"The Amtrak Project" Note: Emails are organized in the order received, with first received at the top. Jim: Ref your riddle: The ID was made by checking the serial numbers of her b****t -- :) -- implants. Cheers, Peter N. Williamson *** Dear Jim, Your piece is heartfelt and right, but you may have picked a wrong scapegoat. I am just as against the subsidies as the next guy, but people are missing an important point when discussing biofuels. Ethanol was never supposed to be cheaper than gasoline, only cleaner. How's that for a clear objective? This whole thing was hijacked by the Big Oil and their Big Finance when, largely artificially, the oil prices went through the roof to $100+/bbl level. Incredibly, they not only got even richer in the dying years of the Bush Jr. presidency, but managed to convince people that biofuels can actually be cheaper than gas. Now we are just picking up the pieces of the biofuel industry, additionally poisoned with subsidies (kinda like an industrial-style chemotherapy). So let's not kick the patient while they are down, recovering. They are just a victim, like the rest of us. Best regards, Martin Mizera, General Manager Unicorn Chemical LLC (bioethanol makers), currently having moved operations to Europe to use their subsidies for essentially a U.S. company *** Jim: Very nice analysis and analogy regarding the alternative fuels situation. I'll reserve comment on several of the major points as I have no interest in publishing a competitive newsletter, though I agree with about 98 percent of what you're saying. I do however think there is a place for subsidies provided they have clear objectives and a well-defined end point. How else to develop critical new technology that would be deemed too risky for today's accountant-driven R&D management? We clearly need to end our dependence on foreign oil. 30 years of half-hearted attempts to develop alternative fuels haven't done the trick. I'm OK with the government providing incentives (or subsidies) to accomplish this objective, but it has to be done with the unmistakable understanding that after some period of time (2 - 5 years) the subsidies go away and the developed technology better be able to make money on its own. Keep up the good work, Bob Makolin *** Bob- Have you ever seen a government give away program go away? Jim *** See below. Why am I not surprised? Your loyal reader, Bob Erchinger Product Development Manager Vacumet Corp. Franklin, Massachusetts USA "Climate accounting error may actually increase greenhouse gas release "Fast-growing biofuel crops grown on abandoned farmland can capture more carbon than exisiting plant, reducing overall GNG emissions. Cutting down a forest to plant biofuel crops does the opposite. But a quirk in the way carbon is now counted n current U.S. climate legislation and the Kyoto Protocol exempts all bioenergy sources from carbon counting." Source:R&D Magazine [daily@abrd-media.com] Here is the link: http://tinyurl.com/yjo255c Current carbon accounting measures mistakenly exempt all the carbon dioxide emitted from bioenergy, regardless of the source. According to a number of studies, including one by the U.S. Department of Energy, applying current carbon accounting measures globally could lead to the loss of most of the world's natural forests. *** Jim, Some "hard nosed" business people aren't that smart either! Case in point. Electrophotography (xerography), invented by Chester Carlsson and proven feasible by Batelle Memorial Institute, but turned down by companies like IBM and Kodak (etc), finally taken up by a small photographic paper company, Haloid (Joe Wilson), who decided to take the plunge. The success of the company (now Xerox) at that time was the result of a lot of hard work by the people in the trenches, so to speak. And the decision to rent the machines was very significant. Every "click" made the invoice printer run. A parallel success was in the marketing of Xerox brands papers, most likely attributable at least in part to one. In the early days the company was faced with paper industry products that didn't work well. Someone who had worked for Glatfelter now worked at Xerox and engineered a quality control system that accepted paper that worked. Paper was rejected until it met the rigorous standards that were set up. And the paper was still plain? The profits from this part of the business kept many invoice printers running! This is only chapter one of a many faceted story of many people, many successes and failures. That is the human story. Chuck Green Webster, New York USA (p.s. I didn't work for Glatfelter) --- Jim, But to show how complicated it can get, it seems that Xerox was slowing the invoice printer when customers using "other" paper were having all kinds of jam problems decided to turn to competitive products. Wouldn't it have been wiser to help competing paper manufacturers make good paper and thereby strenthen the image of Xerox products? There would have been a loss of some paper revenue, but an increase in hardware revenue. Chuck *** Dear Jim interesting reading i don't think $2.49 is anywhere near cheap enough...you need to have a very clear cost advantage..one order of magnitude is good...two is better...especially if you got a lot of work to do to make it happen and want a good margin to last 50years. i suggest you encourage people to aim higher still [lower price] and then do their engineering homework... personally, i'm currently more partial to geothermal energy but haven't done enough research to qualify my position and am open to other energy solutions...people tell me some good work was done in the seventies but then it was sat on...by the then vested interests i also think you need to add that not all engineers [people who make it happen day in day out] and scientists [people who see/do things thrice...well maybe 10 repeats... ok maybe rely on stats from large populations...then typically move on] are the same the scenario you describe "Leo Salard was a Hungarian physicist. He escaped Europe and came to the US. He was extremely concerned that Germany was developing an atomic bomb. He went to Albert Einstein, convinced him of his perceptions, whereupon Einstein wrote a letter to President Roosevelt on July 16, 1939." says it all in terms of the people required to set the appropriate wheels in action for large problems that need to be tackled quickly....evidently it was not necessary to have the nuclear bomb to complete world war 2 but i guess it would be argued it was a necessary evil...funny expression that 'necessary evil', not entirely sure i'm comfortable with it. another example is perhaps the maxim machine gun story and how it was developed, the British used these for easy victories for sometime [albeit on small impoverished peoples] ...at least until everyone else had them too... the next result is you start to loose... .the next step is really an electronic weapon [you could perhaps already argue that the various electronic weapons/virus are already circulating] and for this you need a energy source ... ah energy, the second key to civilisation [the first is social cohesion/organisation/general collectively will to live a certain way] Anyway....awards are generally a distraction...their value is in drawing attention to the efforts somebody has made so that we have some good news stories...you are right...they continue as a social currency as do positions of privilege [privilege being the key word] anyway, i hope the US economy can recover and we're not left with a country with no money, lots of debt, and lots of nuclear weapons and desperate people to feed... you guys have really gotta dig deep and see a new way forward that is until now unanticipated [on many fronts]... i hope you ask the questions to find the answers 3xcheers, Richard Helmer CSIRO Australia PS: Australia only lives on for now because of our dirt, plants and animals....we have a few cultural products but not a lot in-between that can be called 'industry', and insufficient funds and insignificant local markets to do much else...the world is a global market and you need to make sure you've got a few international co.s to lead the way...you still have that...hopefully they haven't degenerated into hungry beasts...i really should do some more study on economics sometime PPS: here in Victoria we sold/privatised our coal powered fire stations sometime ago...i still cant work out whether that was genius to get the best price or a liability as we head into uncertain C pricing...we don't appear to have had a tangible option to re-invest in the the new energy solution to service 5 million people [not that many actually] so i'm not sure where the $s evaporated to...until now we haven't had the stomach for nuclear...i'm still not convinced we need it but probably will need to have some necessary evil at some point to live through the Mexican standoff..so long as we all stand off its ok... *** Jim- I don't get always around to reading your weekly notes, but when I do, I enjoy them... I find them both challenging and mentally stimulating... To be blunt, I do not know why I receive them... I never signed up for it, it just started coming to me... Perhaps it is a courtesy that you offer to people in my job, (I teach in the Packaging Science Department at Clemson University). I have never felt compelled to write before, but I feel I must challenge you on one of your points in the Amtrak email. Specifically, you suggest in your Amtrak email that "hard-nosed business people" would make better business decisions about energy than government, academia, scientists, etc... First, I must point out that some of those "hard-nosed business people" were at the helms of the banks, insurance companies, automotive companies (and so on) that are currently contributing to our economic woes... Secondly (and more importantly) hard-nosed business people make decisions based on time windows that are too short. I have served in two careers... I worked for 22 years in the flexible packaging industry and now for 5 years in academia... I have had the pleasure of working for both the hard-nosed business people that you are touting for their business acumen and the much-maligned bureaucrats that control state-subsidized educational institutions... To be blunt, I find that hard-nosed business people are just as poor at making decisions and directing activities as governments are... In my industrial career, business made poor decisions about the long term because they were busy managing the company's numbers to maximize their year-end bonuses... I think the difference between your perspective, as exemplified by your Pampers example, and my perspective is a question of timeliness of compensation and measurement... I think that American business currently considers short-term time windows as opposed to long term windows...P&G probably thought more long-term in the 1950's... I don't really want short-term thinking determining my future, be that in energy, economy, government, paper-making or packaging... Hard-nosed business people, specifically executives, report to and are measured by boards of directors... Boards of directors use recent and current stock prices to measure the performance of executives and compensate them... If stocks fall over a 12 or 18 month period, executives are paid less and at risk of losing their jobs... This is a very short period of time, and this tactic for measurement and compensation begets short-term thinking... In an atmosphere like this, I think the P&G executives who decided to spend research $ on the diaper project in the 1950's would have likely been under pressure to abandon the project because of the short-term research cost. Yet today, we all recognize that it was a good decision. Although I agree with your assessment in general of the Japanese MITI, I suggest that the reason that Toyota and Honda are in better shape than GM & Chrysler is that Japanese business thinks (or maybe they used to think) in longer-term time windows... Long-term thinking triggers investment in research and capital improvements that benefit companies over periods of years... Sometimes, these decisions take longer than 12-18 months before the value of the improvements begin to pay off... What might be considered a poor decision on Wall Street may be an excellent decision if we apply a 5- or 10-year cost benefit analysis rather than a 12 month analysis... So, before we appoint hard-nosed business people to decision-making roles in energy policy, we need to make sure that they are capable of longer-term vision than what they demonstrate in today's marketplace... I hope to live longer than 12-18 months into the future... Therefore, I want people who make decisions about my future to be thinking on a longer term. Again, thanks for your weekly insights... Duncan Darby Clemson University Clemson, South Carolina USA ### Have a comment? Send your email to jthompson@taii.com. Unless you tell us otherwise, we will assume we can use your name if we publish your letter.