Where’s the next boom? Maybe in `cleantech’

October 6, 2009

Energy breakthroughs could be the next big thing, but how many jobs can they generate?

By Jordan Robertson, AP Technology Writer
9:33 pm EDT, Tuesday October 6, 2009

SAN FRANCISCO (AP) — Our economy sure could use the Next Big Thing. Something on the scale of railroads, automobiles or the Internet — the kind of breakthrough that emerges every so often and builds industries, generates jobs and mints fortunes.

Silicon Valley investors are pointing to something called cleantech — alternative energy, more efficient power distribution and new ways to store electricity, all with minimal impact to the environment — as a candidate for the next boom.

And while no two booms are exactly alike, some hallmarks are already showing up.

Despite last fall’s financial meltdown, public and private investments are pouring in, fueling startups and reinvigorating established companies. The political and social climates are favorable. If it takes off, cleantech could seep into every part of the economy and our lives.

Some of the biggest booms first blossomed during recessions. The telephone and phonograph were developed during the depression of the 1870s. The integrated circuit, a milestone in electronics, was invented in the recessionary year of 1958. Personal computers went mainstream, spawning a huge industry, in the slumping early 1980s.

A year into the Great Recession, innovation isn’t slowing. This time, it’s better batteries, more efficient solar cells, smarter appliances and electric cars, not to mention all the infrastructure needed to support the new ways energy will be generated and the new ways we’ll be using it.

Yet for all the benefits that might be spawned by cleantech breakthroughs, no one knows how many jobs might be created — or how many old jobs might be cannibalized. It also remains to be seen whether Americans will clamor for any of its products.

Still, big bets are being placed. The Obama administration is pledging to invest $150 billion over the next decade on energy technology and says that could create 5 million jobs. This recession has wiped out 7.2 million.

And cleantech is on track to be the dominant force in venture capital investments over the next few years, supplanting biotechnology and software. Venture capitalists have poured $8.7 billion into energy-related startups in the U.S. since 2006.

That pales in comparison with the dot-com boom, when venture cash sometimes topped $10 billion in a single quarter. But the momentum surrounding clean energy is reminiscent of the Internet’s early days. Among the similarities: Although big projects are still dominated by large companies, the scale of the challenges requires innovation by smaller firms that hope to be tomorrow’s giants.

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Obama signs $787 billion stimulus into law

February 17, 2009

Ceremony setting highlights investment in ‘green’ technology

By Robert Schroeder, MarketWatch
3:39 p.m. EST Feb. 17, 2009

WASHINGTON (MarketWatch) — President Barack Obama signed the sprawling $787 billion economic stimulus package into law on Tuesday, saying it will help the struggling U.S. economy but warning that the recovery process will be challenging.

“Today does not mark the end of our economic troubles,” Obama said before signing the bill in Denver, Colo. “Nor does it constitute all of what we must do to turn our economy around.”

But, said Obama “it does mark the beginning of the end” of what the U.S. needs to do to create jobs, provide relief to families and pave the way for long-term growth.

Obama signed the bill on Tuesday afternoon in a ceremony in Denver after touring a solar panel installation project at the Denver Museum of Nature and Science. Among other things, the bill funnels money to alternative energy projects, provides tax cuts for individuals and businesses and gives aid to states.

Congress approved the bill on Feb. 13. Democrats voted overwhelmingly in the House and Senate to back the bill, but no Republicans voted for it in the House and only three voted for it in the Senate.

Obama has repeatedly described the stimulus as the first in a multi-part strategy to hasten an economic recovery. Read a summary of the stimulus.

On Wednesday, the administration plans to announce details about a $50 billion program to modify mortgages for troubled homeowners. The Treasury Department plans to use $50 billion of the remaining $350 billion in a bank-bailout fund for a program to help troubled homeowners avoid defaulting on their loans by subsidizing mortgage payments.

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Obama aide promotes job plan, warns automakers

November 24, 2008

Monday November 24, 12:16 am ET
By Jim Kuhnhenn, Associated Press Writers

Obama adviser promotes economic aid plan, seeks swift congressional action; automakers warned

WASHINGTON (AP) — President-elect Barack Obama signaled Sunday he will move urgently and aggressively to rescue the plunging economy, demanding swift passage by Congress of a massive two-year spending and tax-cutting recovery program. “We’re out with the dithering, we’re in with a bang,” a top Obama aide said.

Obama’s plans, outlined by his transition team on television talk shows, could put aside his campaign pledge to repeal a Bush tax cut for the wealthy. With the downturn in the economy, those tax cuts may remain in place until they are scheduled to die in 2011, said William M. Daley, an economic adviser. “That looks more likely than not,” he said.

Obama aides called on lawmakers to pass, by the Jan. 20 inauguration, legislation that meets Obama’s two-year goal of saving or creating 2.5 million jobs. Democratic congressional leaders said they would get to work when Congress convenes Jan. 6.

Though Obama aides declined to discuss a total cost, it probably would far exceed the $175 billion he proposed during the campaign. Some economists and lawmakers have argued for a two-year plan as large as $700 billion, equal to the Wall Street bailout Congress approved last month.

“I don’t know what the exact number is, but it’s going to be a big number. It has to be,” said Obama economic adviser Austan Goolsbee.

With the wounded economy worsening, the Obama team’s new assertiveness was a recognition he needed to soothe financial markets with signs of leadership. It also foreshadowed a more hands-on role by Obama to influence congressional action during the final weeks of the transition.

Obama will introduce his economic team on Monday, including Timothy Geithner as treasury secretary and Lawrence Summers as head of the National Economic Council. Obama also has settled on New Mexico Gov. Bill Richardson as his commerce secretary.

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Historic bailout bill passes Congress; Bush signs

October 3, 2008

Friday October 3, 6:02 pm ET
By Julie Hirschfeld Davis, Associated Press Writer

Congress enacts historic bailout legislation for financial industry; Bush quickly signs it

WASHINGTON (AP) — With the economy on the brink of meltdown and elections looming, a reluctant Congress abruptly reversed course and approved a historic $700 billion government bailout of the battered financial industry on Friday. President Bush swiftly signed it.

The 263-171 vote capped two weeks of tumult in Congress and on Wall Street, punctuated by urgent warnings from Bush that the country confronted the gravest economic disaster since the Great Depression if lawmakers failed to act.

“We have acted boldly to help prevent the crisis on Wall Street from becoming a crisis in communities across our country,” Bush said shortly after the plan cleared Congress, although he conceded, “our economy continues to face serious challenges.”

His somber warning was underscored on Wall Street, where enthusiasm over the rescue gave way to worries about obstacles still facing the economy, and the Dow Jones industrials dropped 157 points. The Labor Department said earlier in the day that employers had slashed 159,000 jobs in September, the largest cut in five years.

The historic vote was a striking turnaround from the measure’s spectacular failure earlier in the week, which had triggered a massive stock sell-off and prompted jittery lawmakers — fearing a crushing economic contagion that was spreading to their constituents — to reconsider.

“Let’s not kid ourselves: We’re in the midst of a recession. It’s going to be a rough ride, but it will be a whole lot rougher ride” without the rescue plan, said Rep. John A. Boehner, R-Ohio, the minority leader, as he prepared to cast his vote for the most sweeping federal intervention in markets in decades.

Treasury Secretary Henry Paulson pledged quick action to get the program up and operating.

The bailout, which gives the government broad authority to buy up toxic mortgage-related investments and other distressed assets from tottering financial institutions, is designed to ease a credit crunch that began on Wall Street but is engulfing businesses around the nation.

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Key tax pieces of Senate bailout bill

October 1, 2008

Wed Oct 1, 2008 3:56pm EDT

(Reuters) – To improve chances of passing a $700 billion financial industry bailout package, Senate leaders have agreed to combine it with a package of tax breaks for renewable energy, businesses and middle class workers.

The roughly $150 billion cost of the tax package is partially offset by some revenue raising measures including one that would change the tax treatment of deferred compensation paid through offshore tax haven accounts.

Major tax provisions in the bill include the following:

* Extends Alternative Minimum Tax relief for some 24 million middle class taxpayers through 2008. Includes some additional AMT relief for people who exercised company incentive stock options.

* Extends provision allowing homeowners who do not itemize their taxes to take a deduction up to $1,000 for state and local property taxes.

* Extends through 2009 a provision allowing some taxpayers to take a deduction for state and local sales taxes.

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Massive Arctic ice shelf breaks away

September 3, 2008

Wed Sep 3, 2008 11:39am EDT

By David Ljunggren

OTTAWA (Reuters) – A huge 19 square mile (55 square km) ice shelf in Canada’s northern Arctic broke away last month and the remaining shelves have shrunk at a “massive and disturbing” rate, the latest sign of accelerating climate change in the remote region, scientists said on Tuesday.

They said the Markham Ice Shelf, one of just five remaining ice shelves in the Canadian Arctic, split away from Ellesmere Island in early August. They also said two large chunks totaling 47 square miles had broken off the nearby Serson Ice Shelf, reducing it in size by 60 percent.

“The changes … were massive and disturbing,” said Warwick Vincent, director of the Centre for Northern Studies at Laval University in Quebec.

Temperatures in large parts of the Arctic have risen far faster than the global average in recent decades, a development that experts say is linked to global warming.

“These substantial calving events underscore the rapidity of changes taking place in the Arctic,” said Derek Mueller, an Arctic ice shelf specialist at Trent University in Ontario.

“These changes are irreversible under the present climate and indicate that the environmental conditions that have kept these ice shelves in balance for thousands of years are no longer present,” he said in an e-mailed statement from the research team sent late on Tuesday.

Mueller said the total amount of ice lost from the shelves along Ellesmere Island this summer totaled 83 square miles — more than three times the area of Manhattan island.

The figure is more than 10 times the amount of ice shelf cover that scientists estimated on July 30 would vanish from around the island this summer.

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World Crude Production Has Peaked – Pickens

June 17, 2008

WASHINGTON – World crude oil production has topped out at 85 million barrels per day even as demand keeps climbing, helping to drive a stunning surge in prices, billionaire oil investor T. Boone Pickens said on Tuesday.

“I do believe you have peaked out at 85 million barrels a day globally,” Pickens, who heads BP Capital hedge fund with more than US$4 billion under management, said during testimony to the Senate Energy and Natural Resources Committee.

The United States alone has been using “21 million barrels of the 85 million and producing about 7 of the 21, so if I could take just a minute on this point, the demand is about 86.4 million barrels a day, and when the demand is greater than the supply, the price has to go up until it kills demand,” Pickens told lawmakers.

US crude futures have risen by a third since the start of the year and more than six-fold since 2002 as surging demand from China and other developing nations outpaces new production.

Oil slipped on Tuesday, a day after touching a record high near US$140 a barrel, but remained above US$133 a barrel.

Pickens, who announced a US$2 billion investment in wind energy earlier this year, told lawmakers during a hearing on renewable electricity that he expected “the price of oil will go up further.” Without alternatives, the cost of foreign oil will drain the United States of more resources, he said.

“In 10 years, we will have exported close to US$10 trillion out of the country if we continue on the same basis we’re going now. It is the greatest transfer of wealth in the history of mankind,” he said.

Pickens downplayed the role that speculative trading and institutional investors — forces some see behind the high oil prices — have had in the price trend.

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