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In Pasadena, CalStart Acts As Model For Making Green Tech A Reality

Paresh Dave |
January 24, 2011 | 12:15 a.m. PST

Executive Producer

The year 1992 was the prehistoric era for green technology, Fred Silver says, making 2008 the beginning of a boom era.

The question now is how should growth be sustained and further fueled in an industry that Democratic politicians, business leaders and academics say is poised to be lucrative for pocketbooks and the environment.

A Pasadena-based organization of nearly 140 businesses across the nation, known as CalStart, embodies just the type of innovation, research, development and collaboration between competitors that President Barack Obama will demand become commonplace in his State of the Union speech on Tuesday night.

Early indications, based on a YouTube video the president released over the weekend and White House press briefings last week, suggest that Obama will ask Congress to approve a new round of funding in the coming months to support businesses and universities, which are exploring ways to make everything from our microwaves to cars become more energy-efficient.

In 1992, with the help of $6 million in state and federal grants, a nonprofit consortium of companies formed CalStart in hopes of developing a green transportation technology sector in California. To convince businesses and people to care about the environment in those “prehistoric times” was extremely hard, Silver, now a vice president at CalStart, said.

California's green technology sector saw three times as much job growth in 2008 as the rest of the workforce, according to a report released Jan. 19 by nonpartisan public policy research group Next 10 (a California-based group whose standards for the report are considered more stringent than most other workforce composition evaluations). The year 2008 is the most recent full year of reviewable state employment data.

CalStart continues to rely on government grants for a quarter of its funding for a couple dozen employees across three offices, deriving the rest from its members.

The group brings together the likes of fuel-makers and truck-builders with the utility companies, military units, transit agencies and shipping companies that eventually put those vehicles into use. CalStart creates working groups to reduce the cost of vehicles by building them to the needs of the customers from the very beginning and pooling similar buyers together. The group's unique in that it doesn't push one technology or fuel over others.

The nation receives most of its oil from overseas (Californians get nearly half their oil from Saudi Arabia and Iraq, for instance), and most Americans favor regulation of carbon emissions that harm the environment.

Experts say putting a fair price on carbon is the best way to resolve those two issues. But with Republicans in control of the House of Representatives, the type of cap-and-trade legislation Obama has sought to put a price tag on carbon is even farther from becoming law than it was a year ago.

The work-around is investment in companies and institutions that can find ways to build more energy-efficient products and to deliver a greater share of the energy they consume from renewable sources such as the wind, the sun and natural substances like algae, hydrogen and soil.

CalStart plans to release Tuesday a blue-ribbon panel report that calls for just that type of increased investment in clean transportation technologies, creating jobs and improving the environment.

Working in concert with the U.S. Army, CalStart has generated a home-grown market for hybrid trucks. At a conference last year, CalStart CEO John Boesel boasted that in 2000, there was not a single hybrid truck in development. By the end of the decade, every major truck maker was selling or designing one.

“It's all from funding that came from the federal level,” Silver said in a interview at CalStart's brick office building a few blocks away from Pasadena City College. “The market we've forged for hybrid trucks is pure-American, and it's about to take off from 2,500 trucks this year to 20,000 trucks in 2020.”

America—namely Ford and General Motors—fell behind in the market for hybrid passenger cars with Honda and Toyota leading the way from across the Pacific. Silver said CalStart was instrumental in preventing the same from happening in the commercial truck market.

Alternative fuel buses have also become a staple because of CalStart, Silver said. One out of every two new buses sold in America runs on a fuel other than diesel. The next market CalStart would like to see explode is hybrid-fuel construction equipment.

Silver said sustaining public sector investment in such projects is the biggest key going forward. CalStart helped push for the passage of AB 118, a state measure that increased a handful of fees by a few dollars, including the California vehicle registration fee by $3, to build an annual pot of $200 million for building alternative fuel vehicles. Overall state funding stands to decline in the coming years though. That's one reason the group has called for reviewing the effectiveness of the state's gasoline tax, which has sat at 18-cent mark since 1993.

Silver said CalStart isn't about to lobby the government to put fines on carbon polluters, but it will continue to lobby the government for money to fund programs sought by their members. A group fuel cell makers and bus builders in CalStart banded together in 2006 to lobby for a $49 million federal fund for hydrogen fuel cell buses; a third of that money came to California companies.

Vision Motor joined CalStart at the beginning of the year, hoping the group would help it eventually get the billion-dollar contract for a project to eliminate all carbon emissions from freight trucks traveling out of the Port of Long Beach on the Interstate 710 freeway. Rudy Tapia, the vice president of business development for the manufacturer of zero emission hydrogen fuel cell and electric powered vehicles, said CalStart is the perfect forum to meet decision-makers and stakeholders.

At telecommunications provider Verizon, Ken McKenney is in charge of making the company's fleet of vehicles across the nation more sustainable.

“It's given us the opportunity to steer the industry,” McKenney said of CalStart. “It's helped move a whole industry of hybrid vehicles into the real world. It's a dynamic group taking on a monumental task.”

He credited CalStart for giving smaller companies more clout than they would have alone by teaming them up with the Verizon's of the world.

Take utility companies from a handful of cities across California from gigantic Los Angeles to tiny little Alpine. They all want to replace their fleet of diesel-burning cherry-picker trucks with hybrid trucks. They meet with CalStart experts and iron out the exact specifications they desire in a hybrid truck. They decide collectively they will pay a 15 percent premium for a truck that has 40 percent better fuel economy. CalStart orders 50 trucks—better value for all involved than a couple of orders of 10 trucks—and each utility company gets as many of the trucks as they need.

Unsolved problems remain, however. Mid-size trucks, military equipment and construction vehicles still have a ways to go before becoming as efficient as McKenney or others in the industries would want them to be.

“Getting everybody to jump in the pool simultaneously is very hard,” Silver said. “We're stuck on petroleum and it's very hard to get off of it.”

Things aren't looking up for Obama either. House Energy and Commerce Committee Chairman Fred Upton (R-Mich.) is exploring ways to both block the Environmental Protection Agency from making any rules related to carbon emissions and delay any regulations they have put in place from going into effect. Groups on the other side of the aisle have prodded Obama to mount a defense of the EPA's power under the Clean Air and Water Acts in his speech Tuesday night.

“We don't really see any success stories concerning the environment in Obama's first two years,” said Ben Lieberman, a senior fellow in environmental policy at the Competitive Enterprise Institute, a libertarian think tank promoting free market policies. “What we've seen are regulations that are more problematic because they would cause more economic harm than environmental good.”

All the while, the Department of Energy continues to direct money to academics and companies to make life more efficient. Unfortunately for many of them, including dozens of professors at the California Institute of Technology in Pasadena, the lack of a federal spending bill for 2011 means they aren't sure about how much funding they will actually receive this year.

Other projects, such as one to build a massive solar energy park in the middle of the California desert, have been caught in the crosshairs of several lawsuits.

“Nothing seems to be quite green enough these days,” Lieberman said. “It's an environmentally-conscious wing that has gone amok.”

Jungie Zhang, an assistant professor of environmental economics at the University of California, San Diego, said it's impossible to put an explicit price on carbon without living in an ideal world.

He proposed investment in widening a smart grid system and developing both products and policies that force less energy consumption. Those two measures combined would be better than a patchwork of second-best solutions the nation currently employs, Zhang said.

He does support government subsidies like the ones CalStart members depend on, but he said the problem is the continued subsidies given to coal and oil companies.

“If we give one share of subsidies to dirty energy companies,” Zhang said, “then we have to give two shares of subsidies to wind and solar companies to make them more attractive to energy purchasers.”

Back at CalStart, Silver says the group is a model for how government funds can be leveraged efficiently.

“We've built an industry and created American jobs," he said. "But we still need those innovation funds to do that.”

For more from Neon Tommy's special series examining Obama at the midpoint of his first term, click here.

Reach executive producer Paresh Dave here. Follow him on Twitter: @peard33.



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