HJ Interview questions 11721:
Questions are in this font, answers are in bold or are taken directly from the book pages shown in bold italic.
What was the background to writing this book Energy, Convenient Solutions?
I was working on a book titled, SOLUTIONS about practical answers to many problems plaguing Americans primarily. One of the subjects was energy and oil, a field where I have both training and experience. Then I heard a guy touting the hydrogen fuel as an answer to everything. He was being interviewed by Diane Rheem on public radio and spoke in glowing terms about “the future of energy.” At first I was very excited and did some literature research on the subject so I could include it in my book.
One thing led to another, and the section on energy became so big I decided to write an entire book to the subject. That was eleven years ago. Once I dug into hydrogen as a fuel, the realities soon overwhelmed the enthusiasm. It soon became apparent that the infrastructure required for the production, storage, and distribution of hydrogen as fuel would be extremely expensive and dangerous. In the foreseeable future, these expenses would certainly make the cost of driving a hydrogen powered vehicle prohibitively high.
What is the current state of global energy and what are some of the forces that shape its reality and perception?
That is a huge question involving many variables. Currently global energy centers around fossil fuels, petroleum for transportation and home heating, coal for electricity, natural gas for heating, cooking, and also for electricity. A significant amount of agricultural production has been diverted to ethanol and biodiesel. This is driving up the prices of food by using a major portion of the grain crop for the production of fuel. Also, ethanol subsidies skew the grain markets even further and cost taxpayers millions.
Currently almost all vehicles are powered by petroleum products. The new hydrids, all alternative powered vehicles combined, are a tiny portion of the entire mix. One growing sector is the use of LNG, liquified natural gas, in heavy trucks.
Higher fuel economy and more efficient engines join all fuel conservation methods as a stop gap measure that will soon be overrun. What is gained if you cut fuel consumption 10% (now hard to do) by any means and the price of fuel doubles as it has in just a very few years? Long range we need maybe several alternative systems, particularly for the transportation sector of our economy.
What are we facing in the field of energy as the world passes Peak Oil?
The term Peak Oil is a nebulous name for what is loosely deemed to be the point at which new oil fields and recovery technologies can no longer keep up with demand. I am often told, “We are sitting on a veritable sea of oil. There is no shortage. We have oil enough in the ground to fill our needs for many years.” That is actually true, but it denies one major reality. The oil may be there, but what if it costs $100 a barrel to get it out? Or maybe $200 a barrel or even $400? Say you own a well that costs you $75 per barrel for oil at the wellhead. If the wellhead market price is $100 per barrel, your well is profitable and you will keep it running. Should your operating costs ever exceed the wellhead market price, you would certainly shut down your well or lose money. Say you have a well that costs you $5 per barrel for oil. In that case your well would be very profitable and you would certainly keep it pumping. Expand those scenarios to the world stage and an obvious result becomes evident. Peak oil then is that point in time where the increases in the cost of oil at wellhead begins to exceed the market price at any given demand level. As unprofitable wells are shut down, and new wells are too costly to drill considering their potential profitability, the supply drops. Unless the supply drops as well, the market price is forced upwards. This is precisely what is happening in the world today. Of course, the artificial manipulations of the supply by groups like OPEC, the political manipulations of a number of governments, and even the changing costs of labor at the wells areother factors that can be significant.
Why is oil still seen as the global energy answer despite the precipitous decline in some of the world's most legendary oil fields?
A simple one word answer, COST! As long as petroleum products are among the cheapest fuels available, they will be used. As soon as an alternative system costs less, transportation will move to that fuel or system. It will happen slowly as the price of petroleum rises and the price of alternatives drops or even stays relatively constant. The capital costs of new equipment will also be at least part of the answer. If a new truck saves $10,000 in fuel cost over its life, but costs $20,000 more initially, truck users won’t change. Only when additional fuel and or maintenance costs are less than the increase in a vehicle’s initial price will businesses switch.
What is your book not about?
It is not about distant future solutions. It is not just about the growing demand for energy, alternative fuels, new types of vehicles, reducing global warming, creating an economic bonanza, it is about the interactions of all of these things and more. It is definitely not about any one-size-fits-all solution in ten years. These types of answers, so adored by the media and politicians, rarely solve anything and often do more ill than good. I was severely criticized by one reviewer for not providing a specific answer in ten years. He missed the entire point of the book. There is no single answer, no more than there is a single answer to food, or clothing, or books, or . . . . The answer is a complex mix of many types, models, locations, and creation processes. What we need to do is increase the options and find the most effective and practical mix of old and new technologies. That is precisely what we do with food, clothing. Books, etc. Wind power may be the most cost effective in some places and geothermal in others. You wouldn’t expect ocean wave action power to be cost effective in Missouri for example.
Your book covers some potential energy solutions large and small through the efforts of entrepreneurs. How important are entrepreneurs to the process of solving the energy problem?
Entrepreneurs are most effective on very small to medium scale projects, just the type of experimental projects that could lead to a breakthrough to a large scale operation. Right now wave action energy is in this origination stage. Another example: right now there are many small entrpreneurial enterprises involved in electric cars of many types. Should one or more of them hit on a really effective and practical answer, that company will grow and probably attract investors. Along that line are the LNG trucks now serving the Port of Long Beach California. This innovation came in response to the requirement to severely limit pollution from truck exhausts. It has led to companies that modify existing truck engines, manufacture new engines, build trucks, and other companies that supply LNG and service the new engines. Some of these companies are new and some are older companies that adapted to a new situation. How many current major companies were started in a garage be one or more entrepreneurs? It can and does still happen.
What are some of the challenges that entrepreneurs face as they develop alternative energy sources?
Without question the biggest challenge is securing capital. Sadly, our current political scene has had a major negative effect on capital markets. Right now there is very little capital available to entrepreneurs. Government regulations and controls are another. Politicians seem to have little understanding of the differences between tiny startup companies and multinationals. They are both pretty much under the same set of rules and reporting requirements. Why not suspend much of this unnecessary red tape for smaller organizations or startups for a number of years. This will provide the stability and common sense rules small operations can thrive under. Example: a two man manufacturing company operating in New York State in a small building on property adjacent to one of their homes was hit with a huge number of orders to make changes in their building in order to meet both state and federal requirements. The cost of those changes was in excess of $150,000, far more than the entire assets of the small company. In short, the government put them out of business for absolutely no valid reason. Again, unrealistic, government one-size-fits-all requirements destroyed a budding manufacturing business. It seems virtually all government regulations favor huge businesses at the expense of the entrepreneur or small business owner.
Beyond fossil fuels, what is the potential for renewable energy sources?
There are many, see section B, pages 46-51 of the book
Are manufactured fuels like hydrogen promising, a dead end, or perhaps both?
Page 97 of the book.
What does the future hold for nuclear energy?
Page 61, 78, 84, 235 of the book
Solar energy offers some solutions. What do you see for the Sun in our future energy needs?
Wind is another area that received much attention. What potential does wind hold for energy as it already has a millennia long history of usage?
There are many downsides to wind energy. Among those are high maintenance costs, destruction of migrating birds, variability of wind energy, changes in wind speed and direction, and the appearance of huge windmills. Remember Ted Kennedy’s objection to the unsightliness of windmills in the ocean near his favorite sailing spot?
One area that offers enormous potential is wave energy. How can entrepreneurs tap into waves and tides?
Wave action and tidal energy are two dramatically different animals. Tidal energy is episodic and requires huge investment, not to mention the environmental damage of modifying tidal areas to control the flow of water. Several such projects have been delayed or even stopped by lawsuits filed by environmental groups.
Wave action energy is in its infancy and to me looks extremely practical. Page 65
Geothermal energy is almost unlimited. How can entrepreneurs develop this energy source?
A geothermal power plant costs about the same as a coal fired one. That is still a sizable investment of capital and would usually require a group of investors who pool their resources. Once the plant is in operation there is no cost for fuel and fuel delivery. Since geothermal energy is reachable in about 60% of the US, it could be located near power demands cutting transmission costs dramatically. As with any site of this size, location can be critical and difficult.
Many observers consider the distribution of energy to be a major source of energy loss and potential for additional benefit. How can entrepreneurs solve the distribution problem?
Power transmission is a mature technology with many years of efforts at improvements. As with many mature technologies, innovation can be very difficult to achieve and put in place. Innovation in most mature industries comes mostly from outside of the industry. So there is room there for entrepreneurial effort Transmission and transformer losses can run as high as 15%, a very sizable and costly amount. Advancing technology in this area is desperately needed That is why it is cost effective to have power generated as near to where it is used as can be made practical and realistic.
What potential do non combustion based vehicles hold for the near future?
Personally, I believe these vehicles will be almost all battery powered. I really don’t see much practicality for fuel cell vehicles. Still, hybrid battery-fuel cell vehicles are another possibility. There has been some research into a methanol fuel cell. This would be much less costly and far more practical fuel to distribute and use than hydrogen. From early reports it looks like the system itself would be much less costly than the hydrogen fuel cell.
How can the various solutions be combined into a holistic system?
It’s not actually how can they, but simply that they will. Just look at the present variety of say hand power tools. There are a great variety of these tolls designed for a variety of uses. Many are interrelated using interchangeable parts and power sources. Standardization of battery types and connections is probably the next step. The cell phone industry is one where this standardization is virtually non existent. Even between different models of the same make of phone, batteries and charger connections are almost always different. This makes for confusion and higher costs. Unfortunately the way we pay for cell phones precludes the effort at standardization as each manufacturer seeks to sell and promote only his own systems including a new battery and charger with each new phone.
Which energy source holds the most potential for the volume of energy needed for the future?
Right now I lean toward geothermal for electricity, and alternative fuels in PHEVs for transportation. I think we will remain at least partially dependent on petroleum fuels for quite some time.
If you had a wish list of solutions available now, what would they be?
Wish List Page 113
is there a role for small scale entrepreneurship ideas for homes and businesses?
There is always a role for innovation and creative thinking around homes and businesses. The advantage any entrepreneur has in these areas is that of simply being there. The bright, creative mind can always see places where improvement or even drastic change is needed. Filling those needs has always been the role of the entrepreneur.
What is the first step an entrepreneur should take toward developing an energy breakthrough?
Select an area of expertise or interest and find out everything possible about that area. Then decide where some creative thinking and effort might fill an empty or poorly held niche in the overall energy picture. The entrepreneur's knowledge interest and expertise should lead him or her to where the best opportunities for innovation lie.
What is next for Howard Johnson?
Several books and book promotions. I have two anthologies and two novels in the works. Three should be published by the end of the year. The original book, Solutions, that started me on the effort that resulted in Energy, Convenient Solutions could be ready for publication within a year.
