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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FCC Considers How to Save Birds from Cell Towers

No one is quite sure how many migrating birds are killed when they slam into cell phone towers at night, but the number could be in the millions. So five conservation groups attended a mini-conference sponsored by the Federal Communications Commission to urge the FCC to protect the birds, Ars Technica reports. The FCC did not say how it might address the issue.

‘E-Bay for Biofuels’ Seeks Market Efficiency

A group called the U.S. Biofuels Exchange has established a website that allows buyers of biofuels to find producers of all sizes. The Environmental News Network says that there are all sorts of small producers of ethanol or biodiesel, but that it’s been hard for potential purchasers to find them, making the market less cost-efficient. The trading site contains a tracking system to follow deals and display real-time pricing.

Internet Pricing Based on Usage Rates?

Usage-based pricing could be coming to your Internet connection soon, according to GigaOm. AT&T, Time-Warner, and other suppliers of connectivity plan to introduce pricing tiers, based on how much bandwidth a user requires. The site supplies some estimates of how many bytes a user might get for his buck.

Flat-Screen TVs Contribute to Global Warming, Study Says

Think you can go green by eschewing the SUV and watching a movie on your big flat-screen TV? Think again. Earth2Tech reports that a study at the University of California, Irvine, raises the possibility that nitrogen trifluoride, a gas used in making the TV sets, could have a greater impact on global warming than coal-fired power plants. While produced in less volume, the gas is 17,000 times better than carbon dioxide at trapping heat in the atmosphere.

Biotech Startups Scramble for Tax Credits

Maryland has been trying to encourage the development of new medical devices and treatments by offering $6 million in tax credits to biotech startups. Now in its third year, the program for the first time saw company officials camping out on the sidewalk, hoping to get their share of a limited pot, the Washington Post reports. Maryland Gov. Martin O’Malley says he hopes to raise the tax credits to $24 million by 2013.

Autonomous Autos Could Save Fuel and Lives

Cars that are programmed to drive themselves, instead of relying on fallible human drivers, could make more efficient use of fuel while reducing the risk of accidents, says a story in Business Week. General Motors is one of the companies embracing the concept, the magazine reports. The Pentagon is also promoting the creation of autonomous vehicles for military uses.

Plane Fuel Costs Too High? Take a Zeppelin

As airlines struggle to find ways to cover the soaring cost of jet fuel, several companies and governments are looking into creating a new generation of airships. The New York Times reports that a number of companies, mostly in Europe, are working on new designs for dirigibles. In the U.S., the Defense Advanced Projects Research Agency has funded research into airships, mainly for military communications.

Scientists Promote Six Degrees of Vaccination

Kevin Bacon may be the key to stopping flu pandemics, according to Science News. The magazine reports that targeting vaccinations to the right people could be a quick and inexpensive way of stopping a disease’s spread in its tracks. The idea is based on the notion of social networks – popularly known as six degrees of separation, the phenomenon that allows you to connect any actor to Kevin Bacon in only a few steps – and relies on vaccinating people who act as “nodes,” who connect one circle of people to another.

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I feel the need to start off with a disclaimer, because when you start pouring A-1 sauce on sacred cows people tend to get a wee bit irrational. Let me state for the record that I do indeed believe that global warming is a real threat. I also think that our over dependence on foreign oil is a bad thing that imperils our nation’s economy. I also believe that cleantech is an investment area of great promise with new technologies that will profoundly change our world for the better.

That said, the cleantech field—as it currently stands—is a disaster in the making, with dumb money chasing dumb investments and with shoddy science experiments being grossly over-hyped as panaceas for all that ails our environment, gas tanks, and wallets.

We all know the score—basically, we have is a planet warming from CO2 emissions, record fuel prices, near or at peak oil, exploding demand from China and India for natural resources, not to mention suburban sprawl, polluted rivers and soil, etc, etc. The hope is we may be able to fix it with behavioral changes and technology.

Cleantech is the umbrella term for the technology part of this hope. It’s generally thought of as products or services that “…improve operational performance, productivity, or efficiency while reducing costs, inputs, energy consumption, waste, or pollution.” (Thanks Wikipedia.)

The issue I have with cleantech lies in the solutions that are being focused on, and who is doing the focusing. Let’s start with the latter and look in this column at cleantech and the VC community. You know, the guys quoted in all those BusinessWeek and Fortune articles portraying themselves as the saviors of the Earth—much like Capt. Planet and the Planeteers.

According to the most recent PricewaterhouseCoopers MoneyTree survey, venture capitalists invested $2.2 billion in cleantech companies over the last year. That’s a mind boggling 45 percent jump over 2006. I have seen business plans that were laughed at a couple years ago now become the object of bidding wars by top VC firms.

Beyond the hype and money, why are the VCs flooding into cleantech? I reckon some of it is driven by a combination guilt complex/God complex for the “sins” they committed in acquiring their wealth. I won’t mention any names (mainly because it’s such a huge list), but it appears these personal pathologies factor into their drive to save the Earth with their bigger brains and purer hearts ***cough***.

Now, there are great venture capitalists patrolling the cleantech space—Rob Day of @ventures comes to mind—but they belong to a very short list. The biggest problem is that most VCs are not equipped to handle industrial plays like energy. They don’t understand the engineering, the science, the value chain, or how the public policy world works. And, even worse, they don’t seem to be taking the time to access the right people to do the due diligence for these questions either.

These days, I am watching some HBS drop-out, who sold an online dog food company back during the bubble days, in a mad scramble to blindly pull the trigger on deals that need expertise in materials science and mechanical engineering to even read through the business plan. Seriously, some of the bizarre claims being made by some entrepreneurs in their projections would make any power industry engineer simply laugh out loud. Yet the checks are flying out of investment firm after investment firm to these start-ups.

Getting beyond the scientific and technical feasibility issue, try to find a VC that understands manufacturing. Good luck. I hypothesize that the reason so many photovoltaic companies have gotten funded is because if a VC by some miracle does understand manufacturing, he almost always understands it in terms of the semiconductor field. The reality is that building a physical object is extraordinarily different from …Next Page »

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A Massachusetts energy-trading startup is gearing up to host the nation’s first auction for greenhouse gas emissions allowances. The details are still being worked out, but if all goes according to plan, World Energy Solutions (TSX: XWE) of Worcester will conduct the online auction—in which power-plant owners will buy and sell the rights to emit certain quantities of carbon dioxide into the atmosphere—on September 10.

Carbon-emissions auctions aren’t a new concept. A carbon trading market has been in operation in the European Union, where most member states are Kyoto Protocol signatories, for three years. But greenhouse emissions trading is an untested idea in the United States, where the federal government has so far failed to enact policies limiting emissions of carbon dioxide and other gases that contribute to global warming. This federal inaction has led some individual states and regions to come up with their own ways to reduce CO₂ emissions. And we live in one of them: Massachusetts is one of 10 Northeastern and Mid-Atlantic states participating in the Regional Greenhouse Gas Initiative (RGGI), which is about to impose a cap-and-trade system that will force the region’s power providers to either lower their own carbon emissions below pre-defined limits or buy enough carbon “allowances” from other plant owners to cover their excess.

A key premise of cap-and-trade schemes is that they’re more efficient at reducing emissions than rigid pollution caps, since the opportunity to sell carbon allowances gives companies an incentive to get below their own emissions cap by innovating—for example, by installing better pollution-control equipment or switching to non-fossil-fuel energy sources. A national cap-and-trade system for sulfur dioxide emissions, run by the Environmental Protection Agency, has brought about drastic reductions in acid rain, at a cost-per-ton far below what analysts and industry expected.

But cap-and-trade systems only work if there’s a transparent marketplace where polluters can buy and sell carbon allowances. And to create that marketplace, the RGGI states have turned to World Energy.

The company, which went public in 2006 on the Toronto Stock Exchange, is one of many businesses that sprang up to capitalize on the wave of deregulation that swept the nation’s electrical markets in the 1990s. It specializes in online reverse auctions where clients in deregulated states who want to buy power—say, city governments looking for the best rate on electricity for streetlights—can invite potential suppliers to bid against each other in real time. Until recently, most electricity customers turning to competitive suppliers sent out paper …Next Page »

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Simply by breathing while you’re sitting there at your computer, you’re releasing about 40 grams of carbon dioxide into the atmosphere every hour. But because you’re at that computer—which is using electricity, which was likely produced by burning some fossil fuel—you’re indirectly responsible for emitting another 60 grams of CO2 per hour.

Or are you? The numbers aren’t in dispute—but the question of who should take responsibility is. And two student-entrepreneurs from Harvard and Yale argue that it isn’t readers but website publishers—the people who produce all that content for others to consume over the Internet—who should be cognizant of their sites’ overall “carbon footprints” and should do something to counter the greenhouse effects of the emitted CO2.

Alex Wissner-Gross, a physics doctoral student at Harvard, and Tim Sullivan, a history of art doctoral student at Yale, have created a small piece of software—a “widget,” in Web 2.0 parlance—that publishers can plug into the code of their websites. The widget, called CO2Stats, measures the amount of time visitors spend on each page, adds it up, calculates the amount of carbon dioxide released as a result, and displays the running total. The idea is to make publishers (and readers) more aware that the Internet—as a giant collection of servers and routers and phone lines and fiber-optic cables and networking devices and home PCs that all run on electricity—has a real environmental impact.

“Information communications technology in the industrialized world accounts for about 2 percent of overall CO2 emissions,” says Wissner-Gross. “One could say ‘It’s only 2 percent of the pie, so let’s attack transportation or some other carbon source,’ but that’s not being visionary enough. Information technologies are some of the easiest-to-attack portions of the pie.”

Big Internet companies like Google are attacking by investing in cleaner energy sources to power their massive data centers (the search giant announced today that it plans to spend tens of millions of dollars in 2008 on R&D on solar, wind, geothermal, and other forms of renewable energy). Wissner-Gross and Sullivan are attacking by buying carbon offsets equivalent to the total footprint of all CO2Stats users. Carbon offsets are, in essence, pledges that someone else will take action to prevent the release of a certain amount of greenhouse gas. In the case of CO2Stats, Sullivan and Wissner-Gross buy offsets from Sustainable Travel International, which uses the money to invest in a varied portfolio of renewable-energy and energy-efficiency projects, from wind farms in Washington state to solar collectors in Costa Rica and an effort in Cambodia to develop more efficient wood-fueled cook stoves. (The graphic at left is an actual CO2Stats widget showing how much CO2 has been offset as a result of Xconomy readers visiting this page.)

Carbon offsets are a tangled matter. There’s acrimonious debate within the environmental community about every virtually every aspect of the subject, from how to properly measure an individual’s or an organization’s carbon footprint to what kinds of projects lead to legitimate, measurable reductions in CO2 emissions—and even whether buying an offset (technically, a “renewable energy credit”) for a kilogram of carbon dioxide is really equivalent to preventing the emission of one kilogram of the gas.

But Wissner-Gross and Sullivan aren’t fixating on the philosophical fine points. “The whole notion of having portfolios of carbon offsets is still a very young, very immature field, and I think we’re very open to growing with the field as international standards for what constitutes a ‘good’ carbon offset become available,” says Wissner-Gross. “Right now we’re trying to work within the system. We’re not in the business of starting our own carbon offset firm.”

And for now, Wisner-Gross and Sullivan are paying for the offsets out-of-pocket, using money they say they’ve saved as frugal graduate students. (The pair run a small software consulting company called Maxtility that has also created Isonme, a site that helps people get instant advice about things they photograph in their environments, and BooksOnPoster, a technology for printing entire books legibly on a single sheet of paper. They recent sold BooksOnPoster to SurfMyAds.com.) “We think we can probably survive a few more months” paying for the offsets out-of-pocket, says Wissner-Gross, “but it would be nice to get some sponsors on board.”

That need will get a little more urgent as CO2Stats’ popularity builds. Wissner-Gross says that through word-of-mouth publicity, the number of publishers and bloggers installing the widget is growing at about 7 percent per day, and that there will likely be a million users within two months. Wissner-Gross says he and Sullivan haven’t added up the total CO2 emissions tracked by their widget across all its users, but they expect to post a running total on their website starting sometime in the next few weeks. So far, they’ve offset 1.075 pounds, or about half a kilogram, of CO2 emissions from their own site, according to the widget at www.CO2stats.com. (Offsets from Sustainable Travel International cost $15.25 per metric ton, so offsetting half a kilogram of CO2 would cost only about 7/10 of one cent.)

Sullivan and Wissner-Gross don’t anticipate asking widget users themselves to pitch in for the offsets. “The Internet has reduced the friction in so many other aspects of our lives today, and we felt that in order to create a sustainable system for offsetting emissions from information communications technology we needed to keep the friction low and throw in some of our own capital,” says Wissner-Gross. “So I think [publishers] have taken enough of a positive step by putting the widget on their website in the first place. But in the longer run, it may stimulate people to take responsibility for larger, more ‘frictionful’ steps.”

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