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By Robert Rapier on Feb 17, 2011 with 33 responses

The Media’s Role in the Range Fuels Fiasco

Now that it seems that the mainstream media has finally caught on to the fact that something went terribly awry at Range Fuels, it is time for me to close the book on them. This will be my last Range Fuels story, but I think there is a lesson to be learned here.

Waiting Until The Fat Lady Sang

In the past week, an increasing numbers of stories have covered the Range Fuels affair. The Wall Street Journal’s take was the most high profile coverage:

The Range Fuels Fiasco

Vinod Khosla stepped in with his hand out. The political venture capitalist founded Range Fuels and in March 2007 it received a $76 million grant from the Department of Energy—one of six cellulosic projects the Bush Administration selected for $385 million in grants. Range said it would build the nation’s first commercial cellulosic plant, near Soperton, Georgia, using wood chips to produce 20 million gallons a year in 2008, with a goal of 100 million gallons. Estimated cost: $150 million.

In early 2010, the EPA said Range would finally produce some fuel in 2010—but only four million gallons, not 100 million, and of methanol, not cellulosic ethanol. So taxpayers have committed $162 million (along with at least that much in private financing) to produce four million gallons of a biofuel that others have been making in quantity for decades. This politically directed investment might have gone to far more useful purposes.

As some readers wrote to me and noted, the WSJ article reads as a condensed version of an article that I wrote a year earlier called Broken Promises from Range Fuels. Here is a sampling of other recent stories covering Range Fuels’ demise:

Plant closure bursts Ga.’s biomass bubble

Green-energy plant sucks up subsidies, then goes bust

Government Loses Bet on Range Fuels

The fact that it took an actual announcement from Range Fuels that they were closing the plant to draw this sort of scrutiny is troubling. People are now showing up for the autopsy, but there have been warning signs all along that there was a problem with the patient. Nearly five years ago I wrote an article critical of Vinod Khosla — chief promoter of Range Fuels — for making grossly misleading claims; exactly the kinds of claims that political leaders and the media gave him a free pass on as he lobbied for funding for his ventures.

Khosla wrote articles and delivered speeches in an effort to stir up public animosity against the oil companies, insisting they were were ripping people off and at the same time keeping renewable energy grounded. He declared war on these dinosaurs and their outdated technologies, and he offered up his solution: Silicon Valley know-how promoting companies like Range Fuels (now shuttered), Cello Energy (since then convicted of fraud), and E3 Biofuels (now bankrupt). Not once did I see any mainstream media stories challenging his claims or his credentials for making such claims. Those articles are coming now at a brisk pace, but why did it take this long?

The Media Served as a Vehicle to Promote Hype

In fact, not only were the claims not challenged, the media played a big role in helping establish the Range Fuels hype. Khosla was given a platform in many outlets to promote his companies. There were high profile (and uncritical) pieces on Range Fuels in The New York Times and in Forbes. Discover Magazine published a story on Range called Anything Into Ethanol. Given their previous gushing story on Changing World Technologies called Anything Into Oil — followed by CWT’s bankruptcy, perhaps Discover should stop trying to tell readers about the next big renewable fuel breakthrough. They don’t appear to have reporters assigned to these stories who know how to differentiate hype from reality.

Why should the media have sensed earlier that something was amiss? If they had simply applied the “it seems too good to be true” rule, perhaps some challenging questions would have been asked. I believed something was amiss because their claims ran strongly counter to what I knew about gasification and subsequent conversion into liquid fuels. They ran strongly counter to what I knew about the cost and length of time to build a plant. So I started to raise questions — but I also asked “why the mainstream media has completely missed this story.”

When I started to raise questions that the media should have been raising, people close to Range projected confidence and insisted all was well. Their CEO said that my critiques were “clearly misleading and inaccurate.” One of the engineers working on the project echoed that, calling me “misinformed about the Range Fuels project” and still insisting less than a year ago that “Range Fuels will be the largest cellulosic ethanol production facility in the world when it is commissioned with its final catalysts.” Ironically, he warned me that investigative articles like I wrote “do only harm to the biofuels industry, despite your misguided intentions.”

I tried to discuss technical issues with some of their people. While they projected great confidence, it was like we spoke different languages. I wanted to know about heat and material balances, and they wanted to talk about vision and drive. (That is not an indictment of all Range employees, but they definitely had some people in key positions who didn’t know much about the energy business). I was not the only person who noted a confidence/competence mismatch. I recently saw a conversation relayed that sounded very familiar to me:

I had a discussion with some of the engineers from Range in 2007 about how to adapt physical laws to their reality.

I remember the feeling of being reactionary – cautious and less dynamic among a crowd that had all the self confidence in the world. We were looking at some black stuff in a bearing – smelly – sticky – BUT IT WAS NOT – NOT – NOT TAR!!!

Why not – because their gasifier did not produce tar – because tar would kill the catalyst.

They really had visions – I remember a senior person saying to me “Of course we can change the law of gravity – NASA could put a man on the moon – it is just a matter of money.”

Everything I could say was – STOP – THINK – REFLECT – SEE – USE YOUR COMMON SENSE. All actions that did not at all match with a dynamic and fast moving venture investment – at this stage they where already 2 months behind schedule.

Perhaps it was the confidence that they displayed — even as things were not going as planned — that kept the media from becoming suspicious. Whatever the reason, the media failed to do their job of being more critical of the claims. There was no investigative reporting; the media lapped up the claims. I understand that positive stories sell — and what’s more positive than a miracle solution to our energy problems? But the media has a responsibility to ask tough questions in cases like this. This is especially important when public funds are involved. As this story correctly identifies, if it’s private money, then it’s just business. But when tax dollars are wasted in this way, not only did we throw money away, but people start to get angry (that’s when autopsy stories sell) and the credibility of the renewable energy sector is damaged in the process. The latter is what I sought to avoid, and yet can anyone argue that the sector hasn’t been damaged by such high profile failures?

Conclusion

It isn’t easy to blaze new paths (especially if you don’t recognize what is and is not a new path), and in no way should readers think I am criticizing failure. That’s the nature of research; most things do not pan out. We need people attempting new things, and many of our tax dollars on research are well-spent. But I prefer that my tax dollars are spent on projects that have received adequate due diligence. (Funding agencies like the Department of Energy are also at fault for their failure to properly vet this project). If a billionaire venture capitalist wants to learn the energy business, he shouldn’t be given a free pass to use public funds to learn hard lessons. If he believes his own hype, let him invest his own money and convince fellow private investors.

Despite their claims of a temporary shutdown, I don’t expect that the government will fork over more funds, especially given Vinod Khosla’s recent admission that the technology doesn’t work. (I have to wonder when he realized this, and why more than $300 million had to be spent so he could learn that lesson). I expect there will be a few more stories, but eventually Range will fade from public memory as just another company whose claims didn’t match their capabilities. If history is any guide, the next stage will be the lawyers moving in to see if they can recover any investor money.

But there are still many companies today that are making grandiose claims. That will continue to be the case as long as grandiose claims receive uncritical publicity which can lead to public funding. Companies like Joule Unlimited, Coskata, Bloom Energy, and KiOR come to mind. Three of the four are Vinod Khosla-backed companies, and their claims are similar in style to those made by Range Fuels. That in itself is not an indictment (and I am not suggesting that these companies are frauds), but isn’t it time for the media to start taking a more critical look? (Have a look at the Coskata link to see one of those typical non-critical views that Range Fuels was given). Once more, public funds are being sought and received, and it won’t take many more failures before “renewable energy” is viewed by almost everyone as a scam.

Next Up…

But how do you dig into these companies to separate what they would like to do from what they actually can do? In the next essay, I am going to offer up a primer in the art of performing due diligence on a renewable energy company. I will detail the kinds of questions that should be asked when covering one of these new companies claiming to have solved the energy crisis if they can only get their hands on a few hundred million tax dollars.

  1. By Walt on February 18, 2011 at 6:00 am

    Robert Rapier said:

    I tried to discuss technical issues with some of their people. While they projected great confidence, it was like we spoke different languages. I wanted to know about heat and energy balances, and they wanted to talk about vision and drive. (That is not an indictment of all Range employees, but they definitely had some people in key positions who didn’t know much about the energy business).

    Next Up…

    But how do you dig into these companies to separate what they would like to do from what they actually can do? In the next essay, I am going to offer up a primer in the art of performing due diligence on a renewable energy company. I will detail the kinds of questions that should be asked when covering one of these new companies claiming to have solved the energy crisis if they can only get their hands on a few hundred million tax dollars.


     

    This
    report documents the National Renewable Energy Laboratory’s
    (NREL’s) assessment of the feasibility of making gasoline via
    the methanol-to-gasoline (MTG) route using syngas from a 2,000 dry metric
    tonne/day (2,205 U.S. ton/day) biomass-fed facility.

    For the
    base case the PGP is predicted to be $16.60/MMBtu ($15.73/GJ) (U.S. $2007)
    for gasoline and liquefied petroleum gas (LPG) produced from biomass via
    gasification of wood, methanol synthesis, and the methanol-to-gasoline
    process (MTG). The corresponding unit prices for gasoline and LPG are
    $1.95/gallon ($0.52/liter) and $1.53/gallon ($0.40/liter) with yields of
    55.1 and 9.3 gallons per U.S. ton of dry biomass (229.9 and 38.8 liters
    per metric tonne of dry biomass), respectively.

    The overall
    plant efficiency was 42.6% (lower heating value [LHV] basis) and the
    carbon efficiency to LPG and gasoline was 31%. The efficiency to the
    desired gasoline product was 37.7% LHV and 28% carbon efficiency. The
    gasifier efficiency was 74.9%. Potential process improvements include
    utilizing more of the tail gases to make products other than heat and
    electricity. Because all of the power for the plant ultimately comes from
    the biomass fed to the plant, any energy efficiency improvements to the
    plant should improve product yields.

    Total project investment
    ($MM) – 199.60

    http://www.nrel.gov/docs/fy11o…../47594.pdf

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  2. By john on February 18, 2011 at 8:50 am

    Robert, it appears you are going to have to start to take joule more seriously.
    They have been peer reviewed and the math works.

    Joule’s renewable fuel tech gets peer review
    http://www.bizjournals.com/bos…..-peer.html

    http://www.springerlink.com/co…..ltext.html

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  3. By BK on February 18, 2011 at 10:18 am

    I’d like to see an accounting of where the money actually went also. How much was really “research” vs. payments to Khosla and his cronies for “management”.
    And why out of all the potential projects out there was he selected to recieve funding for multiple dfferent ones? Something stinks here.

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  4. By rrapier on February 18, 2011 at 12:46 pm

    john said:

    Robert, it appears you are going to have to start to take joule more seriously.

    They have been peer reviewed and the math works.

    Joule’s renewable fuel tech gets peer review

    http://www.bizjournals.com/bos…..-peer.html

    http://www.springerlink.com/co…..ltext.html


     

    John,

    It isn’t that I do or don’t take their technology seriously. Up to this point, they had not released enough details to understand very well what they are doing. I did download their paper last night and will start working my way through it.

    However, up to this point they have been a hype machine. The hiring of John Podesta is a PR move, and it indicates they have their sights set on getting into the public coffers. Maybe their technology warrants it; I want to be careful and not specifically criticize the technology. But their PR strategy has been similar to a Khosla-backed company (Khosla Ventures of course hired Tony Blair — same thing). I am hopeful that people do some serious due diligence on the company before we give them money to play with.

    They don’t even have a pilot plant, and are making very big claims. They clearly have some very capable people working for them, but I wonder if they have people with them who are experienced at scaling up plants. If they did, I would expect that their claims would be much more cautious, because there will be challenges to work through as they try to move out of the lab.

    As a general example of what could go wrong, consider the fact that they are using genetically modified organisms. I remember when I was in college 20 years ago reading about these great new genetically modified salmon that grew much faster than normal salmon. They had an extra growth gene inserted; nothing too exotic. But people were opposed, and 20 years later we are still debating the issue. These are the sorts of unplanned snags that Joule can run into, which is why it is important not to build expectations up too greatly before you even get out of the lab.

    Remember, Range Fuels and CWT both thought their math worked as well. That doesn’t mean Joule’s won’t, but I think they are premature in their hype. The peer review is a nice touch though; at least it gives me something to chew on.

    RR

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  5. By Jeff Frontz on February 18, 2011 at 1:11 pm

    CWT may have filed for bankruptcy, but the [formerly their] plant is about to re-open: http://www.joplinglobe.com/loc…..operations

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  6. By Wendell Mercantile on February 18, 2011 at 1:29 pm

    The hiring of John Podesta is a PR move, and it indicates they have their sights set on getting into the public coffers. But their PR strategy has been similar to a Khosla-backed company (Khosla Ventures of course hired Tony Blair — same thing).

    On old, shopworn ploy, just as the ethanol industry hired former NATO Supreme Allied Commander Wes Clark

    I still can’t figure that out about Clark. Rhodes Scholar, 4-star general, first in his class at West Point, and he becomes a shill for ethanol.

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  7. By Tim C on February 18, 2011 at 2:02 pm

    Walt – regarding NREL’s BTG model, it’s interesting to note that one of the essential enabling technologies in the model is a tar reformer with 99.9% conversion. NREL admits that this reformer doesn’t exist, but they believe that it can be developed. As RR notes, Range Fuels also didn’t think tar should be much of a problem. Overall, though, the NREL BTG model is very good, with lots of detail and clearly stated assumptions. I would love to see $1.95/gallon gasoline from poplar wood.

    Regarding Joule, I would like to hear them comment on how their technology is different from the “Green Freedom” technology developed by LANL. If they don’t have anything better than that, then how is their process “transformative”? How does it even matter?

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  8. By john on February 18, 2011 at 2:50 pm

    Hey Robert thanks for your response, one note:

    They don’t even have a pilot plant, and are making very big claims.

    Incorrect according to this source:

    http://biofuelsdigest.com/bdig…..y-started/

    Joule fuel was reputed by its backers to be competitive with $30 oil. The company is now operating a pilot plant in Leander, Texas; they say they have demonstrated proof of concept on 10 renewable chemicals back in the lab they describe as “blendstock for end products”.

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  9. By rrapier on February 18, 2011 at 2:58 pm

    john said:

    Hey Robert thanks for your response, one note:

    They don’t even have a pilot plant, and are making very big claims.

    Incorrect according to this source:

    http://biofuelsdigest.com/bdig…..y-started/

    Joule fuel was reputed by its backers to be competitive with $30 oil. The company is now operating a pilot plant in Leander, Texas; they say they have demonstrated proof of concept on 10 renewable chemicals back in the lab they describe as “blendstock for end products”.


     

    Hi John,

    I think it comes down to what is considered a pilot plant. It was only a year ago that they had announced that they were going to build that plant in Leander. Most pilot plants that I have ever been around could not be permitted and constructed in a year. So I would have to learn more details about the plant itself before concluding that less than a year after announcing their intent to build a pilot plant they are operating it. Have they only scaled up one piece of the technology, or is this an actual working process of what the commercial process is envisioned to be? I haven’t read their paper yet; maybe there are details in there.

    RR

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  10. By Optimist on February 18, 2011 at 4:46 pm

    RR,
    You’ve hit the intersection of several (disturbing) trends in American culture:
    1. The political correctness culture: it’s more important not to offend, than it is to tell the truth.
    2. The technology is magic myth: this myth started with the computer/software industry and stands on two legs:
    a. Anything is possible, and
    b. You won’t understand.
    3. The professional myth: if you are not specifically trained in this field, you can’t possibly make a sensable comment about it.
    4. Lack of understanding of scientific principles: this is a function of the mess education has become.

    The above explains why the traditional media is so lame, as well as why it is going under (“Don’t miss our special report, right after the break. What you don’t know can kill you!”). Talk radio and other commentators, which don’t play by these rules, are flourishing.

    Oh well, at least RR does not play by the rules. Maybe someday he can start a TV news channel…

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  11. By Rufus on February 18, 2011 at 5:18 pm

    Meanwhile,

    Ceres is growing, and will be marketing in 2012, a genetically modified switchgrass that has less lignin, and delivers 1/3 More Ethanol while using less enzymes, and water.

    http://ethanolproducer.com/art…..anol-yield

    Syngenta will be selling a new corn seed next year that delivers 8% more ethanol, and needs 8% less energy to process.

    Butalco, and others are rapidly improving yeasts for cellulose conversion.

    Inbicon has been running their 1.5 Million gal/yr. demonstration plant for about a year, and have several contracts for full-scale plants in the U.S., and Asia over the next couple of years.

    Enzyme processes are steadily improving, and gasification seems to be stuck in the mud. It’s not what the Government, and the Big Corps want to see, but it looks to me like the “Enzymists” are going to win the day.

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  12. By rrapier on February 18, 2011 at 5:40 pm

    Rufus said:

    Enzyme processes are steadily improving, and gasification seems to be stuck in the mud. It’s not what the Government, and the Big Corps want to see, but it looks to me like the “Enzymists” are going to win the day.


     

    Yet there are commercial gasification facilities operating today at sizes the enzyme guys can only dream about.

    And you don’t think the government wants cellulosic ethanol to win? I have seen government proposals that specifically exclude gasification from being able to apply. Government policy strongly favors cellulosic ethanol; that is who they want to win (which should be obvious by the size of the cellulosic ethanol mandate).

    RR

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  13. By Kit P on February 18, 2011 at 6:12 pm

    “You’ve hit the intersection of several (disturbing) trends in American culture:”

     

    Actually Optimist I would say that the trend is going in a positive direction with the advent of the intranet. It does take a little discipline to sort fact from agenda but the following quote has been around a long time:

     

    Lies, damned lies, and statistics

     

    My boyhood hero was Abe Lincoln who was more or less self educated compare to Washington or Jefferson. If knowledge is power, there is an abundant amount.

     

    “Talk radio”

     

    I remember when Rush Limbaugh first started as a radio talk show host in Sacramento, California at radio station KFBK. At the time, conservative talk show host were unheard of in California. He became popular by tapping into a markets that was undeserved. My sister, the feminist, hated him, although she never listened to him.

     

    I asked my sister if she had ever heard of Dixie Lee Ray as a woman’s role model for my nieces. If they listened to Rush Limbaugh, they would have. How many women governors had been elected at that without following in the steps of her husband or been a accomplished scientist?

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  14. By Kit P on February 18, 2011 at 6:16 pm

    “Yet there are commercial gasification facilities operating today at sizes the enzyme guys can only dream about.”

     

    Not producing biofuel for transportation.

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  15. By Rufus on February 18, 2011 at 7:03 pm

    Robert, I don’t particularly care who wins. It just looks to me like it’s going to be the enzyme guys. As for government? Well, I think it’s reasonable to say that “governments” have always liked BIG projects. They’re easier to regulate, tax, Control. They make a “Big Splash,” and get “Big Votes.”

    The Poets, and Abengoas of the world are concentrating, now, on methods of collecting biomass. This is a MAJOR part of the puzzle. It’s not easy to convince a farmer to go out and plant 500, or a 1,000 acres of Switchgrass when corn, and beans are selling at close to all-time highs when there’s not even a plant in place to process it.

    Also, there’s a short-term horizon built into the BCAP Program.

    The flip side is, you can’t build a $50 Million plant, and have it sit idle while you try to get some farmers growing your feedstock.

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  16. By Walt on February 18, 2011 at 7:41 pm

    Tim C said:

    Overall, though, the NREL BTG model is very good, with lots of detail and clearly stated assumptions. I would love to see $1.95/gallon gasoline from poplar wood.


     

    I could not agree more.  This is what I call a true “bottoms up” engineers model which drills down all the assumptions…dynamically.  It is far different than what might come out of Silicon Valley which are often “top down” models that attract enormous valuations and capital (e.g., Bloom).  I remember these models when I was building a B2B Marketplace with i2 Technologies, IBM, JDEdwards, etc. just before the dot.com crash, and the model had really wild valuations intended to attract the VC community with no basis in reality…as nobody could predict where the internet (dot.com) market was going to go.  It was only up UP UPP and the argument was to generate revenues you just had to use money to pay all your software partners and they would circle it back around to other portfolio companies.  If you developed a “bottoms up” model, it would never make money in reality, as there were no ways to make revenues to cover the monthly/quarterly burn rate…but of course, I was not from the valley, and just walked off the 120′ yacht in New York harbor as the only one unwilling to take the bait (and switch).  I learned some valuable lessons in 1998-1999 that have been seared in my conscience forever.  Give me a bottoms up model everyday…the valley boys can have the other one! 

    What I find interesting is the carbon efficiencies of 31% and 28% respectfully.  That could be improved with scale and more CAPEX, but for a $200 million investment it is really impressive to get those yields.  I would never have believed it before now…as those efficiencies can be improved with more capex and energy-efficiency improvements after looking at the document.  I think it is fair to argue there is a “happy medium” between throwing all sorts of CAPEX investment into squeezing out better carbon efficiencies…and still keep down your OPEX costs (e.g., cost of capital expense, depreciation expense, etc.).  It is like jumping from 2″ pipe to 3″ pipe…better efficiencies, but the CAPEX can seriously hurt the project from even getting off the ground.  Better to spend a little bit more in design efficiencies and put many more plants in the field than trying to squeeze out the highest carbon efficiencies at the highest CAPEX.

    The model has some really excellent thought…and to run at those efficiencies at the low CAPEX is very interesting.  I see possible improvements and am sure others will too.  Gasoline at that scale might come through some day…I hope.  I did mean to drop back here…but I do hope when we all evaluate these technologies we look at the model design as well…not just the key assumptions/drivers alone.

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  17. By rrapier on February 18, 2011 at 7:49 pm

    Kit P said:

    “Yet there are commercial gasification facilities operating today at sizes the enzyme guys can only dream about.”

     

    Not producing biofuel for transportation.


     

    You know less than you think you know.

    RR

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  18. By Wendell Mercantile on February 18, 2011 at 9:37 pm

    …with the advent of the intranet.

    Kit P.

    Please tell me more about this ‘intranet” thing.

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  19. By Kit P on February 18, 2011 at 11:21 pm

    “Please tell me more about this ‘intranet” thing.”

     

    Wendell if others had asked that I would have considered it a rhetorical question but Wendell you make little effort to check your facts. It does not hurt to be a little skeptical. Journalist have a habit of quoting each other without knowing what they are talking about. For example, NPR was discussing toxic chemical effect on fish in polluted waters. Turns out that they were talking about PCBs which are persistent in the environment but not particularly toxic. It is a property that can be looked up in a table but I would not expect the average person who has heard thousands of news reports fear mongering PCB to accept my statements. From a professional point of view, find legacy PCBs or asbestos at work means an expensive cleanup. It will mean bad press. However, I would not be personally concerned about PCB exposure but I would worry about asbestos’

     

    “What you don’t know can kill you!”

     

    If the news story was a timely warning about carbon monoxide poisoning in the winter or food poisoning from potato salad in the summer, than the news would be a public service. However, that is not generally the case.

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  20. By JN2 on February 19, 2011 at 2:58 pm

    RR, is there an automatic way to block any post with Kit P in it? Or do I just have to continue to skip them manually? It’s a noise v signal issue…

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  21. By Lucas C on February 21, 2011 at 5:51 pm

    There are many articles out on solar companies like SolarCity, along with claims that solar will be at ‘grid parity’ in a few short years. Clearly you are focused on biofuels & oil, but would like to see your commentary on these.

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  22. By russ-finley on February 21, 2011 at 9:51 pm

    The media will always go for headlines that attract readership. Positive news about breakthrough technologies, even if not true,  tend to trump skeptical thoughts. Popular Mechanics, for example, is best described as technical fiction writing.

    This for-profit motive by the lay press disseminates a great deal of disinformation. They are under no obligation to match sensationalist headlines with later headlines explaining  why the sensationalist one turned out to be bunk. The public is left with an unending string of false headlines planted in their collective memories.

     

    Biodiversivist

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  23. By russ on February 22, 2011 at 9:14 am

    @ Lucas C – What you need to know from SolarCity is what assumptions they are making about subsidies and incentives as well as their calculations are normally based on CA high peak rates – say 45 cents or thereabouts.

    Anyone I have read about making parity claims for solar compared to other types of power generation load up on negative incentives for the other types and assign a very high dollar value to them.

    They also never mention storage of any type. Without that the only real use for solar is peaking power where the AC load is high.

    People also want to compare solar to the lowest efficiency turbine peak power suppliers – not to a full time operated combined cycle gas plant.

    To make solar comparable in cost to other sources a lot of heavy duty book cooking has to go on.

     

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  24. By Katie Fehrenbacher on February 22, 2011 at 11:04 am

    This is in response to John and his question on Joule. I actually asked Joule earlier this week on the pilot plant and production volumes and this is what they said:

    We are currently testing our processes for both diesel and ethanol at our pilot facility in Texas. The facility is not designed for production/volume, but rather to test a number of variables related to the microorganisms, bioprocessing, system, etc. We intend to begin construction of a 10-acre demonstration plant in the second half of 2011 (location TBA), which will ultimately scale to 1,000 acres and 15 million gallons of diesel per year.

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  25. By rrapier on February 22, 2011 at 11:13 am

    Katie Fehrenbacher said:

    This is in response to John and his question on Joule. I actually asked Joule earlier this week on the pilot plant and production volumes and this is what they said:

    We are currently testing our processes for both diesel and ethanol at our pilot facility in Texas. The facility is not designed for production/volume, but rather to test a number of variables related to the microorganisms, bioprocessing, system, etc. We intend to begin construction of a 10-acre demonstration plant in the second half of 2011 (location TBA), which will ultimately scale to 1,000 acres and 15 million gallons of diesel per year.


     

    And if that is the extent of the answers you received, those are extremely elusive answers. I would follow up with “But what kind of volumes have you actually achieved? Surely if you are making cost projections on a commercial facility, you must have some sort of production volume to base that on.” If that number is very small lab scale, then their projections aren’t grounded in reality. That doesn’t mean they will never get there, but the odds are stacked strongly against them if they are projecting commercial results from lab scale volumes. The others who failed were all sure they weren’t going to have any issues scaling up either.

    RR

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  26. By Random on February 22, 2011 at 4:01 pm

    Hi Robert
    Seems Khosla has taken exception to the WSJ article and has pointed out factual errors in that reporting as well as yours. Both you and WSJ claim he own stakes in Cello and E3 and push it. He has denied both. If he is correct then I would say you are also, it appears, that immune from lazy/fact free journalism…. Just saying
    http://www.greentechmedia.com/…..ge-Fiasco/

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  27. By rrapier on February 22, 2011 at 5:33 pm

    Regarding Cello, here is a report on court testimony from Khosla’s right hand man:

    The leadership of California-based Khosla Ventures was so impressed with Baldwin County inventor Jack Boykin and his claim that he has unlocked the secret to turning wood chips and hay into cheap diesel fuel, they agreed to give him $25 million to build three manufacturing plants and to spend millions more each year to operate them, Khosla partner Samir Kaul testified in Mobile’s federal court on Monday.

    Kaul told jurors that he first learned of Boykin and his potentially “game-changing technology” in 2007 from David Bransby, an Auburn University agronomy professor.

    Kaul asked Khosla’s chief scientist to meet with Boykin. His verdict, Kaul said: “Boykin is the real deal and he’ll get funding one way or another.”

    People can say a lot of things and revise history, but that court testimony indicates that Khosla’s firm was a bit more infatuated with the technology than he is now letting on.

    RR

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  28. By rrapier on February 22, 2011 at 4:08 pm

    Random said:

    Hi Robert

    Seems Khosla has taken exception to the WSJ article and has pointed out factual errors in that reporting as well as yours. Both you and WSJ claim he own stakes in Cello and E3 and push it. He has denied both. If he is correct then I would say you are also, it appears, that immune from lazy/fact free journalism…. Just saying

    http://www.greentechmedia.com/…..ge-Fiasco/


     

    Hi Random,

    Please identify the factual error in my report. Please show where I said he has an ownership stake in E3. Quote if if you don’t mind. He certainly promoted them in his essay My Big Biofuels Bet, but I didn’t say he invested in them. I said that he promoted them as one of the most promising solutions. So who is doing the lazy reporting again?

    He did invest in Cello; that’s a fact. 

    Here is Greentech Media on the Cello story from a couple of years ago:

    Cello Energy isn’t listed on Khosla Ventures’ list of biofuel companies. But the well-known green VC firm has put $12.5 million into the Alabama-based startup, which the EPA expects to be producing 70 million gallons of ethanol from trash and biomass by next year.

    Beyond the initial $12.5 million, Khosla agreed to additional funding for a second and third plant in the contract, Woodburn said.

    Those plants, along with a fourth new one, are meant to eventually reach 50 million gallons per year production, but Cello’s shorter-term goal is to be producing 70 million gallons per year by next year, he said.

    He is trying to distance himself now since they were convicted of fraud. He wants to downplay the nature of the investment, but the very fact that he invested is fair game considering he is out there trying to get at public funds. His track record in the energy business should be closely scrutinized.

    As I have said, the ultimate irony was him recently saying the gasification is a dead end and companies like Range would have to switch to fermentation technologies. Now he is here again promoting Range and saying it was a good investment.

    RR

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  29. By Oxymaven on February 22, 2011 at 9:42 pm

    I’m a bit curious about Khosla’s statements about how much the Range facility has cost. He notes that they got “about half” of the $76 million DoE grant, and that ‘Phase one was completed mostly as planned with 60%-plus equity match by Range’.
    In April 2008 Range announced it had received another $130 million from private investors, and a month later indicated in a filing it had actually received $158 million. Less than a year ago, USDA announced an $80 mil loan guarantee for Range – what has happened to that private and public money? Will USDA have to cover the $80 million loan made by AgSouth Farm Credit? Since Uncle Sam has played such a major role in this effort, I would think it would be nice to know how much federal funding has actually been expended here. Maybe there are some ‘lessons learned’ that can help future DoE and USDA grants and loan guarantees.

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  30. By rrapier on February 23, 2011 at 2:30 am

    Oxymaven said:

    I’m a bit curious about Khosla’s statements about how much the Range facility has cost. He notes that they got “about half” of the $76 million DoE grant, and that ‘Phase one was completed mostly as planned with 60%-plus equity match by Range’.

    In April 2008 Range announced it had received another $130 million from private investors, and a month later indicated in a filing it had actually received $158 million. Less than a year ago, USDA announced an $80 mil loan guarantee for Range – what has happened to that private and public money? Will USDA have to cover the $80 million loan made by AgSouth Farm Credit? Since Uncle Sam has played such a major role in this effort, I would think it would be nice to know how much federal funding has actually been expended here. Maybe there are some ‘lessons learned’ that can help future DoE and USDA grants and loan guarantees.


     

    Khosla’s statements are very contradictory. As much as I am tired of writing about him, I am getting so much e-mail over his essay that I may have to address it.

    RR

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  31. By Optimist on February 25, 2011 at 2:29 pm

    Seems Khosla has taken exception to the WSJ article and has pointed out factual errors in that reporting as well as yours. Both you and WSJ claim he own stakes in Cello and E3 and push it. He has denied both. If he is correct then I would say you are also, it appears, that immune from lazy/fact free journalism…. Just saying

    He, he, he…

    Hi Random, or should that be Random BS?

    Word of advice: Accusations of lazy/fact free reporting are taken pretty seriously around here. You better do your homework before you level those charges. Else you might find yourself exposed as a lazy/fact free reporter yourself

    BTW, you’re gonna treat everything Vinod Khosla says as truth? I’m sure he’d love to sell you something.

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  32. By rrapier on November 24, 2011 at 12:42 pm

    GeorgePBurdell said:

    I hope you follow up with the autopsy and find out where the money went.  While this mega million dollar plant was being built Soperton went on as a sleepy Georgia town.  The plant was top secret, you couldn’t see it, visit it and never saw any economic change due to the plant construction.


     

    What’s funny is that Solyndra has gotten huge press coverage, but Range Fuels has been largely ignored. The latest was that they were going to officially declare bankruptcy soon, but I still haven’t seen an announcement. I would guess they are under some pressure not to declare bankruptcy until the Solyndra thing settles down some.

    RR

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  33. By GeorgePBurdell on November 24, 2011 at 1:16 am

    I hope you follow up with the autopsy and find out where the money went.  While this mega million dollar plant was being built Soperton went on as a sleepy Georgia town.  The plant was top secret, you couldn’t see it, visit it and never saw any economic change due to the plant construction.

     

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