EcoLogic Blog

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.

Dr. James Sweeney, economist and director of the Precourt Institute for Energy Efficiency at Stanford, gave the closing remarks. He cautioned (much like David Victor’s comment about Silicon Valley getting “irrationally exuberant” about cleantech) that we get too excited about relatively small gains related to energy: “We’ve got to stop looking at the tiny steps we’ve made so far and thinking we’ve got a solution to the whole energy problem.” Later, when the other bloggers and I were at dinner with him and representatives from Chevron and API, he told us:

“There’s no silver bullet solution to the energy problem. There’s not even silver buckshot. We should be thinking in terms of silver birdshot!”

In other words, getting these technologies to market and scaling them up to commercial use should be the critical focus. It’s great if there’s one manufacturer out there making an efficient solar power system, but that system then needs to be on every home in American to really make a difference. And it’s got to make economic sense for the homeowner to want to put the system on their house.

Our energy system is changing, and the panelists discussed the ways their respective businesses are strategizing for it:

Trae Vassallo of the VC firm KPCB lamented, “”Private investors are spending more than government on this issue - that’s a problem!” Forty percent of all of KPCB’s investments are going towards energy. Their “greentech” portfolio emphasizes three areas: Clean electricity, energy efficiency, and clean transportation.

“This isn’t going to be a winner-take-all energy market. There are going to be lots of solutions to the problem.”

Paul Siegele of Chevron believes we should focus on three areas: Supporting rational energy policies, expanding current supplies, and conserving natural resources:

“Global demand for oil is straining the energy system. The world’s not running out of oil, but there are accumulating risks to the ability to deliver the demand. The American public shouldn’t be asked to trade off prosperity to cut greenhouse gases or diversify the energy supply. It’s unreasonable to expect other countries to expand their access to energy for our needs when we restrict our own.”

Jackalyne Pfannenstiel of the California Energy Commission noted later in the discussion that California has kept its energy consumption flat since the 1970s, thanks to energy efficiency. And its GDP has kept up with the nation as a whole. It’s not necessarily a trade-off.

To clean up their energy system even further, California is focusing on two big strategies: Energy efficiency and renewables. CA has a law that says businesses can’t have a long-term contract (longer than five years) with coal companies because of the risk of impending carbon regulation that could skyrocket fossil fuel prices.

David Victor of Stanford said that there’s going to need to be a political strategy too, and that’s something Silicon Valley isn’t used to. We need figure out what sort of regulatory strategies need to happen in tandem with all of this innovation.

All panelists seemed to agree that energy efficiency is and should be a major focus to curb our energy use and clean up our emissions. But we still need vast amounts of energy…what should we use?

Chevron is excited about geothermal power, and they are in fact the largest producer of the power on the planet (13% of all geothermal generation, mostly in Indonesia and the Philippines where they were already drilling for oil). Siegele continued:

“We’re going to need every molecule of alternative energy. I’m not dismissing it, but if you look at the numbers of where the world is going and who’s driving the price, all of the forms of energy are going to grow. The era of findings cheap oil is over. That’s not to say there’s not an abundant supply, but it’s getting to be very costly to get it. On the other hand, a lot of these good other energy solutions have a distribution problem.”

He was quite straightforward about Chevron’s priorities. Although the company is spending nearly $3 billion in the next three years on renewables, they spend “considerably more” (as in most of their $72 billion after-tax profits) on conventional oil and gas technologies like deep oil drilling and oil shale development.

David Victor of Stanford noted that energy markets are going to get “very interesting” when liquid fuels and electricity fuels like coal start competing with each other. For example, right now liquids are used in transportation fuels and coal makes electricity. Crossing those resources between the markets is something we haven’t done before.

“But the real test of new energy technologies,” he continued, “will be when the price of oil comes down. Can biofuels or more efficient vehicles survive then?”

Jackalyne Pfannenstiel, chair of the California Energy Commission, is concerned about the current focus on high gas prices.

“When this happened in the 1970s and 1908s, people waited it out. If we do that again, we’re not going to take advantage of the opportunities in front of us! I want to hear that investors are taking advantage of this. We can’t hold our breath while prices are high and then go back to exactly what we were doing before. There’s got to be real change.”

But the general consensus on the panel seemed to be that we’re not moving fast enough on renewables to make them a significant market share. Therefore, fossil fuels are going to be our future (85% of our energy, one panelist said, until at least 2030).

Pfannenstiel did point out that although California won’t make its 20% renewables goal by 2010, it will probably hit it in 2011 and 2012. Governor Schwarzenegger wants to make renewables 33% of the energy system by 2020. Pfannenstiel thinks that’s actually going to be easier than the first target of 20% because the infrastructure (transmission, for example) will already be in place.

“And this drive for renewables is driving other technological innovations,” she explained. California’s publicly owned utilities are installing new “smart meters” on homes that will give homeowners huge amounts of information on how they use their energy, when they use it and what appliances, machines, etc in their home use the most. This is leading other technologies like big in-home displays for the information, smart grids, etc. We’re driving new technology with this new information.

Early on in the discussion on energy, the moderator, David Jefferson of Newsweek, profiled himself: He uses efficient compact fluorescent lightbulbs, but not consistently. He cares about polar bears, but cranks the air conditioner. He telecommutes, but he does it so he can work from home in sweatpants, not because he saves gas from not driving his car.

In a lot of ways, he’s just like the rest of us.

This broad but shallow care for the earth/energy/ begs the question: Instead of asking ourselves, “How can we influence consumers to make smarter energy choices?” instead of “How do we force consumers to make smarter energy choices?”

Most of the panelists agreed that people are concerned about green but don’t want to change radically. To be green has to be easy. Trae Vallasso of the venture capitalist firm Kleiner Perkins Caufield and Byers said that it shouldn’t be about changing behavior, but about finding better business opportunities. Money in the pocket - or money taken out of the pocket - will influence consumers’ behavior.

That’s why efficiency may be the best route to curbing energy use; not a silver bullet of course, but it is the cheapest, fastest, most efficient way to cut our energy use. It’s a major investment area for Kliener Perkins, Chevron is constantly looking for new ways to make operations more efficient, and Californians live the most energy efficiently of anyone in the nation. We know it works, it saves money, emissions and time, and it’s being done right now. As Paul Siegele of Chevron agreed: “The cheapest barrel of oil is the one you don’t use.”