Blue Diamond Ventures Inc (BLDV)

[TASHI]

Powering the future: Obama's energy plan could create opportunities here

http://www.theadvertiser.com/article/20081207/NEWS01/812070313/1002

Jeff Moore • [e-mail] • December 7, 2008

While the oil and gas industry remains at the heart of Acadiana's economy, the area is also poised to take advantage of alternative energy initiatives proposed by President-elect Barack Obama.

Obama's New Energy for America plan proposes several changes to lessen the country's dependence on foreign oil.

Several of the plan's mid- to long-term proposals could have a major impact on companies already pursuing alternative energy in Acadiana.

Alternative energy refers to any source of usable energy intended to supplement or replace conventional energy sources such as fossil fuels.

Solar power, wind power and fuels produced from agriculture all have enjoyed newfound interest in recent years because of concerns about unstable oil prices, global warming and war in the Middle East.

The New Energy for America would set minimum requirements for alternative energy production over the next few decades.

That could create big opportunities for local companies at the cutting edge of the green energy movement.

Solar

Obama's plan seeks to reduce greenhouse gas emissions by 80 percent by 2050. The policy would require industries to pay based on the amount of pollutants they release. A portion of the receipts, estimated at $15 billion per year, would be used to support the development of clean energy and energy-efficient improvements.

Among those likely to benefit from this investment are companies that specialize in solar power.

Solar power systems use silicon cells to convert sunlight into usable electricity for heating, lighting or ventilation.

With a 50 percent tax credit on solar systems up to $25,000, Louisiana is the most solar-friendly state in the country, according to the Database of State Incentives for Renewables and Efficiency.

When combined with a 30 percent federal tax credit, residents can save 80 percent off the cost of installing a solar system in their home.

Louisiana Solar Solutions began installing solar systems in homes in Lafayette last year. The company has installed five systems so far this year, and figures to install many more as consumers become aware of possible savings.

"There was just not a market for any of this until we got tax credits," said Collin Bercier, owner of Louisiana Solar Solutions. "With the tax credits, it's made it affordable."

Bercier said the average solar system costs about $25,000 and produces about 450 kilowatt hours of electricity per month.

With tax credits knocking $20,000 off the installation price, energy savings can allow the system to pay for itself in about two years, Bercier said.

The local academic community is incorporating solar power in its curricula as well.

UL is one of 20 schools in the world to participate in the 2009 U.S. Department of Energy Solar Decathlon in Washington D.C.

Team Beau Soleil, meaning "sunshine" in French, is designing and building a Cajun-style cottage that runs on solar power.

"There's no better way for the students to learn than to physically design and build one of these systems," said UL Associate Professor Geoff Gjertson.

"By the time we're done with this competition, they will be experts in the field of sustainable energy."

At Louisiana Technical College in Lafayette, a dozen local residents are in the middle of a two-week solar electric installer training course.

The training is one of the requirements needed to be a solar system installation contractor in Louisiana.

Robert Schmidt, of Slidell, said he took the class because he is interested in getting into the solar industry.

A recent graduate of LSU, he plans to start a business in Baton Rouge, Intelligreen Energy, with two partners in the engineering and construction fields.

"The solar industry is growing by about 50 percent each year, so obviously there's a lot of potential there," Schmidt said.

Louisiana Technical College recently received a $1 million grant to provide instruction in alternative energy.

The college offered an outreach course on the basics of alternative energy this fall, and will begin offering a one-year certificate program in alternative energy systems next year.

"Our vision there is to develop a trained workforce in this industry," said LTC instructor Merlin Landry.

"At this point, there's not much in the area, but it's growing quickly. As it does, we're trying to get ahead of the curve and be able to prepare people for these types of positions."

Biofuels

Obama's New Energy plan also pledges to invest $150 billion over the next 10 years in private, clean-energy initiatives, including the development of biofuels such as cellulosic ethanol, biobutenol and other new technologies. The plan calls for the production of at least 60 billion gallons of advanced biofuels by 2030.

Louisiana is in position to be one of the leading areas for the development of alternative fuels, said UL assistant professor of renewable resources Barbara Benson.

The state is No. 1 in the nation in production of agricultural biomass that can be converted into electricity or fuel, she said.

"I see that as being a real potential for alternative fuels," Benson said.

Verenium, a Massachusetts-based company, has built a demonstration-scale plant in Jennings that makes cellulosic ethanol from sugarcane bagasse.

The plant, the first of its kind in the country, produced its first ethanol this harvest season, and is expected to be running at full speed early next year, producing up to 1.4 million gallons a year.

Next year, the company plans to break ground on its first commercial-scale plant, which could produce 25 million to 30 million gallons of ethanol annually.

The company has targeted sites from Texas to Florida for the facility, including at least one in Louisiana.

"I would foresee a fleet of them all along the Gulf Coast region shortly after that," said Verenium spokeswoman Morgen Grandjean.

Benson and other scientists at UL's Department of Renewable Resources are currently studying the conversion of algae into biofuel.

Considered the holy grail of biodiesel feedstocks, algae holds a thousand times the energy potential of other food crops and has been a focus of Air Force research for jet fuel, once researchers learn to convert algae economically.

Sustainable Fuels, owned by New Iberia attorney David Groner and partner Mike Valls, plans to build a biodiesel plant at the Port of West St. Mary in Baldwin.

The plant will turn waste vegetable oil into 5 million gallons of biodiesel annually.

Sustainable Fuels figures to break ground on the plant during the first quarter of 2009, Groner said. It is expected to be fully operational toward the end of the year.

Enviro-Diesel produces about 750 gallons of biodiesel a week at its facility in Carencro. The company collects waste oil from local restaurants and converts it into a clean-burning fuel.

Co-owner Tim Diesel said the company hopes to expand its production, but the falling price of petroleum diesel has lowered demand, said co-owner Tim Metcalf.

Though currently operating at break-even, Metcalf said the call for more biofuels over the next two decades is promising.

"That's why we're working for free right now," he said. "As (biodiesel) grows in the future, I think things will come around."

Wind

Perhaps the most ambitious part of the plan calls 10 percent of all electricity consumed in the United States be derived from clean, sustainable energy sources, like solar, wind and geothermal, by the end of Obama's first term. The plan states the requirement will spur private investment into renewable energy and create thousands of new jobs.

One local company that stands to benefit from the new mandate would be Wind Energy Systems Technologies, co-founded by Herman Schellstede and Harold Schoeffler of Lafayette.

The company plans to use abandoned offshore oil platforms to harness the power of wind.

The company has leased five areas off the Texas coast with hopes to build $3 billion worth of wind farms on abandoned offshore oil platforms, Schellstede said.

Engineers have collected more than 18 months worth of data from a test site near Galveston, and hope to begin construction in the next year.

WEST has completed engineering work on a 150-megawatt facility in Galveston, but is waiting for funding to purchase wind turbines, which cost more than $100 million each.

The company would also like to get a bottom-line guarantee of what utility companies would pay for wind energy, to ensure the project would be economical.

"We have investors ready to go," Schellstede said. "But it would be so much of a better sell if we have some kind of floor."

Schellstede said the company continues to do research at its four other sites in Texas. It has also applied to lease sites out of Venice and Port Fourchon in Louisiana.

The ongoing financial crisis has slowed the project somewhat, Schellstede said.

But a new, renewables-friendly administration could provide more opportunities for assistance or other incentives to make wind energy more attractive, he said.

"People favor this, because they know it's a long-term need," Schellstede said. "We need power, and this is one of the safest ways to get it."

While the benefits of renewable power will be with Texas, many of the jobs connected with the project will be in Louisiana, Schellstede said.

Equipment and platforms will be built, fabricated or recycled from Louisiana ports, he said.

Energy efficiency
The plan calls for the country to reduce its projected electricity demand by 15 percent by 2020. It would place annual demand reduction targets on utilities, and apply more stringent standards on buildings and appliances.

Lafayette Utilities System currently draws 70 percent of its power from coal power, according to LUS director Terry Huval. The remainder comes from natural gas.

Huval says LUS has no current plans to invest in renewable resources because of additional costs to customers. But the company is making changes to accommodate customers who install their own alternative energy systems.

The Lafayette City-Parish Council recently passed a net metering ordinance that would allow LUS customers to connect their solar panels or other alternative energy sources to the city's power grid.

Any customer generating more "green energy" than they consumed would be eligible for a credit on their utility bill, Huval said.

LUS has also focused on promoting energy efficiency and educating customers on reducing their energy consumption, Huval.

The utility provider is looking to install a "smart grid" system next year, which would allow electric meters to be read remotely and provided to customers on a real-time basis.

"That could help customers identify opportunities to reduce their energy on their own, and at same time help us reduce overall demand," Huval said.