Nice to see Seattle and Portland starting to attract and create some quality cleantech, clean energy events. It starts next week with Oregon's Green Advantage: Opportunities for Entrepreneurs, which will showcase local companies such as PV Powered, Plas2Fuel, Greenlite Motors, Powermand, Shorepower and UV Cleaning (as well as some leading NW multinationals and investors). In addition, there is ACORE's Renewable Energy Finance Forum (REFF) - West, scheduled for Seattle in October, which promises to be a highlight of the year and already has a solid lineup of speakers. Also, because of the work being done in the region around algal biodiesel by such firms at Bionavitas and Bioalgene, the 2008 Algal Biomass Summit will also be taking place in Seattle in October. Stay tuned as well for the kick-off of the Pacific Northwest chapter of the Renewable Energy Business Network (REBN) in September (you can click on Chapters to find the PNW link and sign up for updates).

Here's an op-ed that I penned with Dan Rosen that appeared in the Tacoma News Tribune. If you haven't joined Business Leaders for Climate Solutions, you should. 

For a long time, "green" in Washington state has stood for Granny Smith and pine trees. With the Legislature's passage last session of the Climate Action and Green Jobs bill, the state took a big step in creating a future based on the new green – a vibrant economy based on clean technology (cleantech), the green consumer and green exports.

Gov. Chris Gregoire deserves congratulations for requesting and championing the bill. But we all still have more work to do. The window for establishing leadership in the cleantech economy is fast closing. The opportunity to have a strong voice in shaping federal climate policy is closing fast, too. According to the Cleantech Network, while the total amount of venture capital invested in clean technology grew explosively in the last year, the Northwest accounted for just four percent of the total. The Northwest's share was $261 million out of a national total of $6.4 billion, barely placing it in the top 10 regions. And that's not just Washington state, but Oregon and British Columbia as well.

 

Discount the investment in the local biodiesel company Imperium Renewables in 2007, and Washington easily trails the Vancouver, B.C., cleantech cluster and is arguably far behind Oregon, where business leadership has articulated a much clearer vision for establishing an industrial base around the theme of sustainability. California and the Northeast have taken significant leads, and places like Austin, Texas, and Chicago are mobilizing civic leadership around this sector.

As members of Business Leaders for Climate Solutions, we are proud to have supported the Climate Actions and Green Jobs bill. We were joined by 32 other state business leaders, representing cleantech entrepreneurs, investors, energy consultants, service providers or simply business people passionate about sustainability.

But if the Evergreen State is going to emerge from the ongoing cleantech boom with a significant piece of the green that is being created, the broader business community must rapidly and definitively elevate its game.This is not a niche issue; the challenge of using energy more efficiently and developing sustainable products and services affects every sector of the economy and will provide both opportunities for leadership and tremendous risks for the laggards. A recent survey found 61 percent of business executives around the world expect climate change solutions to boost company profits. That's why the major corporations that provide Washington's economic backbone and their executive leadership need to bring their vitally important participation to the table: It's of great economic interest to all of us.

Washington state arguably has several characteristics that will help us as we strive for a piece of the green economy. Our assets include: unrivaled branding as a center of "green" ideas; a consumer base that is highly sophisticated and demands truly sustainable products and services; and strong trade and economic ties with China and the Far East, which is fast emerging as a leading consumer of cleantech products and services. We applaud Sen. Maria Cantwell's efforts to make Seattle the center for the dialogue with

China about these issues.We also have a vibrant green building-and-design industry, which is one of the key pillars of the green economy. And we have the potential to become a power in providing integrated design solutions that will be needed to reduce energy usage worldwide, including "green software" and smart-grid applications.

Along with these strengths, we need to find sustainable and verifiable ways to leverage our vast forestry and agricultural resources as sources of renewable fuels and carbon sinks as regional and international markets take root.

But key pieces are missing. Specifically, for Washington to compete and lead in the cleantech economy, the business community must demand and achieve three things:

  • Legislation next year that commits Olympia to put a price on carbon through a regional cap-and-trade system, along with complementary policies that promote clean energy, sustainable development, transportation and land use, energy efficiency and training for the green-collar workforce;

  • Pressure on the federal government for strong climate policy that achieves reductions in global warming pollution that is science-based and beneficial to the economy;

 • And we need a business community that is focused on and organized around the vision of making the region an international leader in the coming cleantech transformation.

 We have a chance to truly be Evergreen. Now let's seize it.

Hundreds of leaders from business, policy and NGOs in the same room for two days, naturally some interesting things will emerge. Below is a quick sketch of trends and comments from the just wrapped Fortune Brainstorm Green that I thought of particular note:

• The media "needs to get off cars and on to buildings" - Autodesk executive chairman Carol Bartz on the fact that the issue of buildings sucking energy, material and water is still not getting the attention it deserves. The numbers back her up. Conversely, it was noted by others in the green building space like Hycrete and Serious Materials that after a two decade hiatus, venture funding has found its way back to building in the past 2 years.
• A new version of LEED is set for unveil at Greenbuild in Boston and will be a "quantum leap" - head of USGBC Rick Fedrizzi
• Seems to be growing unease, and even skepticism, that cap and trade is going to be as easy at many thought. 2011 was heard repeatedly as a possible timeframe for legislation. Will a nascent business consensus fray into a mess? Are the economics fully understood to push forward aggressively? Is the Hill ready? Anecdotally at least, the answer is still clearly in the balance. One interesting alternative presented was Cap and Dividend.
• Like building, energy efficiency is still struggling to get more than a lot of lip service. Is recession the catalyst for cracking that nut? It was mentioned as a possibility.
• Hybrids and small cars are the fastest growing segment of US automotive market, according to Beth Lowery of GM. "The price of fuel is driving behavior," she said.
• "Living building" that taps into biomimicry is going mainstream. HOK - the giant architecture and design firm is starting to position itself as "bio-inspired", according to Janine Benyus, the founder of the Biomimicry Guild. Benyus' group is also looking to launch Asknature.org - a cool idea that allows anyone to query a database with questions about how nature addresses specific issues.
• Coke's environmental guru Jeff Seabright said look for something soon about consumer-facing information about "water used" in the company's products. It may not be on-package information, but something is coming. This would be welcome, since embedded water in consumer products is still very opaque to the consumer (for example, according to Dow Chemicals' Scott Noesen, it takes 2,000 liters of water to make a McDonald's hamburger if you do the whole-cost analysis.) There is nutritional information, now carbon labeling information has appeared, and water is the logical next step. Let's hope it happens.
• Vinod Khosla was the most provocative in my opinion during a 1:1 with Fortune's Adam Lashinsky. Highlights include:
  • Next generation batteries are not on a rapidly declining cost curve and require a quantum jump with a high probability of failure
  • The "Prius is more greenwash than green"
  • Technology for clean energy will only succeed if it passes the Chindia price test. If it's affordable in China and India then it has a shot.
  • Carbon emissions from all-electric cars are 3x more than that of cars powered by cellulosic ethanol.
• The highest correlation in the movement of solar stocks is the price of oil (not the price of natural gas as would be expected) - David Edwards, analyst at Morgan Stanley
• Both Monsanto CEO Hugh Grant and Khosla cited the same statistics placing biofuel as the fourth leading cause for the spike in global grain prices. The top three - rise in oil prices, drought in Australia and change in eating habits in developing countries like China (to more meat). I found one paper on Khosla's site about Fuel vs. Food, but it didn't appear to include the above list. Anyone know where it comes from?
• When Fortune's Marc Gunther asked a panel of Xerox, GM, SC Johnson and Dupont executives what grade corporate America should get in addressing environmental challenges (10 being the best grade), all of them said "1″, with the exception of GM's Lowery, who gave a "2″ because of innovation happening around new technologies. If you want to actually score a company, you can thanks to the CEO of Stonyfield Farm Gary Hirshberg, who has created an online corporate scorecard at Climatecounts.org

The Clean Technology and Sustainable Industries Organization (CTSI) organized a "DC Policy Tour for Clean Technology" this month, taking 50 cleantech industry players (representing cleaner coal, solar, wind, nuclear, hydrogen, demand response, water, biomass and fuel cells, plus investors) on a Congressional walk-about. I spoke with Patti Glaza, executive director and CEO, to get her take on the day and the outcomes. After a total of 45 meetings with elected officials from more than 20 states, Ms. Glaza reported that renewable energy tax credit extensions will happen, but only for one year (longer term extensions will most likely come in the next administration) and that climate change legislation will be considered in June, although again it would be surprising to see anything being signed into law prior to the next administration. She also said that both the House and Senate have requested a significant increase in the Dept. of Energy (DOE) budget from what was in the department's original request, and that more funding should be available than last year. Ms. Glaza added, however, that it was unlikely that the Advance Research Projects Energy (ARPA-E) program that was approved in the America Competes Act last year will get off the ground.  More details from the day can be gleaned from the Q&A below, including tips from Ms. Glaza for how companies, even start-ups, can work with their elected officials to make a bigger difference at the Federal level. 

Q: Any humorous moments from the tour?

A: We learned to never let a tour member tell a Republican official that we should pay for the renewable energy tax extensions with funding for the Iraq war.

Q: Who did you visit and get traction with?

A: The primary focus of the meetings was with members of the Appropriations and Ways & Means Committees as Congress is currently finalizing agency budgets and funding programs slated for this fiscal year. We also targeted the Science & Technology, Small Business, Energy Independence & Global Warming, and Energy & Commerce committees and subcommittees, in addition to several executive-level meetings at the DOE. The highlight was Sen. Byron Dorgan (ND) who leads the Democratic Policy Committee and sits on key committees including Appropriations; Commerce, Science & Transportation, and Committee on Energy & Natural Resources. Sen. Dorgan and his staff took a significant amount of time with our group and showed real interest and knowledge of the challenges the sector faces.    There are a lot of champions on the Hill and we need help in reaching out to all of them. Congressmen that took the time to meet with the tour directly included: Tom Udall, Vito Fossella, Dale Kildee, Phil English, Jay Inslee, and Dorgan. Additional offices showing high-level support included: Cantwell, Clinton, McNerney, Barrow, Capuano, and Candace Miller. 

Q: It seems there is a scarcity of coordinated government relations work being done on the part of the cleantech industry. Is that an accurate read on the situation?

A: My initial assessment is that as an industry or sector, clean technology has not had strong representation in Washington DC. Inslee made the comment that he has been waiting for a group like CTSI and is glad we have started our efforts. That being said, there is strong government relations work being done for specific clean technology segments, solar, wind, and biofuels being examples. The role CTSI is trying to fill is to advocate for policies and programs that address the complexity and interrelated issues of energy, water, and the environment. Renewable energy needs smart grid needs cleaner base load generation needs distributed generation support needs water management/reduction, etc.

It was obvious from our meetings that the Hill is extremely receptive to a sector they see as providing new jobs, energy security/independence, and increasing the US global competitiveness. Regardless of the group organizing, a broad technology platform is essential. Industry has to be seen as working together on solving the bigger issues (growing energy demand, climate change, etc.) and not just advocating for specific industry segments in isolation.    

Q: How can companies make a difference on the national level?

A: I see three immediate ways that organizations can make a difference:

- Companies need to take the time to educate their local representatives on their companies, technologies, and how they are working to solve the larger issues.

- Executives need to participate in Washington DC based meetings to emphasize the important role policy and regulation play in developing the clean technology sector. Nothing grabs attention like a company telling their representative that they expect to start laying off workers in June/July because the renewable tax credits haven't been extended.

- Overall, companies need to recognize that policy isn't just for the big players. Policy and regulations have and will have a significant impact on the rate of development and adoption of clean technologies, and growing technology companies need to be at the table when those policies and regulations are being created. Yes, resources are limited. Yes, policy is complicated and difficult to understand. Thus the role of policy and trade organizations.

In the same way the Northwest has imagined and innovated its way to success with endeavors now synonymous with the region – be it coffee, software, outdoor gear, aerospace or microchips – our region can help write the operating instructions for what might be the most important opportunity for the next two generations – cleantech.   The time is now, not to walk but to fly. The land grab has started as different regions – inside the US and out – move to stake their claim as the leaders of the cleantech revolution. The companies and people of the Northwest are uniquely positioned to be among the leaders. The intellectual capital is here. The political will is here. The consumer culture and public sentiment needed to support a cleantech economy are also here.  Tech heavyweights like the San Francisco Bay Area are already way ahead, investing heavily in starting clean technology companies and churning out patents from their universities.   Yet here in the Northwest, local venture-capital money is still trickling into cleantech - Chrysalix and Yaletown in BC are the notable exceptions. Entrepreneurial enthusiasm has been relatively muted. Where is the Bill Gates, the Jeff Bezos, the Paul Allen, the Howard Schultz of cleantech? Cleantech is ripe for great, local visionaries. It is also ripe for another key component of success: a clearly identifiable brand. What does the Northwest stand for? Where does it have a competitive advantage in cleantech that is sustainable over the long haul? What can we get excited about as a community and rally around? The jury is still out, but here is an attempt to crystallize the focus of our region and my candidates for where the Northwest has a real chance to stake a claim, not as “the” world leader, but as “a” legitimate leader with the proof to back it up: The Frontrunners

• Biofuels – Imperium Renewables gets the attention, but there is much more happening. Boeing working on aviation biofuel. Weyerhaeuser exploring cellulosic ethanol. A host of start-ups looking at algae, mold and enzymes. The Northwest Biofuels Association, Pacific Regional Biomass Energy Partnership. A solid base of expertise has formed in the Northwest, including at universities and national labs. And we also excel in the ability to design and build large bio-refineries.  
• The Other Hydro – Wave and tidal could be the “next wind” and we are blessed with the right coastline and ripping tides. Just ask Oregon Iron Works, as they churn out prototypes of several different wave energy prototypes. When I recently saw the eight-story AquaBuOY (almost all of which is underwater) designed by my client Finavera Renewables, it finally struck me that this is no joke.
• Software – Whether PC power management, carbon emissions tracking, vehicle to grid, or remote electricity consumption monitoring, its already happening in the Northwest and the potential for growth here is great given that software is in our DNA. Microsoft even appears to be prepping for a big push in greening its products.
• Cleantech as a Service – The service sector has always been a strength in the Northwest, whether its building, engineering or environmental consulting. Is there an Accenture of cleantech out there waiting to happen? Not yet, but its possible.   

The Maybes

• Consumer Cleantech – We have some of the best consumer brands in the world, and there is no reason to believe that we cannot create more in cleantech, whether it’s a consumer-facing biofuels brand (SeQuential or Propel), a family-friendly home energy saving software or a venture capital firm like Maveron that takes its consumer knowledge and puts it to work in the cleantech space. But top talent is being drawn to the Bay, so we need to incubate locally and aggressively.  
• Smart Grid – The Northwest appeared to have an edge here several years ago, with relatively progressive utilities and Itron dominating the metering market, but does it anymore? Not so sure. Other regions have caught up and probably passed us.  
• Renewable Energy Gateway to China – Senator Maria Cantwell certainly would like to see that happen, and efforts are underway to organize a bilateral forum in Seattle of top business leaders to advise the US-China inter-government Strategic Economic Dialogue. The Northwest also exports a lot of engineering knowledge, environmental consulting, green building and design to
  China.
• Power Storage – Between fuel cells in British Columbia and a national lab in Idaho that knows power storage, there is some critical mass here, but can we recover from the disappointment of Ballard?