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Cello: A Lesson in Due Diligence

People sometimes ask me how – if they don’t have any particular technical expertise – one determines whether companies are making fraudulent claims. I tell them that the simple test of “If it looks too good to be true…” will work in the vast majority of cases. In the case of Cello Energy, that sniff test could have saved investors some money. Here’s what happened.

I haven’t written publicly about Cello Energy, but I have exchanged several e-mails with people about their claims. I have long been on the record stating that I do not think the prospects for commercialization of conventional cellulosic ethanol are very good. Any time I hear people promising to produce renewable fuel for $1/gallon (or less!), I generally think that those people making those promises are either severely deluded or committing fraud. Cello made these sorts of promises. Cello said they could make $16 a barrel renewable fuel from cellulose – which works out to be 38 cents per gallon.

About six months ago I received an e-mail from someone within the U.S. government asking for comments on the Cello technology (which they described as cellulose to diesel, not ethanol). We ended up exchanging 17 e-mails discussing the technology. I got some general information (publicly available) on what they were doing, and while the person inquiring was skeptical, he took a tour of their plant and told me “it does seem that his plant does do what he says it does, and that he [inventor Jack Boykin] did indeed invent the invention of the century (it is difficult to verify a technology with a simple plant walk through). And there is this nagging thought – could this really be true (it seems too good to be true)?

In my first response, I noted that it had elements of two technologies I was familiar with, but “seems very similar to CWT’s thermal depolymerization technology.” That technology of course resulted in bankruptcy because it simply could not do what the inventors claimed it could do. I also added “It works, it is just a lot more expensive than advertised.”

In the next exchange, I noted that I would take a very hard look at their energy balance: “Grinding to an extremely fine state can be pretty energy intensive, and then they are adding heat to the process. Have they made it clear how the energy inputs compare to the energy in the final product?

In additional follow-ups, I noted that they appeared to have a problem with their energy balance. They claimed that they could produce a certain number of gallons of fuel from a ton of biomass, but the feedstock didn’t have as many BTUs as did the final fuel. So I noted that unless there were other energy inputs “that claimed number does not seem possible.

I was asked if it was reasonable that they would have spent $12 million on a plant that didn’t actually work, and I responded: “I have seen people throw away more than $12 million on an idea that doesn’t work. It just depends on whether it appears to work, and whether the scientist/engineer who is the inventor is a good salesman.”

Now despite all of these e-mails, I couldn’t say with 100% certainty that their technology did not work. I just saw a lot of warning flags, and wanted to point out some things that he should probably look into. I didn’t hear back from him for a long time, but then I saw a story that said that Vinod Khosla had invested in the company. I wrote and asked for an update, and here was part of his reply:

I have assessed a couple different aspects of the technology such as the energy required for grinding. My analyses suggest that they cannot do what they say that they can do because the energy demand is too great. While my analysis shows that grinding down to the fine size that the process requires would require several times more energy than what the entire process consumes, the inventor reassures me that because most of the grinding occurs in the liquid phase using hot product as the liquid, the energy demand from grinding is vastly reduced. While what the inventor says is possible, I cannot verify it.

So he validated my concerns about the energy balance, but the inventor assured him that he had found a way around that sticky problem. (If it were only that easy; to do the grinding in hot liquid!) So far, this one still isn’t passing the sniff test, but once again I don’t have enough information to conclude that fraud is taking place. But I have enough information that I would be hard-pressed to give them any money.

But now a jury has ruled that they have indeed committed fraud. Two really good stories on this from earth2tech:

Lessons from the Cello Energy Biofuel Fraud Case: Do Your Homework

Cello Energy Leaves 50M-Gallon Gap in Feds’ Ethanol Targets

From the first story:

As far as speed bumps for cellulosic ethanol ventures go, this one’s a doozy: Jurors in a federal court have ordered Cello Energy, a biofuel startup run by Alabama’s former ethics chairman, Jack Boykin, and backed by both Silicon Valley cleantech investors Khosla Ventures and pulp maker Parsons & Whittemore Enterprises, to pay more than $10.4 million in a fraud case.

Cello reportedly accepted a $2.5 million investment from P&W in 2007 to help finance its first plant. Several months later it received a $12.5 million investment and a pledge for up to $25 million for construction and operation of additional plants from Khosla. Cello agreed to use discounted wood waste from the company as feedstock, but “a string of witnesses testified that samples of the fuel allegedly produced at Cello’s facility…were derived entirely from fossil and not renewable sources,” the Alabama Press-Register reports. This week a jury in Mobile, Ala., decided that Boykin’s original claims (made with his partner and son Allen Boykin) were fraudulent.

The second story sees a silver lining here. If the targets fall short of projections, there will be even more money available for cellulosic ethanol (but I still think there is confusion here over whether this is an ethanol or diesel process; I think the claimed process is actually cellulosic diesel):

As the research firm ThinkEquity notes in a new report, if cellulosic ethanol production falls short of the U.S. EPA’s estimate of more than 100 million gallons next year, new incentives are supposed to kick in to support production the fuel as part of the proposed Renewable Fuel Standard update, or RFS2, which is slated to increase the amount of renewable fuels that must be blended into gasoline.

In the event of a shortfall (not enough renewable fuels to meet minimum blend requirements), ThinkEquity wrote in its report late last month that the EPA can sell credits that would increase the value of cellulosic ethanol to a minimum price of about $3 per gallon (up from ethanol futures’ current $1.77 per gallon).

The story notes that the reason for the EPA’s 100 million gallon estimate was that they were counting on 70 million gallons from Cello! I have said it before, and I will say it again loudly: CELLULOSIC ETHANOL IS NEVER GOING TO MEET THE PROPOSED RAMPED UP PRODUCTION LEVELS. Too many uninformed boosters have done too little due diligence, and we get all sorts of ridiculous expectations. Back to the first story above, they noted how careless investors were in throwing down money on the project:

…P&W and Khosla Ventures weren’t exactly diligent. The excuse? P&W CEO George Landegger said he trusted Boykin after he promised to invest his own money in the $25 million project. For Khosla Ventures, whose founder Vinod Khosla has called cellulosic biofuel his “real love” and invested in more than a dozen biofuel companies, due diligence was not necessarily a deal breaker, and according to emails revealed in court between Khosla and partner Saul Kaul, Boykin refused to give the investors enough time for due diligence. That made the deal “nerve-wracking” for Kaul, but Khosla wrote, “Great job on this one. Herculean effort. But my bet is it will pay off.”

My bet is that it won’t. I think Khosla and the others have simply been scammed. While I appreciate Khosla’s desires to “to use his wealth to fight the war on foreign oil and for energy independence”, sometimes it feels like he is just scattering a lot of money around in the hopes that something – anything – will work. In this case, it looks like he was betting on a miracle, another in a long line of companies claiming “game-changing technology.” Maybe things will turn out OK. But this entire story has all the earmarks of so many biofuel pranksters who came, promised, fleeced investors, and failed. I can promise you one thing: Whether they make fuel or not, it won’t be for $16/bbl.

As I noted in my previous entry, one of my jobs going forward with my new company is to make sure we don’t get tangled up in situations like this. But based on the limited information I had, I would have steered us clear of Cello. On the other hand, I will continue to look for companies that can actually deliver on their biofuel promises. So feel free to send me your $25 million. It will be in good hands. 🙂

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July 7, 2009 - Posted by | Cello, cellulosic ethanol, Vinod Khosla

40 Comments

  1. We on vacation visiting our son in the area where I was developing biomass renewable energy before moving back east. I thought I would check to see if I gave up on renewable energy too soon. The first place makes biodiesel. After my drive, I checked with my friend at the PUD. He is not encouraged. Then on the fourth of July they had a fire started by fireworks that damaged the prototype.If fire safety and industrial safety is not a passion, stay out of the energy business. The second thing I look for is a web site that is easy to navigate. It should not be hard to figure out what the process or product that is being marketed. The second renewable energy place was not a hopeful example:http://www.cleanenergyprojects.com/

    Comment by Kit P | July 7, 2009

  2. As confidence tricksters say, the easiest people to fool are the ones who want to be fooled.Biomass enthusiasts should take a leaf out of the wind hucksters' book. Wind promoters do not claim that wind power is going to be cheaper than the alternatives — they demand permanent direct & indirect subsidies. Wind promoters have never laid out any long-term road map by which wind power could ever become cost competitive. Wind promoters have never even addressed the crucial technological issue of intermittency.Yet wind factories are popping up all around the world.There must be some lessons there for the biomass crowd.

    Comment by Kinuachdrach | July 7, 2009

  3. Is it too much to ask for a heat and material balance? There is nothing proprietary about an overall mass and energy balance. If investors or the government would just require one it would cut down on fraud. At least you would need an engineer to produce it, who would think twice about flushing his career down the drain. If someone asked for an overall mass and energy balance, we'd happily provide it. We already report most of the inputs and outputs.

    Comment by KingofKaty | July 7, 2009

  4. Here's an idea Robert, let nature break down the material for us:http://www.msnbc.msn.com/id/31767229/ns/technology_and_science-science/TAD

    Comment by Anonymous | July 7, 2009

  5. "Here's an idea Robert, let nature break down the material for us:"Thanks for that interesting link. There are definitely a lot of enzymes out there that can make short work of biomass. I actually worked on using termites for cellulose conversion in graduate school. Key considerations are whether the enzymes can be cheaply mass-produced, but more importantly exactly what their breakdown product is.Cheers, RR

    Comment by Robert Rapier | July 7, 2009

  6. I was a financial journalist for 20 years, and I still keep my hand in from time to time.Whatever is hot–dot.com in 1990s, real estate investment trusts in the 1980s, energy in the 2000s — will attract con men.The majority of con men are convincing on a personal level — they may actually believe what they are saying at the time they are saying it. Ask a psychologist to explain it, because I can't.The trick to being a good con man is to care about raising the money, not the success of the venture–that's the part innocent or productive people never get. Most of us cannot conceive of raising money without thinking it will be put to good use, or at least taking a serious shot at making real money. The innocent still think forward–the cons are thinking only about getting the money. In the REIT scams of the 1980s, the cons were keeping 15 percent off the top, then investing the rest in whatever crap they could find (probably for even more kickbacks). So, you raise $200 mil, you have $30 mil in your pocket. That is the business model (from the con's point of view).Once you have figured this out, other things make sense. Another sobering thought; People go into teaching as they love teaching, and need money. People become engineers as they love engineering, and need money. People become nurses as they love nursing, and need money. People go into Wall Street as they love money, and they need money.

    Comment by Benjamin | July 7, 2009

  7. Anonymous ~Nature already does a very good job of breaking down bio-mass into a liquid form of energy. The only problem: It takes 300 million years or so to do it.Any attempt on our part to speed up that process will necessarily be energy-intensive. The problem with entrepreneurs such as Cello Energy is that they have no idea how energy intensive (not to mention uneconomical) speeding up a natural process can be.

    Comment by Hawkshaw | July 7, 2009

  8. In the event of a shortfall (not enough renewable fuels to meet minimum blend requirements), ThinkEquity wrote in its report late last month that the EPA can sell credits that would increase the value of cellulosic ethanol to a minimum price of about $3 per gallon (up from ethanol futures’ current $1.77 per gallon).Is this for real???In other words, Uncle Sam's response to failure is to spend even more money on the failed venture!?!Oh wait, we already have all those bailouts. Never mind…

    Comment by Optimist | July 7, 2009

  9. Is it too much to ask for a heat and material balance?King, sadly that is no guarantee that things work as advertised. Exhibit A: TDP (again), as mentioned before their mass and energy balance was just off enough to support the ludicrious claim ("85% energy efficiency").But I guess your point may be this: with a heat and material balance in hand, any competent ChE can check whether the numbers pan out, or not.As for TDP: The real efficiency is no more than 60% (possibly quite a bit less). The important fact being this: at 60% efficiency, you need almost three times the energy inputs you need at 85%…

    Comment by Optimist | July 7, 2009

  10. It takes 300 million years or so to do it. Any attempt on our part to speed up that process will necessarily be energy-intensive. The problem with entrepreneurs such as Cello Energy is that they have no idea how energy intensive (not to mention uneconomical) speeding up a natural process can be.BS, Hawkshaw, utter BS!!!Exhibit B: Anaerobic digestion: 15 days and ~50% conversion. Several alternatives already exist to speed AD up and/or increase conversion.The earth's crust is not some optimal oil producing reactor which engineers can't improve on – quite the opposite.As RR stated, several ways of doing biomass -> liquid fuel exist. The trick is to do so profitably. Nothing to do with an inherent requirement for 300 million years.

    Comment by Optimist | July 7, 2009

  11. "In other words, Uncle Sam's response to failure is to spend even more money on the failed venture!?!"One of the stories that had me shaking my head this morning was Obama advisor Laura Tyson saying the first stimulus package was too small and that we need another one. RR

    Comment by Robert Rapier | July 7, 2009

  12. Optimist – you linked to a discussion of TDP yields not mass balances. Robert was attempting to back into a mass balance. That example illustrates why you need a real mass and energy balance. Yes, you could fake those balances too, but it would be much more difficult to pass off a fraud.

    Comment by KingofKaty | July 7, 2009

  13. One of the stories that had me shaking my head this morning was Obama advisor Laura Tyson saying the first stimulus package was too small and that we need another one. Then don't look at the graph here: Obama: Battlefield Surgeon it will make your head fall off.

    Comment by KingofKaty | July 7, 2009

  14. RR-Lots of serious economists think the risk is in not enough stimulus. If the US economy, perhaps bottoming out now, again falters, they may be right. Hard call, I'd say. BTW, embracing the need for macroeconomic stimulus is completely separate from liking subsidized ethanol, which I do not.

    Comment by Benny "Boom, No Doom" Cole | July 7, 2009

  15. Optimist ~Of course the trick is to do it profitably.And one little point — the matter of scale. It took the Earth about 300 million years to convert enough bio-mass to oil for us to consume in a little over 100 years. Any idea how many billions and billions of tons of bio-mass that would have been?Sure, we can figure out a process to do it more quickly, but where will the required volume come from?Certainly, the earth's crust is not optimal for converting bio-mass feedstock to liquid fuel, but coupled with millions of years and an almost unlimited volume of feedstock, it will be mighty difficult to replicate — at a profitable cost.

    Comment by Hawkshaw | July 7, 2009

  16. Optimist – you linked to a discussion of TDP yields not mass balances.Nope. If you follow the link all the way through, repeated here for your convenience, you'll find the mass balance (slide 11) and the energy balance (slide 12).The discussion shows the errors in said mass and energy balances.

    Comment by Optimist | July 7, 2009

  17. One of the stories that had me shaking my head this morning was Obama advisor Laura Tyson saying the first stimulus package was too small and that we need another one.That is indeed a sad day for America.Of course, here the Obama folk are only following a path that has been prepared, conveniently enough, by Paul "The-stimulus-can-never-be-big-enough" Krugman of NYT fame. Regardless of the high regard that some here hold for NYT, Krugman is a Nobel prize economist. I guess the Nobel prize just lost some of its (remaining) shine.And as King is suggesting, they are always pointing to how much worse things would have been ("we know this for a fact"), if the president did not sign the Stimulus.Of course, Bush 43 (RINO, if ever there was one), started this mess with Hank's Bail Out Buffet (Invitation Only) Part I and II.

    Comment by Optimist | July 8, 2009

  18. Hawkshaw, you seem to have a near religous faith in Mother Nature's unique ability to provide us with liquid fuel at an affordable cost. But there is nothing magical about it. I suspect Choren and Range Fuels are pretty close to cracking the code, and doing so profitably, once oil gets back above $150/bbl.If not, well keep watching Hawaii and one Robert Rapier…

    Comment by Optimist | July 8, 2009

  19. Optimist and Hawkshaw,Diamonds are created fairly rapidly in High Temperature/High Pressure environments.HTHP diamonds and other gem-stones can be created in 4 or 5 days — above ground. It does not take millions of years.What takes millions of years is for volcanoes to transport the diamonds to the surface or near surface and for normal geological processes to disperse and reveal them.Most diamonds are found around or near former volcanic activity.The key for the bio-fuels may not lie within the strict confines of bio-chemistry (i.e. anaeorobic digestion, enzymes, etc.), but through molecular and atomic changes to biomass from temp./pressure. changes, as was undoubtedly the case in the formation of crude oil.While diamonds may have been formed millions of years ago, they did not take millions of years to form. John

    Comment by Anonymous | July 8, 2009

  20. "Hawkshaw, you seem to have a near religous faith in Mother Nature's unique ability to provide us with liquid fuel at an affordable cost. But there is nothing magical about it."I didn't say it's unique, I said it's a matter of scale. Some super-rich dude could easily hire a chemistry PhD to make fuel for his Bentley or Rolls from the algae growing on his private pond, the question is how you scale it up to do it for the hundreds of millions of cars in this country. How many acres of algae would it take to supply motor fuel for one rich guy's car? Now how many acres of algae ponds would it take to supply fuel for the 258,000,000 cars in the U.S.? How do you handle the logistics of moving that many tons of algae from tens of thousands of algae ponds to the processing plants?The critical issues are logistics and scale, not the process.

    Comment by Hawkshaw | July 8, 2009

  21. "The critical issues are logistics and scale, not the process."You get an A+, Hankshaw. The basic issue is the scale of human energy demand — and the need for that demand to be even greater in future due to bringing the under-served up to a decent standard of living and adjusting to sources with lower energy amplification.Check out HANPP — Human Appropriated Net Primary Productivity. Some people are worried that we may already be using 30%+ of the entire planetary net energy from photosynthesis — and that is before we start using biofuels in a big way! And from a quick reading, they have a better case for concern than the alleged Anthropogenic Global Warming crowd.Biofuels have a place, but they are doomed to be a niche player in global energy supplies — just like hydropower, geothermal, wind, tidal, photovoltaics. We need really big reliable 24/7 power sources. We need nuclear. But you have all heard that before.

    Comment by Kinuachdrach | July 8, 2009

  22. Check out HANPP — Human Appropriated Net Primary Productivity. Some people are worried that we may already be using 30%+ of the entire planetary net energy from photosynthesis… So when we need to massively increase it we might be glad we pumped all that CO2 into the atmosphere?:-)

    Comment by PeteS | July 8, 2009

  23. Biofuels have a place, but they are doomed to be a niche player in global energy supplies — just like hydropower, geothermal, wind, tidal, photovoltaics. We need really big reliable 24/7 power sources. We need nuclear.————————————Okay. We will "Go Nuclear" We will destroy all the windmills. They will be torn down. All solar power facilities will also be torn down (not too hard since there are few of them, plus they are just a joke anyway.)After all, 50% of nothing is still nothing, and "I don;t care what they do in Germany." and "Iceland is a unique example"Geothermal is another "laugher" because "it creates earthquakes." And hydro-power is just …. well …. plain stupid.Bio-mass — another joke…..I agree. Let's go nuclear.I can't wait for the day when the U.S. becomes the first "Nuclear Nation"All our problems will be solved. What genius !! "The electric meter will run backwards."———————————Unfortunately, the problem remains………….. How are we going to power the transportation sector with nuclear electrical plants ?My God man… You are certainly NOT suggesting we power "electric vehicles" with electricity from the nuke plants…????——————————-The problem is not in the generation of electricity, but in how to fuel the transportation sector and the internal combustion engine.==================================If you don't believe in Global Warming, then why not just continue with coal and natural gas fired plants ??? " I have seen the future… and it is nuclear… uuhhh, err, duuhhh,…"John

    Comment by Anonymous | July 8, 2009

  24. Anaerobic digesters are nature’s way of recycling nutrients and storing them until they are needed in the spring to grow food to sustain life. Energy is just a byproduct. Even if you flare the biomass, anaerobic digesters are a huge environmental improvement. Making all the electricity for society with nukes is easy. Keeping our water clean and growing sustainable food and transportation fuel is harder.

    Comment by Kit P | July 8, 2009

  25. "So when we need to massively increase it we might be glad we pumped all that CO2 into the atmosphere?"Pete S.We just might do that. The earth's natural reaction to an increase in carbon dioxide in the atmosphere is for plant growth to accelerate because of what — to them — is now a rich, fertile environment.One of the keys to understanding global warming (whether you consider it a natural event or man made)is understanding photosynthesis. Here is a readable, but well beyond basic, book by science writer Oliver Morton that is worth reading: Eating the Sun

    Comment by Ethan Edwards | July 8, 2009

  26. Dear RR,This can be interesting for You:http://www.greencarcongress.com/2009/07/nazimek-20090707.htmlhttp://permaculture.org.au/2009/04/26/beyond-peak-oil-and-climate-change/Kind regards from Poland,Daria

    Comment by Anonymous | July 8, 2009

  27. "I can't wait for the day when the U.S. becomes the first "Nuclear Nation""Anon~Doesn't that title already belong to France?

    Comment by Andrew Bazalgette | July 8, 2009

  28. One for the "we told you so" category: EU imposes import duties on US Biodiesel As tax subsidies and renewable fuel standards distort the US markets, it appears that our friends across the pond won't sit idly by and let US taxpayers subsidize cheap biodiesel imports.

    Comment by KingofKaty | July 8, 2009

  29. Anonymous Andrew Bazalgette said…"I can't wait for the day when the U.S. becomes the first "Nuclear Nation""Anon~Doesn't that title already belong to France?———————————— The honor certainly belongs to France. (By the way, my comment was made "tongue in cheek")It will do the U.S. little good to go "all nuclear" because the generation of electricity is not our real problem.Fueling the transportation infrastructure is a far more pressing concern and is the true dilemma facing the U.S. and other nations.Electricity in itself will not fill one single gas tank, unless of course, it is the "gas tank" of an electric vehicle.We are not in the midst of "peak electricity".But, we may be on the threshold of "peak oil" (high prices and scarcity) The problem is how to fuel the world's transportation infrastructure into the future and not which is the best way to make electricity.John

    Comment by Anonymous | July 8, 2009

  30. "The problem is how to fuel the world's transportation infrastructure into the future and not which is the best way to make electricity."Close, but no cigar.The form of energy is fungible. If it is cheap enough, one form of energy can be converted into another. (The problem with politically-correct "renewables" is that they are neither cheap nor renewable).With lots of cheap heat from nuclear reactors, we can convert the coal currently being burned for heat in electric plants into liquid transportation fuels. We can also use nuclear heat to "mine" transportation fuels from oil shale and from tar sands.We can even use nuclear heat to extract fresh water from salt water — as the Soviets used to do on the Caspian — and to pump it many miles inland to recharge aquifers.The key factor is that the power has to be cheap. That means lots of large scale standardized nuclear plants, with appropriate (not excessive) safety standards.And of course, we have to continue real (not politically controlled) research into the post-fossil post-nuclear power alternatives. After all, we only have a millenium or two's worth of global nuclear power.

    Comment by Kinuachdrach | July 8, 2009

  31. Of the 80 Million Acres of Corn, about 60%, or 48 Million (let's call it 50 Million in the interest of "easy" math) went to ethanol.That's about 3% of land area. We powered 8% of our auto fleet. We'll do 15%. That's 4.5% of land area. Less than 1 acre in 20. Then we get our fuel efficiency into the 30's; that'll put us into the low twenty %'s. We'll round it out to 25% + using the corn cobs. So, before we convert the first Municipal Solid Waste, Forestry Waste, Switch Grass, etc. we have 25% from Corn. Add in 25% from batteries, 25% from various cellulosic sources, and, we're good for, probably, 30 years to figure the rest of it out.Simple, eh?

    Comment by rufus | July 9, 2009

  32. Oops, 50 acres, not 80 acres. That brings it down to about 2% being used at present. So fifteen percent ethanol would be more like 3% land.So, to get to 15% we'll use 3% of land.

    Comment by rufus | July 9, 2009

  33. "The problem is how to fuel the world's transportation infrastructure into the future and not which is the best way to make electricity."I think electricity will fuel world transportation in the future anonymous. Witricity already offers the possibility of unlimited range for a plug-in hybrid. With the current 7 ft. range,drivers could re-charge their batteries without cords in parking spots virtually anywhere. The Chevy Volt is said to have a 600 mi. range. But,I've never met anyone who could drive that far without pulling into a rest area or a mcdonalds. A simple computer chip could handle the billing. If Witricity can be improved to a 25 to 30 ft. range,we can do away with expensive batteries altogether,and just run our vehicles off the grid. I think deep geothermal will power the world eventually. Baseload power,non-polluting,and inexhaustable. Kinuachdrac is right about nuclear being able to handle the job for a couple thousand years. Unfortunately,nuclear power isn't politically fashionable.

    Comment by Maury | July 9, 2009

  34. CO2 to methanol. promising ?http://www.greencarcongress.com/2009/07/nazimek-20090707.html#more

    Comment by takchess | July 9, 2009

  35. Maury & TakchessThere is a short 3 min. film on the new Potter Geothermal Drill at:http://www.mefeedia.com/entry/flame-drill/19353755Potter claims his flame drill can drill as much as 100 feet an hour.He has two prototypes. One is a high temperature pure flame drill which causes the rock ahead of the drill bit to spall off. Potter's second prototype uses super-heated water from 4000 deg. F flame to spall the rock in wet, high pressure environments.Potter film is an excerpt from the recent Nat. Geographic film titled Mam Made: Underground PowerSee to believe. Film demonstrates the process in action on big blocks of granite..John

    Comment by Anonymous | July 9, 2009

  36. "Potter's second prototype uses super-heated water from 4000 deg. F flame to spall the rock in wet, high pressure environments."Thereby preventing earthquakes I hope.

    Comment by Ben Dewberry | July 9, 2009

  37. "I think deep geothermal will power the world eventually."Hopefully. But there have also been schemes to take advantage of the temperature difference between the surface of the ocean and the water far below the surface. The concept is simple, and there is an enormous amount of energy waiting to be tapped, but the logistics, engineering, and physical problems (For example the problem of making connectors that can stand the constant up and down movement of waves) of how to make it work have so far been insurmountable on a large scale. Ocean Thermal Energy ConversionBut OTEC potentially offers one of the best methods for capturing solar energy.

    Comment by Wendell Mercantile | July 9, 2009

  38. "I think deep geothermal will power the world eventually.""But OTEC potentially offers one of the best methods for capturing solar energy."Gentlemen — let's remember the point that RR makes in his next post: everyone gets to obey the Laws of Thermodynamics, whether he wants to or not.Both deep geothermal and ocean thermal energy conversion are duds, because of those same Laws of Thermodynamics.I have been told that, out of the 6,500,000,000 of us human beings on the surface of the planet, perhaps only 200 understand thermodynamics well enough to understand the state of the art. But the rest of us can at least contemplate the mysteries (why does entropy always increase?), and learn enough to avoid dead ends.After all, it was back in the aftermath of the Napoleonic Wars when Mr. Carnot (a Frenchman, no less) working with a completely erroneous concept of the nature of heat came up with the limiting equation of thermodynamic efficiency. When heat is turned into work, there is always a loss. That loss becomes larger (i.e., efficiency of energy conversion declines) as the temperature difference between inlet & outlet narrows.That is why deep geothermal is a loser. The hot liquid deep underground inevitably cools as it is brought up the giant heat exchanger of the well. By the time the liquid gets to the surface, it is sufficently close to ambient that maybe only 3% of the energy in the hot liquid can be converted into useful work.Water from deep in the earth is inevitably highly saline. Disposing of very large volumes of salty water (large volumes because of low thermodynamic efficiency) is costly, and highly polluting unless done right.But useless as deep geothermal is, it is a pussy cat compared to OTEC — which is not only very low efficiency (for similar reasons), it is positively harmful.If done on a large enough scale to be relevant, OTEC involves disturbing the natural thermal gradients of the oceans on a giant scale. That truly could disrupt the climate of the planet — think El Nino out of control. At best, it would merely disrupt aquatic life and wipe out innumerable species.OTEC is evil. Let us talk no more of it.

    Comment by Kinuachdrach | July 10, 2009

  39. Kinuachdrach @ July 09, 8:44 PMHave any direct research, computation, or sources you can cite to support your dismissal of geothermal or OTEC heat sources? I understand that both have the Carnot efficiency issue to deal with, but I’m also reminded of Uncle Joe’s observation that, “Quantity has a quality all its own." The objective is performing work at acceptable cost isn’t it? Doesn’t a reasonable quantification of costs and benefits, not a sweeping claim there are costs for a particular approach, better serve that objective?WhiteBeard

    Comment by Anonymous | July 10, 2009

  40. "Have any direct research, computation, or sources you can cite to support your dismissal of geothermal or OTEC heat sources?"Of course! Look around and you will find it.But let's not dwell on technical reality. Let's instead apply the Precautionary Principle.Can you, White Beard, prove beyond a shadow of doubt that cooling very large quantities of surface waters/heating equally large volumes of deep ocean waters will NOT cause an environmental disaster?Of course you can't!So, by simple application of the Precautionary Principle, OTEC must be banished for ever.Being an environmentalist is fun!

    Comment by Kinuachdrach | July 11, 2009


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