Green & Clean

I had a call yesterday from a business buddy of mine in New York. Let's call him "Ed". That's not his real name, but you know how it goes... "everything you are about to read is true... only the names have been changed to protect the innocent".

Ed wants to involve me in his latest venture and while my first reaction was "no, sorry, too busy", I did give him the courtesy of listening to the proposition. After all, there's nothing like a "Plan B".

Like many others who know what's good for them, Ed's jumped on the Global Warming bandwagon, and like those others, he's not there because he shares some deep communal concern about the future of our planet... no... he's there because there's a buck in it.

Let me explain...

You've heard about Global Warming, right? About how "greenhouse gasses" are allegedly making the climate heat up, and about how those evil fossil fuels upon which we all rely are eventually going to kill us, and about how coal is the evilest of all. (Those of you who are regular readers will already know my views on this... and if this is your first time here, then take a little time reading my archives.)

You've probably heard about "carbon credits", and "green energy too", and you might even have checked the little box on your power bill opting for "Green Energy", even though it costs a few dollars more.

So here's the deal...

Ed recently bought a piece of land somewhere in the Excited States. It's "contaminated" land, in that it used to be a coal mine, so it's covered with mine tailings. They're the bits left over after you pull out whatever it is you're pulling out of the ground. When you mine coal, you end up with a great deal of what used to be called "sub-optimal" ore... that is, coal that's in bits too small to be useful. Miners have been in the habit of piling that coal up in big piles, perhaps thinking that one day, the technology would be developed to make it valuable.

So Ed now owns this huge mound of coal dust, and the technology DOES now exist to make it useful. In simple terms, you crush it up and make it into little briquettes.

On January 1, a new law came into effect in the United States. Now before I explain that law, let me say I'm not beating up the 'Americans' per se, because their new law is no better or worse than anyone elses.

Under that law, the US Government gives Ed a subsidy for making the coal dust into briquettes. The power stations love the briquettes because they're about a third of the price of regular coal and their uniform size means they're about 20% more efficient.

So far this is pretty boring right? Yeah, I thought so too, but here's where it get's cleaner and greener...

...because the bureaucrats decided that if Ed adds 20% biowaste to the briquette, it stops being "coal", and turns magically into a "green, zero emission bio fuel". In this case, Ed's "biowaste" will be a type of flour, though he could use wood chips or even human poo if he wanted to. It's still coal, of course, with all of the same emmission profile that it had before, except that now, by the stroke of a pen, it isn't, and is deemed to have zero emissions that won't count towards America's carbon emissions score.

And "green" fuel attracts an additional subsidy from the US Government. Governments and entrepreneurs all over the world are rushing into this loophole. Ed will make a fortune.

I love the simplicity. Everyone makes or saves money. The company that owns the land can now clean it up for profit, the energy producer pays about 70% less to generate the same amount of electricity, the flour producer gets to save money on disposing of its inedible flour, and the US Government gets to save on carbon emission fines by turning coal into something it isn't.

I know what you're thinking. "Surrely our governments wouldn't try a stunt like this. Aren't they there to actually fix the problem?" No. They're not. They're there to come up with processes by which things can go on much as before. They just have new names.

I did warn you about bureaucrats and global warming, didn't I?