There’s been a lot of talk in the media and the blogosphere about what’s going to happen with renewable energy investments and efforts to regulate carbon now that the economy has taken a dive. Basically, can we afford to still be green?

In most instances I say we can. Sure, a barrel of oil is cheaper now. But as we know, that price is volatile. Continuing towards greater energy independence from fossil fuels and towards homegrown sources of energy will only help us in the long run and continue to strengthen the rural economies that (many times) are the epicenter of these resources, like biofuels and wind power.

In an interesting twist, the Wall Street bail out bill contained provisions extending the tax credits for wind and solar power plants. These are sectors that should continue to grow if we truly want to move toward a more secure energy system. What’s more, both Sen. Obama and Sen. McCain support some sort of federal law regulating carbon emissions, a major source of global warming. And more than 30 states have mandates for a certain amount of their energy to come from renewable sources. So this isn’t going to all disappear overnight.

But that’s not to say it’s all rosy, either. European nations like Italy and Poland are backpedaling on their commitments to cut carbon regulation and U.S. venture capitalist money is shrinking in some areas. While there may be real funding cutbacks in some sectors, however, policymakers must keep us on track and businesses must keep pushing the technology that can get us cleaner and greener. It’s up those of us supporting clean energy policies and solutions to communicate the economic benefits of these technologies, whether they be jobs in rural areas or energy efficiency savings. Smart energy and clean technology aren’t luxuries that will disappear with a tight market, but they are a way of life that we can grasp more fully if we keep our eye on the prize.

Coca-Cola’s green efforts got attention recently for its Eagan bottling facility (full disclosure: Midwest Coca-Cola Bottling Company is a client of Tunheim Partners). The Eagan bottling plant is using some innovative ways to reach its goal to recycle 100 percent of the amount of material that is consumed at the location. For example, the plant recycles nearly every piece of cardboard it receives and has bought a new machine that crushes plastic and aluminum quickly and cleanly, which allows Coke to send the waste directly to a recycler.

In addition, one of the more unique energy-saving techniques is the use of two inch tall plastic tubes that expand into full sized plastic bottles when heat and air are applied. Click on the above picture to watch the video and see how this works. The amount of gas saved by shipping the tiny bottles should pay for the system in about four years.

“If we ship [the regular size bottle] across the road we need about 8.7 truckloads of these to make one truck load of [the tiny bottles],” Stan Mathews, Production Manager of the Coca-Cola Eagan plant told WCCO’s Frank Vascellaro. “So we’re basically saving 7-and-a-half trips by sending it in [the regular size bottle] configurations versus [the tiny bottle] configuration.

To learn what else Coke is doing to shrink its carbon footprint click here.

More than 800 people gathered at the FARGODOME on August 21 to hear billionaire and oil tycoon T. Boone Pickens talk about his plan to reduce the United States’ dependency on foreign oil. This stop was organized by Tunheim Partners and others and was one of several energy town hall meetings that Pickens has been speaking at across the country to educate the public about the importance of renewable and cleaner energy, also called the Pickens Plan.

Pickens attracted a variety of media outlets from Fargo and the surrounding area, as he detailed how clean natural gas and the placement of wind turbines across the Great Plains will help reduce the outrageous $700 billion the United States is currently spending on foreign oil each year.

Rep. Earl Pomeroy, D-N.D., helped introduce Pickens, who closed his speech with lively questions from the audience and a challenge to the next presidential administration to tackle this issue within the first 100 days in office.

Keep an eye out for other town hall meetings around the Midwest, Pickens’ TV ads and his social sites like Twitter, MySpace, Facebook, LinkedIn and YouTube.

The renewable fuel industry will be paying particularly close attention to this year’s election. As you might recall, the great ethanol boom of 2007 was the reaction to the federal government’s support of renewable fuels. A little more than one year later, corn-based ethanol has experienced a roller-coaster ride of political, investor and public support. As a result the industry has a tarnished reputation that has left some American citizens questioning its role in our country’s energy independence and some politicians looking for ways to reduce federal support. This includes the 51 cent blender’s credit (which will be reduced to 45 cents in 2009) and the 54 cent import tariff on foreign-produced ethanol.

Earlier in September during the Republican National Convention, the GOP voted to support John McCain’s opposition to government mandates and subsidies for the U.S. ethanol industry. In its 2008 policy platform, the GOP stated that the free market, not the government, should control how much ethanol is blended into gasoline. McCain has long opposed tax breaks for ethanol and the tariff that protects it from imports.

This is a strong move away from the Bush Administration’s support for the U.S. ethanol industry which calls to expand the use of ethanol to reduce dependence on foreign oil and increase revenues for farmers. As a part of the Renewable Fuels Standard (RFS), the U.S. will produce 36 billion barrels of ethanol per year by 2022.

In response to the GOP’s new stance, Democratic presidential nominee Barack Obama has reasserted his support of federal requirements to use ethanol as a way to reduce reliance on oil imports.

Both Democrats and Republications do support an increased push for developments in cellulosic technology to produce ethanol from non-food inputs rather than corn. This is ultimately where the future of renewable fuels is headed in a matter of years.

Some industry analysts believe that the removing ethanol mandates only make the transition to cellulosic ethanol more difficult. These analysts argue that the development and success of the cellulosic ethanol industry will be derived from the infrastructure created by the corn-based ethanol. It is their belief that eliminating federal support for renewable fuels will ultimately discourage investors and slow the necessary technological advances needed for cellulosic ethanol.

Still there are many business and political leaders that believe a free market will be a better way achieve the needed renewable fuel advancements without the current incentives and mandates from the U.S. government.

The debate on how the country should move forward with our renewable fuels initiatives will be a heated topic during the upcoming presidential election. As our country continues its quest to become more “green,” it will be interesting to see how the public reacts to upcoming ethanol policy debates. Will the country rally behind the ethanol industry or force it to stand on its own feet without assistance from the government?

We all remember the great food vs. fuel debate of 2007. Many critics were quick to point at corn-based ethanol as the primary culprit for a rise in food prices. Although most experts will agree that higher fuel costs have a greater impact on food prices, it still forces renewable energy proponents to continuously look for improved sources of clean energy. As a part of this ongoing trend, recently a large step was taken toward the production of a cleaner burning ethanol that does not require any food-based inputs.

During this month’s American Coalition for Ethanol conference in Omaha, Neb, Poet – one of the world’s largest ethanol companies – announced it has neared completion on one of the country’s first cellulosic ethanol plants. [Poet is not a client of Tunheim Partners]

Although the plant will be considered a pilot operation, producing only 20,000 gallons, it is the first significant step toward the commercial production of cellulosic ethanol. Using corn cobs and stalks for its primary input, the plant is scheduled for completion by the end of the 2008 and will be adjacent to Poet’s already existing 9-million-gallon ethanol plant located in Scotland, S.D.

Why is this significant? Because with the rising demand for ethanol (a federally mandated 36 billion gallons per year by 2022), there simply is not enough corn to meet this need. Nearly 21 billion gallons per year will need to be produced by cellulosic ethanol. Also, creating ethanol from alternative inputs such as woods, grasses and non-edible plants parts will help alleviate high corn prices and allow farmers to market new inputs traditionally thought to be waste.

Once the technology is perfected, Poet plans to implement the same process to other plants across the Midwest. If successful, Poet’s new type of hybrid plants will be able to take corn into one side of the plant and corn stalks into another, and use both inputs to increase the overall plant production of ethanol. According to Poet, this new cellulosic technology is capable of producing 11 percent more ethanol from each corn bushel and 27 percent more ethanol from an acre of corn.

“It is no longer a question of if, but of when we will produce cellulosic ethanol,” commented Poet CEO and President Jeff Broin. “I don’t know if I could have said that even one year ago.”

According to the DTN Ethanol Center, Poet was one of six companies awarded a total of $385 million in grants from the U.S. Department of Energy in February 2007, to develop the first generation of cellulosic ethanol plants. [Full disclosure, DTN is a client of a Tunheim Partners]

Since that announcement only one other ethanol company, Canadian-based Iogen Corp, has made plans to build its first commercial wheat straw-to-ethanol plant in British Columbia.

Although analysts believe the complete introduction of commercialized cellulosic ethanol is still at least two or three year away, this first step by Poet will definitely be a push for the other major U.S. ethanol companies to speed up their own cellulosic research and development efforts.

[Click here to listen to an interview with Poet CEO Jeff Broin]

The hybrid trucks work by combining diesel and electric power and converting braking energy into supplementary electrical power. The trucks also don’t emit any fumes when idling for unloading.

The trucks are the largest hybrid electric delivery trucks in North America. They produce 37 percent fewer emissions and use 32 percent less fuel than standard trucks. They’re even customized for the regular stopping and starting needed in urban areas.

Check out the pictures and media coverage of the event that included Minnesota Governor Tim Pawlenty and Coca-Cola Enterprise CEO John F. Brock unloading the first cases! 

Coca-Cola Enterprise CEO John Brock addressing the crowd.

Pulling out in one of the new trucks!

Minnesota Governor Pawlenty loading up his dolly.

Media coverage included: Finance and Commerce, Star Tribune, Pioneer Press, ThisWeek, MPR, WCCO and KSTP.

Politicians and even some oil companies are part of this shift away from the question “Does global warming exist?” to “We have to do something about it.” That’s not to say everyone agrees on the solutions; for example, how coal or even nuclear power fit into our energy mix is a huge area of contention. We’re in to the nitty-gritty of the problem: which solutions are the best to use, who pays for what, how do we respond to markets or populations that are negatively impacted by our decisions?

With all of the solutions out there (many point out that there is no “silver bullet” to the global warming problem but rather “silver BBs”), we’re going to see an increasingly vocal debate on which technologies and policy mechanisms will create the most change, the best change, in the shortest amount of time. There are going to be growing pains as we transition to a clean energy economy. Successful points of view will come from those who frankly address how their technologies or ideas may impact certain sectors of the economy, how they plan to respond to those risks, how much the change will cost, who will pay for it and why.

After the morning panel discussion, AWEA held a news conference with the panelists. This is an excerpt of the questions from reporters and bloggers (including one from yours truly) and the panelists’ answers.

Q: General Clark, what would federal energy legislation look like to you?

General Clark:

“Big picture legislation would look like cap and trade legislation, benchmark goals and a timeline, incentives, research and funding, energy efficiency standards apart from the cap and trade system and incentives to promote energy efficiency. If you put those in and probably some other pieces like dealing with the strategic petroleum reserves, you could address energy security in terms of infrastructure and protection.”

Wood didn’t think government was the most effective way to create change. What it should do is create a market, he said, like with renewable energy standards, and then let the market work itself out.

But, Clark responded, you do need a regulatory piece when you’re talking about carbon sequestration or nuclear power. To launch technologies like these, we’ll have to have a public-private partnership.

“…There are winners and losers as you move forward. It’s who gets what, how much, how soon that determines whether these programs work or not. Emphasize the best technology and spread the profit opportunities around in a fair way. Spread it wide enough to pick up the little producers as well as the big producers.”

I thought about the American Petroleum Institute/Newsweek energy series last week at Stanford, and how a few of those panel members said the real test of renewables would come when the price of oil comes back down. And so I asked these panelists: “If the price of oil were to plummet tomorrow, how would this effect renewable energy markets and the political will to keep moving in this direction?”

General Clark answered first, noting that although we’re at a time when the price of oil and the awareness helps the drive towards cleantech, the fundamentals of energy policy – like the cost of oil extraction – don’t change with the price of oil exactly. Oil prices are certainly a stimulus to cleantech, but regardless of the price of oil, it’s still a matter of national security and climate change.

Podesta:

“When I was in the White House [as President Clinton’s Chief of Staff], oil was $13 a barrel…but we didn’t capture what the cost of that all meant to climate change, the economy, and the effect it had on national security like the regimes in the Mid-East. We need to learn from that experience.”

Wood:

“Even at $65/barrel, you could still do corn ethanol and other more efficient fuels profitably. I think we’re there and it’s going to take time to change out the auto fleet but I think we still will.”

Next, a reporter asked whether the climate bill in the Senate could put coal on the right track?

Wood was skeptical that Congress could deal efficiently with a topic as complicated as energy and global warming. Instead, he said, we should have a bill that either says “Coal, you’re over with” or “Coal, you have to get cleaner.” Although there have been a number of states who have just said “no” to coal, he questioned: can we do that as a nation?

Goodell completely agreed with Wood except he thought such a straightforward move on coal would be politically impossible:

“You’re asking politicians to put their finger on the red button…It’s easier to do it if it looks like you’re doing something else rather than to just say what you’re doing. It’s one of the hottest political issues right now.”

Then Podesta made an interesting point: If Congress can’t pass a bill to regulate CO2, the EPA now has the authority to directly regulate CO2 from power plants. “I think [that option] can be a backstop to partisan gridlock.”

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But like the states that have put renewable energy standards in place and are now getting into the dirty details, the details of national CO2 regulation will get at least as messy, especially when we start talking about who’s going to pay for what. So how far down into this new cleantech market does government legislate? Yesterday afternoon, I arrived to a session late but just in time to hear a panelist practically yell:

“If government’s going to create the markets then they can’t set the prices! You either regulate [emissions] or you don’t, but a bill that creates a ‘free market’ and then sets a price or price limit will fail. That’s what Europe did and it didn’t work. Let the market decide.”