dick Cheney about terrorists planting nuclear bombs on U.S. soil and ended by puncturing Al Gore’s inflated interpretations of the scientific evidence for global warming. Among the chestnuts he shucked:

—Nuclear bombs are extremely difficult to make, even for industrialized countries. Muller says he’s far more worried about another “low tech” terrorist act involving 60 tons of gasoline and a crowded football stadium on a Sunday afternoon.

—U.S. reserves of coal and oil shale far exceed the amount of crude oil remaining in Saudi Arabia and most other countries combined. “This is great news for energy independence and bad for global warming,” Muller says. Nevertheless, he says the United States should develop all of its energy resources, using “clean coal” technologies and other innovations to curb greenhouse gas emissions.

—The scientific consensus, presented by an authoritative study on global warming by the Intergovernmental Panel for Climate Change, concluded that the warming trend from 1850 to 1957 cannot be attributed to human activities. From 1957 to 2007, the study found a 90 percent likelihood that human activities caused a global average temperature increase of only about 1 degree Fahrenheit.

—Weather data do not show an increase in the number of hurricanes over the past century, nor do the data show an increase in the number of major category hurricanes. Today, hurricanes are detected by weather satellites and sensors in mid-ocean. Such observations were impossible before the first weather satellite was launched 49 years ago.

—Carbon dioxide emissions in developing countries, especially China and India, represent the biggest source of the predicted increase in greenhouse gases. It is a far more intractable problem in terms of curbing emissions, because coal is a cheap and bountiful energy source and clean energy technologies are too costly in comparison. “The only solution that I can think of is that we have to pay developing countries to use clean energy,” Muller says. Otherwise, they won’t use it.

As for energy development in the United States, Muller says his counsel is, “Don’t be greener than thou. Don’t bicker that ‘My technology is greener than yours. ‘ We need all of them. We need clean coal. We need nuclear. We need solar and wind. We need them all.”

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We’re looking forward to seeing you today at Xconomy’s San Diego premiere, an entertaining and eye-opening presentation on Physics for Future Presidents by UC Berkeley’s Richard A. Muller. Online registration for the event, which is here, closes at noon and walk-in registrations begin at 3:30 pm The presentation begins at 4 pm—hope to see you there!

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If President Obama ever has a question about the asteroid that killed the dinosaurs, he can just pick up his Presidential Blackberry and call or e-mail Secretary of Energy Steven Chu, the Nobel Prize-winning physicist.

Of course, the President of the United States could just as easily call Richard A. Muller—the U.C. Berkeley professor who literally wrote the book on Physics for Future Presidents. He also was a leading member of the Berkeley team that theorized how an asteroid killed the dinosaurs. Now Xconomy has tapped Muller and his talent for eye-opening explanations as the featured speaker at our San Diego premiere event. We are hosting the MacArthur “genius” award-winning physicist as the inaugural speaker for our Xconomy Forums here, to be held Monday at 4 p.m. at UCSD’s Institute of the Americas Complex. If you’re interested in attending, you can register here.

The book Physics for Future Presidents grew out of Muller’s popular class for non-science majors at Cal—which was voted “The Best Class at Berkeley” last year in a readers’ poll by the student newspaper, The Daily Californian. Muller’s book and lectures have gained renown for explaining the important science underlying terrorism, energy, electric cars, nukes, space, and global warming—and for empowering our electorate with a better understanding of science and technology.

Please join us Monday afternoon to hear this engaging presentation by one of the foremost speakers on science and technology. I hope to see you there.

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The United States will have a new president in four days. But if it were you, how should science and technology guide you in making key decisions in areas like energy, the environment, and fighting terrorism? Should we invest heavily in solar power or electric cars? What is the real potential of nuclear technology—either as a terrorist weapon or as a clean energy savior? How much do we really have to worry about global warming, or do we really even know yet?

These are just some of the issues that will be addressed in our San Diego site’s first Xconomy Forum: Physics for Future Presidents—which will be held on Feb. 9 at 4 p.m. on the University of California, San Diego campus. The speaker is renowned U.C. Berkeley physicist and MacArthur “genius” grant winner Richard A. Muller, author of a best-selling new book of the same name. The book, in turn, is based on his course for non-science students, which was voted the most popular class on the Cal campus.

Rich is an old friend of mine; I first met him when working on a cover story for Time magazine about how an asteroid or comet might have led to the extinction of the dinosaurs. He was one of the core team, along with Luis Alvarez and others at Berkeley, who advanced that theory and changed our view of our planet’s history. Rich is one of the world’s most original, and provocative, science and technology thinkers, and we are pleased to have him join us for our debut San Diego event.

And if you think you already know the answers to some of the questions posed above, be prepared to be surprised, even amazed, by Rich’s arguments—this is a man who doesn’t put much stock in conventional wisdom or the party line. All of which could—and we hope will—make for some lively debate during Rich’s talk, which begins at 4 pm (doors open at 3:30) in the Hojel Auditorium in UCSD’s Institute of the Americas Complex. And you’ll have ample chance to continue the discussion, and to meet fellow members of the San Diego innovation community, during a networking reception in the adjacent Arango Foyer that will begin immediately after the talk.

You can find more details and registration information here; tickets are going fast, so act quickly. Xconomy San Diego editor Bruce Bigelow and I look forward to seeing you there, future presidents.

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Yesterday, we ran the first half of a sit-down interview with Nathan Myhrvold, cofounder and CEO of Intellectual Ventures, the Bellevue, WA-based invention laboratory and investment firm. Myhrvold, the former CTO of Microsoft (and an Xconomist), placed his current company’s goals in the context of venture capital and private equity, arguing that there is a real need to create what he calls an “invention capital” industry.

In what follows, Myhrvold talks about the lessons he learned in forming Microsoft Research, the differences between research and invention, some ambitious and far-out projects from Intellectual Ventures (e.g., invisibility, geo-engineering), and the motivation behind his firm’s upcoming expansion into five Asian countries.

Xconomy: Before we get into specific projects and inventions, what all did you learn from Microsoft Research that’s applicable to Intellectual Ventures?

Nathan Myhrvold: I have a theory that R&D is a great investment, a fundamentally good business. Using the human mind to go from nothing to something is a hell of a trick. And there’s nothing fair about it. A guy like Einstein can come up with all these things, but so can people who aren’t actually all that smart! There are people dumber than Einstein who’ve made amazing contributions.

So I believe you can make money with research, or invention. But you need a certain scale factor. Let’s say I have this idea called life insurance. If I just insured your life, it wouldn’t be worth it to either one of us. Insurance is fundamentally a risky bet, and to make it reasonable, what you’re buying and selling is variance. You need to have a large end limit to shrink the variance down. With Microsoft Research, I came to the conclusion that research could have been enormously profitable for Bell Labs, IBM, and others. It was profitable, but it could have been even more profitable. Xerox PARC could have made Xerox one of the most valuable companies on Earth. But most people screwed it up.

And after screwing it up, the lesson was mislearned that it’s impossible to be successful in this way. Most of Silicon Valley turned away from the notion of trying to do anything new. The implicit attitude was, hey, that’s why Stanford exists, somehow they’ll come up with new ideas. We’ll wait until that occurs. And then when companies got bigger, the size of Oracle or Sun or Apple, they said, “Well, keep doing that. Screw it, we’re not actually going to do anything really exciting.” And I thought, no that’s the wrong thing to do. If you have the scale at which you can afford to wait 5 to 10 years for a result, that was the key thing. If I say, invent something or do valuable research tomorrow, that’s an impossible task. But if I say, support 100 really smart people working really hard for 5 years, something great will come of it.

X: That’s what you had at Microsoft, because of its size.

NM: At Microsoft, we had the resources to do that. So I talked Bill [Gates] into starting Microsoft Research. It’s been hugely successful; they would say it’s one of the best investments they ever made, enormous customer value and shareholder value…To sum up, Microsoft Research is based on a similar idea [as Intellectual Ventures], with one twist. There, all I had to do was convince one man, and we could go ahead. After I retired from Microsoft, I wanted to keep going. I no longer had the one man to convince to do the whole thing. If you think about how to replicate the model, even if I’d gotten Bill to give me more money to do something else, that wouldn’t be the replicable model. So that’s where I came back and said OK, how could you do this on an even broader scale?

It turns out the way the world does this on a broad scale isn’t by saying this will be done by a government agency or by Bell Labs, a research lab funded by a monopoly business. In fact, the modern way to do it is to create one of these marketplaces where large investors are willing to put a small fraction of their income towards really risky things. And so … Next Page »

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Smaller Carbon Bootprint Could Save Soldiers’ Lives, Says Army

The Army is looking for ways to reduce its carbon dioxide emissions, with a goal of reducing them by 30 percent by 2015. Reuters reports that steps to reduce the so-called “carbon bootprint” would not only reduce the Army’s contribution to global warming, it might also reduce risks to soldiers. Soldiers are at risk from roadside bombs and other attacks while they’re escorting supply trucks through the countryside; reducing the number of trucks transporting fuel means cutting the number of soldiers at risk.

Scientists Worry that Back-and-Forth Confuses Public About Warming

Some climatologists are concerned that the natural progress of science, in which studies report new results, then are challenged by even newer studies, could be confusing the public about global warming. Part of the problem, according to the New York Times, is that it’s difficult to clearly communicate scientific uncertainty through the media. Some experts say scientists have to be more careful about what they say to the public.

Interest Groups Oppose Smut-free Network

A plan by the Federal Communications Commission to create a free, national wireless broadband service is being criticized by 22 groups, including the Electronic Frontier Foundation, the American Booksellers Association, and People for the American Way. Ars Technica reports that the groups are opposed to the FCC’s plan to filter from this network images and text that could be construed as pornographic or obscene. The groups contend the filtering plan is too broad and would violate the First Amendment.

Cheaper Batteries Could Boost Hybrids

A researcher at the University of Texas at Austin has come up with a cheaper way to manufacture lithium iron phosphate batteries. Because iron is less expensive than the cobalt used in standard lithium ion batteries, such devices have the potential to be cheaper, which is important to makers of hybrid vehicles. Technology Review tells us that Arumugam Manthiram figured out he could produce lithium iron phosphate more quickly and at lower temperatures by using microwaves, potentially cutting the manufacturing costs of such batteries.

Internet Can Be Upgraded Privately, FCC Member Says

The Federal Communications Commission has been looking for ways to deal with the problem of peer-to-peer file sharing eating up much of the Internet’s bandwidth. But Robert McDowell, a member of the FCC, argues in an essay in the Washington Post that the government should leave the issue to unregulated groups of engineers. Those groups, such as the Internet Engineering Task Force, have done a good job of solving previous issues that threatened the viability of the Net, he says.

Brooking Institution Calls for Infrastructure Strategy

The United States needs a national strategy for promoting infrastructure, whether that means bridges or broadband, says a group formed by the Brookings Institution. The Institution has released six policy papers covering the group’s findings. Among their discussions: making better use of the wireless spectrum, bringing broadband to underserved communities, and coping with traffic congestion on the roads.

Startup Offers Home Energy Monitoring

A Boulder, CO, company, Tendril Networks, is developing a system to tell homeowners how much energy they are using. CNET News says the devices work with utilities’ usage monitoring systems and will eventually be able to network to other devices in the home. The aim is to not only tell consumers how much energy they are using in real-time, but how they can make adjustments to save money.

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In case anyone didn’t get the memo, energy prices are going up.

This trend will most likely continue for two very simple reasons: Worldwide energy demand is rising, and global fossil fuel supplies are tightening.

Add to this the need for critical action on the part of all nations to reduce their greenhouse gas (GHG) emissions in response to what is now a preponderance of evidence that continued reliance on fossil fuels will result in catastrophic changes to our climate and eco-systems.

It has been prophesied by some that taking state-level legislative action on climate change by capping allowable GHG emissions would place a tremendous burden on our local economy—especially at a time when the economic outlook is not all that rosy to begin with. The thesis is that, by forcing our businesses to pursue energy-saving measures, and adding more expensive renewable energy into the supply stream, we will greatly add to their expense burden, thus reducing their competitiveness.

Don’t believe it. And here’s why:

Let us, for a moment, take a cap on GHGs off the table, and look at the long term. Assuming a continued, steady rise in energy prices over the coming decades (something many experts now predict), our businesses are going to be faced with a sizable expense burden as energy prices become a larger and larger line item on their balance sheets. What’s worse, there is nothing to suggest that it will level off—and why should it? The basic laws of supply and demand dictate that that when supply is constrained in the face of surging demand, prices shoot skyward.

While Bay State businesses will inevitably respond to these market signals by implementing energy efficiency measures on their own, there is an opportunity here to move faster—and in doing so, provide our businesses and our economy with two substantial benefits.

So let’s now put GHGs back on the table, and talk specifically about why Massachusetts should pass the Global Warming Solutions Act (GWSA, or Senate Bill 2531)—which calls for a reduction in greenhouse gas emissions to 20% below 1990 levels by 2020, and 80% below 1990 levels by 2050.

Benefit number one: Global competitiveness.

If we simply wait until federal legislation caps GHGs for us (and I think we all know federal legislation is coming), then the bulk of Massachusetts companies will move with the crowd. Under the GWSA, our companies will be ahead of the curve, streamlining their operations in advance of the federal mandate, and gaining first-mover advantage in the process. As energy prices rise, our companies will be better prepared to keep energy expenses under control through early action and better planning. The bottom line: our companies will ultimately be stronger and healthier competitors as a result of this legislation.

Furthermore, as the GWSA (and the Green Communities Act, Massachusetts’ comprehensive energy bill now in conference committee) substantially increases the amount of electricity derived from renewable energy, we will start to create a hedge against rising fossil fuel prices. While it won’t happen tomorrow, renewable energy will, at some point, be cheaper than traditional sources, and having a strong local supply of clean energy will allow us to pay less (perhaps significantly less) in the future.

Benefit number two: Sector leadership.

Energy transformation is non-optional—at the state level, at the national level, and worldwide. In short, we must develop technologies to replace fossil fuels not only because of climate change, but because they are finite resources. But here’s the good news: If we implement a cap on GHGs, we will unleash what is perhaps the greatest economic asset of the Commonwealth of Massachusetts—our ability to innovate.

The Global Warming Solutions Act, the Green Communities Act, and the Green Jobs Act (which includes funding for clean energy R&D and entrepreneurship) will catalyze a tremendous increase in clean energy investment and new venture creation, which in turn will create jobs and grow our local economy.

Skeptical? Consider this: In a report to Governor Schwarzenegger and the Legislature, a multi-agency Climate Action Team led by the California EPA projected that California’s Global Warming Solutions Act of 2006 (AB32) will increase Californians’ personal income by roughly $4 billion and create approximately 83,000 jobs.

Worldwide, clean energy was a $77 billion market in 2007, and is expected to grow to $1 trillion by 2030. Roughly a dozen U.S. states are working aggressively to claim their piece of this prize; while Massachusetts certainly boasts all of the ingredients required to compete, let us not be complacent.

The Global Warming Solutions Act, the Green Communities Act, and the Green Jobs Act will substantially up the odds that we will establish a strong, growing cluster of clean energy companies here in the Commonwealth, and emerge as a leader in what will inevitably one of the largest technology markets in history.

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Government Considers X Prizes for Nanotech

Big prizes for technological innovation are becoming all the rage in Washington. Ars Technica tells us that Republican Senator Olympia Snowe of Maine and Democratic Senator Ron Wyden of Oregon have introduced a bill to fund prizes for advancements in nanotechnology. They’re hoping the fund will attract money from private investors as well.

U.S., EU Promote Open Internet Worldwide

Policymakers in both the United States and the European Union are pushing for laws to promote free expression and privacy on the Internet in countries like China. On its Policy Beta blog, the Center for Democracy and Technology, which supports the idea, says Jules Maaten of the EU Parliament and Republican Congressman Chris Smith of New Jersey have gotten together to discuss how they could push their Global Online Freedom Acts.

In Shaky Economy, Net Bartering Grows

With credit markets tight and consumers having less cash to spend, a number of companies are turning to the Internet for a different way to do business-bartering goods and services. The New York Times reports that about 450,000 companies are involved in barter networks, and companies are popping up to handle the transactions. One barter company executive tells the paper that bartering is a good way to conserve cash.

Obama Pushes Cyber Security

The Bush administration hasn’t done enough to combat cyber-espionage and other online crime, Democratic presidential candidate Barack Obama says. In a speech at Purdue University, Obama said he’ll make network security a top priority, and appoint a National Cyber Advisor, according to Wired.

Scientific Society Publication Proposes Debate on Human Role in Global Warming

The editors of Physics and Society, the newsletter of a division of the American Physical Society, want to have a public debate on whether human activities are contributing to global warming, or whether it’s a natural phenomenon—and they are kicking off the debate with the publication of both a pro and a con article in the online publication. One of the editors, Jeffrey Marque, writes that “there is a considerable presence within the scientific community of people who do not agree” with the conclusion that human activity is the most likely cause of warming. [Editor's note: A previous version of this item failed to say that the views of the Physics and Society editors do not necessarily represent those of the American Physical Society, and erroneously implied that the APS itself wanted to foster the debate.]

Economy Darkens Outlook for Home Solar Power

The lack of easily available credit for homeowners could stifle the market for residential solar power systems, an industry expert warns. Earth2Tech reports that David Arfin of solar power company SolarCity (Foster City, CA), says lenders are toughening requirements for loans to install the systems. Without the credit crunch, he says, more systems would likely be installed.

DOE, Dow Collaborate on Ethanol Production Process

Dow Chemical and the National Renewable Energy Laboratory, part of the Department of Energy, are jointly developing a thermochemical process that will convert biomass to ethanol and other chemical products. Green Car Congress says the process will heat biomass to produce gases, which a process from Dow will then convert into various alcohols, including ethanol. The project intends to show whether this can be done on a commercial scale.

Elder Statesmen Warn of “Energy Tsunami”

A long-term energy crisis threatens the security of future generations if some action isn’t taken soon, a bipartisan group of 27 elder statesmen are warning. The Associated Press reports that the group sent an open letter to both presidential candidates and every member of Congress. The letter came from Henry Kissinger, Colin Powell, six other former secretaries of state or defense, as well as former senators and cabinet officers from both parties.

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EBay Case Shows Flaws in Internet Law

A ruling this week that eBay isn’t responsible for ensuring that goods are not counterfeit disappointed Tiffany’s, which brought the suit, but cheered the online auction site. But as a piece in the Wall Street Journal points out, the U.S. judge’s decision comes just two weeks after a judge in France ruled the opposite way. The author says the competing decisions show just how difficult it is for businesses to navigate the law as it applies to the global Internet.

Warming May Lead to More Kidney Stones

We’re used to predictions of rising oceans and dying species, but here’s a new effect of global warming to worry about. A study in the Proceedings of the National Academy of Sciences predicts that warming will cause increased dehydration in people, raising the risks of kidney stones by up to 30 percent. Science News says the study predicts between 1.6 million and 2.2 million new kidney stones between now and 2050.

Scientists Propose Burial at Sea for Carbon

One way to counter global warming may be to inject carbon dioxide into porous volcanic rock on the ocean floor, thus keeping it out of the atmosphere permanently. Science Now reports that scientists at Columbia University have surveyed deep-sea basalt formations for their potential to store carbon. The researchers say there’s an area off the Oregon coast that could hold more than 120 years’ worth of U.S. carbon emissions.

Saltwater Crop Could Provide Food, Fuel

One concern with the Bush administration’s push toward more biofuels is that it’s using up arable land and driving up the price of food crops. The Los Angeles Times brings us the story of a researcher who’s looking for ways to grow crops for both food and fuel in areas with poor soil and a lack of fresh water. The scientist, Carl Hodges, grows a crop called salicornia, which he nourishes with seawater from a manmade canal.

RFID Could Prove a Problem in Hospitals

Hospitals are increasingly using radio frequency identification (RFID) tags for such uses as monitoring the freshness of stored blood. But the New York Times reports on a study in the Journal of the American Medical Association that found some tags could produce electromagnetic interference with other hospital equipment, such as external pacemakers. The study recommends on-site tests before the tags are used in intensive care units or other critical areas.

Traffic Cameras Link to Cell Phones

One way to cut down on energy use and pollution is to reduce the hours commuters spend stuck in traffic jams. The Washington Post’s Post I.T. section reports that a new service is coming to the D.C. area to let drivers receive live video and photos of traffic on their cell phones. The service, which relies on cameras owned by various highway departments, is also available in New York, Houston, Detroit, and Los Angeles. No word on what this says about the danger of driving while watching your cell phone.

New Type of Battery Could Power Future Autos

As part of the push to create more plug-in hybrid and electric vehicles, researchers are trying to improve the safety and storage capacity of batteries. Daily Tech tells us that a company called ZPower, of Camarillo, CA, is working on replacing the current lithium-ion batteries with devices made from silver and zinc. A silver-zinc battery could hold about 40 percent more energy than a lithium-ion battery, and is less volatile, the company says.

Agreement Keeps YouTube User IDs Private
The lawsuit brought by Viacom against Google won’t lead to the major invasion of privacy that many privacy advocates feared, now that the two have reached an agreement on how to share data. ComputerWorld reports that Viacom agreed to let Google conceal the user ID and IP addresses of users when it provides data about viewing habits on YouTube, which it bought in 2006. A judge in Viacom’s lawsuit, which alleges that YouTube users infringed on copyrights of movies and television shows owned by Viacom, had ordered Google to turn over all information about who watched videos and what they watched, leading to a public outcry.

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Crashes a Big Deal for Web Businesses

A few years ago, if a site like eBay went down for a couple of hours, it wasn’t such a big deal, because the number of users was relatively small. But as the New York Times points out, retailers are becoming more dependent on Web traffic, so a crash, such as when Yahoo’s Merchant Solutions site went down for 14 hours in the middle of the Christmas rush, is a much bigger concern.

Space Mirrors Don’t Solve Global Warming, Study Finds

Among the more ambitious proposals for combating global warming is the suggestion of unfurling giant mirrors in space, to reflect away some sunlight and compensate for the amount of heat trapped by the atmosphere. But the Discovery Channel reports on a recent study that questions the effectiveness of such an attempt. In a simulation, researchers were able to reduce the average global temperature, but they still saw warming at the poles and cooling at the equator, throwing the climate off balance.

Heat Waves Could Reach 120°, Study Warns

If something isn’t done to slow global warming, the planet could see heat waves of 120 degrees Fahrenheit by the year 2100, according to a study reported in Daily Tech. Dutch researchers developed a computer model to predict temperatures in cities during a heat wave. The results: 117° in Los Angeles and 110° in Atlanta, 5 degrees hotter than their record highs.

GOP Opposes Anti-Porn Rules for Wireless Network

You might suppose that Republicans would like a rule restricting indecent content on a proposed nationwide broadband wireless network. But Ars Technica reports that two GOP Congressmen are asking the Federal Communications Commission to drop the restriction. They worry that the rule will discourage bidding for the proposed network’s radio frequencies.

Ancient Bug May Hold Key to Hydrogen Economy

A microorganism from a billion-year-old branch of the tree of life can digest cellulose and exhale hydrogen, pointing the way toward easy production of an alternative fuel. The Joint Genome Institute of the Department of Energy plans to sequence the genome of Desulfurococcus fermentans, which was found by Russian scientists in an old volcano, says the Environmental News Network. Researchers aim to find the biological pathways that allow the bug to convert plant matter into hydrogen, so they can harness its power.

Cancer Nanotech a Good Example of Government Research Spending

The development of nanotechnology as a tool to fight cancer is leading to promising treatments, showing that government spending in a focused area of research can be good for business and for the public, argues a writer at Wired. Looking at the field of nanotechnology developed to treat cancer, the author says funding from the National Cancer Institute has led to promising developments in the field. So far, there are at least 48 clinical trials going on, many of them in Phase II.

New York to Spend Billions Fighting Greenhouse Effect

New York City mayor Michael Bloomberg has announced his intention to spend $2.3 billion to cut greenhouse gas emissions in the city by 30 percent over the next 30 years. Reuters reports that the city wants to make its buildings and operations more efficient. Bloomberg predicts that by using less energy, the city should break even on its spending by 2013.

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