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Every business day, Canada Post Corp. delivers some 40 million pieces of mail to about 14 million Canadian residential and businesses addresses. More than 12,000 vehicles – from heavy-duty trucks that transport skids of mail to the cars that your mailman uses – travel more than 20,000 delivery routes in Canada.
It amounts to almost 170 million kilometres every year, a total distance that brings transportation costs to around $500-million a year – and climbing, with oil rocketing to new highs this week and trading at $140.21 (U.S.) a barrel after Friday’s close.
To take a bite out of escalating energy costs, Canada Post president and chief executive officer Moya Greene formally submitted a request to the federal government Thursday for a 6-cent increase in the price of domestic stamps over the next three years.
“It’s not going to bring us all the way, but it’s going to contribute to us staying in the black, and for us not to become a burden on the tax payer,” Ms. Greene explains in an interview.
If the increase is approved, it would cost 54 cents to send a letter within Canada – instead of the current 52 cents – starting in January, 2009. Stamps for domestic letters would then increase by another 2 cents in 2010 and again by 2 cents in 2011. Each 2-cent increase will add about $60-million a year in revenue.
The Crown corporation also announced that it is asking for a 2-cent increase to 98 cents for regular U.S. mail and a 5-cent increase to $1.65 for the international mail – in addition to raising the cost to ship a variety of other parcel sizes.
It’s a business
It’s been 13 years since the corporation last had to rely on government subsidies to boost revenue and Moya Greene is looking to ensure that record gets longer.
Following a series of postal strikes in the 1960s and 1970s, Canada Post became a Crown corporation in 1981. (Its predecessor, the Post Office Department, had accumulated an operating deficit of almost $500-million from 1980 to 1981.) Under its new mandate, the corporation had to become a financially sustainable company. In the last few years, it has consistently turned a profit, but the returns are shrinking.
Last year, the corporation generated $7.5-billion in revenue for a profit of $54-million. This year, it is planning for a profit of $25-million.
Canada Post boasts its prices for domestic service are still cheaper than most national postal services and that only Australia and the U.S. do better (each at about 45 cents Canadian). And, as opposed to Canada Post’s profit, the United States Postal Service managed to rack up a loss of $5.1-billion last year.
Hikes are last resort
Ms. Greene says that before Canada Post even considered jacking up the price of stamps and the cost to ship other parcels, the corporation looked at cutting back costs in all areas.
“We batten down the hatches everywhere,” she notes, referring to the almost $150-million the company has projected to save this year.
In light of high energy prices, some of the more significant decisions that have come in recent months include reducing company travel and cutting back on the amount of internal letter mail being sent out. Instead, the company will use intranets and blogs to maintain communication.
Perhaps most significantly is Canada Post’s refusal to pay the additional $15-million that Air Canada has requested to ship a majority of their mail cargo across the country, in light of the airline’s soaring expenses for fuel.
“We’re not going to bear that kind of increase,” Ms. Greene said.
The corporation has opted instead to piggyback with Purolator Courier Ltd., of which it is a majority owner. It will use Purolator’s chartered aircraft fleet from Kelowna Flightcraft Air Charter Ltd. and expects to switch over completely by the end of the year.
“Like everybody else, we’re having to do things in different ways to respond to these costs pressures,” Ms. Greene says.
The CEO notes there may be some “teething issues” during the switchover, but not enough to compromise delivery standards. “Our delivery standards are very, very important to our customers.”
Paying more to get green
For the Crown corporation, it’s a constant juggling act balancing the shift toward modernizing its technology and cutting expenses to avoid a sea of red ink.
If it wants to continue developing green technology it won’t be able to sidestep millions of dollars in expenses before any long-term benefits take hold.
All new Canada Post buildings will be LEED certified, which refers to the Leadership in Energy and Environmental Design rating system that recognizes sustainable construction. The first plant to have this designation will be in Winnipeg and is slated to open in 2010.
The company is phasing out its larger delivery vans from 2010 to 2015 in favour of smaller cars with smaller engines. It is also currently testing cars that run on alternative fuel, and it hopes to have about 32 hybrids in circulation in rural Canada for further testing in the next six months.
“You can’t just take perfectly good, half-of-life vehicles and say, ‘We’re not going to use them,’“ Ms. Greene says.
Source: http://www.reportonbusiness.com/servlet/story/RTGAM.20080627.wdecision0628/BNStory/robAtWork/?page=rss&id=RTGAM.20080627.wdecision0628
June 27, 2008 4:00 AM PDT
Someday, the electricity grid will operate with the equivalent of a giant hard drive. But in the short term, grid storage will look more like a PC’s cache or RAM, able to serve up small bursts of power to keep things from crashing.
A panel of experts, organized by the New England Clean Energy Council, earlier this week said that the utility storage field has enormous potential. But rapid deployment of storage devices is held back by concerns over technology risk and financial complexity.
Technology optimists say that wide-scale energy storage will change the face of the transmission grid and make wind and solar power more compelling economically.
In this scenario, utilities store electricity made from renewable sources or produced during off-peak times. Then, when demand for electricity peaks in the middle of the day, they could draw from the stored-up charge.
This “peak shaving” practice avoids the need to build new power plants to meet growing demand. Utilities could also idle dirty and expensive “peaking plants,” which are only turned on during times of high demand, such as very hot summer days when air conditioners max out the load.
But moving megawatts’ worth of electricity around the grid like files on a computer is more theory than practice these days.
“Buying power at night and then selling it during the day–something like that will happen maybe in 30 or 40 years when storage technologies are one-tenth the costs they are today,” said Ric Fulop, co-founder and vice president of business development at lithium-ion battery company A123 Systems.
But as utilities try out new technologies for different uses, Fulop and others predicted that storage will start to take hold in a variety of ways.
“I think we will see a lot of deployments in the next few years that will change how the grid works,” Fulop said. “Then we’ll see utilities jump on the bandwagon.”
Two markets for energy storage
A123 Systems, which makes batteries for plug-in hybrids and power tools among other devices, is actively pushing into utility storage with more than 100 people dedicated to the market, said Fulop.
It’s targeting what’s called grid stabilization, or grid support, where warehouse-size installations of lead-acid batteries are the incumbent technology. That alone is a multimillion dollar market and will pave the way for different grid storage applications, he said.
With grid stabilization, kilowatts’ or a couple of megawatts’ worth of electricity are pumped onto the grid for a short amount of time, from a few seconds to under an hour. It’s used to match grid demand and supply to make generators run more efficiently or to ensure a steady frequency.
Earlier this year, grid operators in Texas had to shut down power to its customers because the wind died down momentarily, effectively cutting off supply from its wind farms, noted Lawrence Gelbien, vice president of technology at utility NStar.
“If you could take the wind power, store it in batteries, and discharge when the wind starts again, then that’s a fine application of storage,” he said.
Gelbien said that storage units could be deployed in place of installing more “wires and poles” in a place that isn’t served with enough electricity to meet demand for only a few days of the year. Because storage devices are movable, they could be redeployed in other places after a few years as the need arises.
Grid support is relatively mature at about $2.4 billion and growing at 3.3 percent per year, said Lux Research President Matthew Nordan.
Batteries with different chemistries as well as ultra-capacitors, such as the ones being developed by secretive start-up EEStor, serve this end of energy storage, Nordan said.
Flywheels are also a viable alternative. Flywheel maker Beacon Power earlier this month said it expects to have a megawatt-size machine, able to store 15 minutes of power, on the grid by the end of this year.
Dizzying array of technologies
At the opposite extreme are companies pursuing the “bulk storage” market where power is delivered for more than an hour.
This part of the market, where companies are developing a range of technologies, from so-called flow batteries to compressed air storage, represents the biggest business opportunity in grid storage.
The end game is to allow utilities to provide baseload power–meaning electricity during the middle of the day when demand is highest–with stored energy.
If only 10 percent of the installed wind power plants adopted large-scale energy storage, the market would hit $50 billion, according to Lux Research. That’s because electricity costs more for utilities to purchase and deliver during peak times.
But utilities are risk-averse, and power plants take 5 to 10 years to construct. As a result, Lux Research pegs the market at $600 million in 2012, growing at about 25 percent per year.
One company tackling bulk storage head-on is General Compression, which is developing a wind turbine with an integrated air compressor.
Air is compressed and pumped underground into geological features like depleted gas wells or limestone caverns. There are currently two compressed air energy storage (CAES) plants in operation with a few others in development. But some utilities are seriously considering CAES.
“There is an increasing gap between the growing demand for electricity and the availability of options,” said Julianne Zimmerman, chief marketing officer for General Compression. “With increasing shareholder resistance to new fossil fuel and nuclear plants, there’s a shrinking set of options.”
Different types of batteries are competing for bulk storage as well.
So-called flow batteries, where liquid chemicals move between huge storage tanks to deliver a charge, are also being tested on the grid.
Start-up Deeya Energy says it is developing a flow battery for grid backup power or to integrate wind and solar power that will be far cheaper than lead-acid, lithium-ion, or nickel-metal hydride batteries and cheaper than fuel cells. Its products will be able to delivery between 2 kilowatts and 2 megawatts of electricity for 2 hours or up to 24 hours, it says.
Another flow battery maker, VRB Power, is currently testing systems, including a 5-kilowatt, four-hour prototype in Florida.
Pumped hydro, where water is pumped up a mountain and released as needed in a hydro plant, is also used, but its use is limited by the number of available sites.
The latest generation of concentrating solar power plants are being developed with integrated storage, in the form of hot water or even molten salt to deliver electricity after the sun goes down.
Challenges
But for all the promise of making the grid operate more like a hybrid car, there are serious challenges, panelists said.
Many of these technologies don’t have a 15-year track record that utilities like to see, which makes them skeptical. Large-scale battery projects requires systems integration that involves batteries, electronics, software, and thermal management systems, said A123 Systems’ Fulop.
They are also very capital intensive. To get around that problem, Beacon Power doesn’t sell its flywheel. Instead, it bids on power generation contracts and sells the electricity to utilities.
Regulations for utilities are written around power generation units, but not energy storage, said Matt Lazarewicz, vice president and chief technology officer of Beacon Power.
“The market rules have to change to allow nongeneration assets to connect to the grid and get paid for it,” he said. “And to make the grid look more like a Prius, utilities need to change their mindset to make more efficient use of the generation system.”
Rising fossil fuel prices are an incentive to explore energy storage, as well as the rising costs of constructing new plants.
Ideally, a utility would be able to get money from a storage unit in multiple ways. One rural co-op installed a four-hour, 300-kilowatt storage system to offset peak electricity rates and to provide backup power to a nearby industrial company, said Matthew Johnson, director of business development at Gaia Power Technologies.
Utilities are showing interest in more options, but storage is still very much an emerging technology.
“There’s a lot of technology development and new work. But one of the reasons we don’t see more of it today is because the economics of this are actually quite complex,” said Bruce Phillips, director at Northbridge Group.
Source: http://news.cnet.com/8301-11128_3-9977209-54.html?tag=nefd.pop
June 26, 2008
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Charlotte, N.C.-based Duke Energy (NYSE: DUK) announced today that it acquired Rutland, Vt., wind developer Catamount Energy for approximately $240 million plus assumed debt.
Duke said Catamount Energy has approximately 300 megawatts of renewable energy in operation, with 1,750 MW of development interests in several states and the U.K.
“This acquisition reinforces Duke Energy’s commitment to clean, renewable energy as a major component of electricity generation throughout the U.S.,” said Wouter van Kempen, president of Duke Energy Generation Services.
Duke purchased the wind developer from Diamond Castle Holdings, a New York private equity firm.
“Bringing in the experience and proven track record of Catamount provides Duke Energy with an opportunity to broaden its investment in renewable energy, and continue its efforts to reduce carbon emissions,” said David Marks, sr. VP of wind energy at Duke Energy Generation Services.
Duke said today’s deal is a continuation of its strategy to develop renewable energy. In May 2007, the company purchased Austin, Texas-based Tierra Energy (see Duke buys Tierra Energy’s wind business).
And earlier this month, Duke’s Ohio unit issued a request for proposals for a minimum of 61,000 megawatt hours by 2009 to help it comply with requirements under Ohio’s new renewable energy portfolio standards (see Duke Energy issues renewable RFP for Ohio).
Source: http://media.cleantech.com/3031/duke-energy-buys-wind-developer-for-240m
June 26, 2008 09:11 AM Eastern Daylight Time
With Oil Prices at All-Time Highs, Groundbreaking Awards Totaling More Than $4 Million Aim to Catalyze Deployment of Technologies to Reduce U.S. Dependence on Oil as Energy Resource
WASHINGTON–(BUSINESS WIRE)–The Freedom Prize Foundation and the U.S. Department of Energy (DOE) today unveiled the Freedom Prize, the first competition of its kind that will direct more than $4 million to reward and encourage efforts to reduce U.S. dependence on foreign oil and enhance the nation’s security, economic prosperity and health.
The Freedom Prize Foundation also announced the primary categories for the awards, and introduced its Advisory Council, a top-notch group of energy, environmental, and public sector experts that will help guide the development of the Freedom Prize. Joining the Freedom Prize Foundation and the DOE for today’s announcement on Capitol Hill are U.S. Senator Jeff Bingaman (D-New Mexico), Chair of the Energy and Natural Resources Committee, Senator Pete Domenici (R-New Mexico), ranking member of the committee, and Assistant Secretary Andy Karsner (DOE Energy Efficiency and Renewable Energy). The Freedom Prize was established by the Energy Policy Act of 2005 which authorized the DOE to support the Freedom Prizes.
“Our reliance on oil poses a significant risk to our nation’s security, economy and health,” said Freedom Prize Chairman and co-founder Jack Hidary. “It doesn’t have to be this way. The Freedom Prize will spur the deployment of existing technologies and policies that reduce our dependency on oil today. We applaud the work of U.S. Senators Bingaman and Pete Domenici, Assistant Secretary Andy Karsner and the many others that make the Freedom Prize a reality.”
“Our dependence on foreign oil is a serious problem that poses significant national security, environmental, and economic risks and only through innovation and technological advancements will we solve this problem,” Department of Energy Assistant Secretary of Energy Efficiency and Renewable Energy Andy Karsner said. “We want to act as a catalyst to spur the private sector’s ability to incentivize innovative solutions and this is just what the Freedom Prize will do — introduce significant, disruptive and durable ways to address our addiction to oil and confront the serious challenge of global climate change.”
The Freedom Prizes of $500,000 – $1 million will be awarded for innovative deployment of existing technologies in five broad categories which include industry, military, schools, government and community. Final guidelines and application for the Freedom Prizes will be developed in consultation with the Freedom Prize Foundation Advisory Board and the Freedom Prize Advisory Council and are expected to be released in the Fall of 2008. The Freedom Prize disbursements are scheduled to begin in 2009 and candidates will be able to apply at www.freedomprize.org.
“Breaking America’s reliance on oil requires groundbreaking scientific advancement combined with out-of-the box thinking,” said Senator Jeff Bingaman, Chairman of the Senate Energy and Natural Resources Committee. “The Freedom Prize represents a terrific new way to reward the best ideas and strategies from across our great nation to solve our energy and environmental challenges and I am proud to have supported this important effort in the United States Senate.”
Facts about America’s oil use:
- The U.S. remains by far the world’s largest oil consumer and has declining domestic production as we import more than 60% of our oil and consume 21+ million barrels of oil every day.
- The U.S. borrows over $4 billion per week to finance our consumption of oil, and oil imports account for one-quarter of America’s trade deficit.
- The U.S. accounts for 25% of world oil consumption yet holds just under 4% of world oil reserves.
- More than 66% of U.S. oil consumption is used for transportation, and transportation emissions are a primary source of particulate matter and pollution in major cities. In fact, the U.S. Centers for Disease Control blames particulate matter from transportation for $38 – $47 billion in health problems annually.
About The Freedom Prize
The Freedom Prizes are cash awards totaling more than $4 million for innovative, near-term applications of existing oil displacement technologies and strategies in America. The Freedom Prize Foundation was co-founded by Jack Hidary and Josh Becker. The Freedom Prize is administered by Freedom Prize Foundation, a nonprofit, nonpartisan organization dedicated to reducing the nation’s dependence on oil. www.freedomprize.org.
Source: http://www.businesswire.com/portal/site/google/?ndmViewId=news_view&newsId=20080626005587&newsLang=en
June 26, 2008, 11:12 am
Posted by Keith Johnson
Oil at $135? That was just the opening skirmish in the “peak oil” wars. The latest smart money? $200 oil in 2010, with gasoline at $7 a gallon. And that is going to turn Americans into car-shunning Europeans once and for all—poor Americans, at least.
That’s the latest gloomy forecast from Jeff Rubin at Canadian brokerage CIBC World Markets, who just a few months ago figured $200 oil would be a thing of the distant future—like 2012.
Attention-grabber (CIBC)
Mr. Rubin laughs off recent attempts to take the steam out of global oil markets. Saudi production promises of 200,000 barrels a day doesn’t dent the 4 million barrel-per-day decline from aging fields every year, for starters. And it will just be “gobbled up” by increasing domestic consumption in Saudi Arabia, like other oil-producing countries that subsidize fuel.
So what about China’s flirtation with market reality by unwinding some fuel subsidies? No luck in curbing demand or prices, either. Not only does China’s recent move translate into $3.25 a gallon gas—still a steal, relatively speaking—it’s given fresh legs to beleaguered Chinese refiners who’ve been operating in the red, thanks to Chinese price controls. So now they are producing even more gasoline and fueling even more cars than they were before. The upshot?
Over the next four years, we are likely to witness the greatest mass exodus of vehicles off America’s highways in history. By 2012, there should be some 10 million fewer vehicles on American roadways than there are today—a decline that dwarfs all previous adjustments including those during the two OPEC oil shocks.
And who will be parking their cars? The 57 million American households that have both cars and access to something resembling public transit. Gasoline at $7 begins to approach prices Europeans have paid for years, meaning that chunk of America “will start to act more and more like Europeans,” Mr. Rubin says. Not soccer moms in a minivan—soccer fans, searching for tokens:
Our analysis suggests that about half of the number of cars coming off the road in the next four years will be from low income households who have access to public transit. At their current driving habits, filling up the tank will have risen from about 7% of their income to 20%, an increase that will see many start taking the bus.
Gas prices already appear to be reshaping suburbia. But what Mr. Rubin is predicting is a far bigger shock to the American system. Europe has had decades to develop a society based on expensive energy. What will happen if Americans suddenly are forced to shoulder European-style energy prices — but without the European-style society to cope with them?
Permalink | Trackback URL: http://blogs.wsj.com/environmentalcapital/2008/06/26/oil-shock-analyst-predicts-7-gas-mass-exodus-of-us-cars/trackback/
Source: http://blogs.wsj.com/environmentalcapital/2008/06/26/oil-shock-analyst-predicts-7-gas-mass-exodus-of-us-cars/
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