Waste and Opportunity (or how to sharpen your saw)

Cincinnati is a wasteful city. This is the single most important fact in understanding our local economy.

What does it mean to say that Cincinnati is a wasteful city? Let's look at a couple of basic examples:

• the average car in Cincinnati and throughout the U.S. gets about 24 mpg, while the average car in Japan gets about 48 mpg, so half of each dollar we spend on gasoline is wasted.
• the average building in Cincinnati and throughout the U.S. can reduce its energy usage by more than 30% using energy efficiency improvements that pay for themselves in 3 years or less, without changing the quality of life of the building's occupants, so 30% of each utility dollar is wasted.
• food consumed in Cincinnati travels an average of 1500 miles from farm to table, while fertile land in our own community lies vacant.
• Rumpke landfill receives 2 million tons of material each year, and 60 percent of that is material for which there are established commodity markets with buyers ready and willing to pay a good price. More than a million tons per year of valuable natural resources are being wasted.

Now that we know what it means to say that Cincinnati is wasteful, why is that fact important?

Cincinnati's economy, like that of the nation and the world, is currently in the doldrums. People are struggling to understand: how to re-energize the economy; how to make the economy sustainable for the foreseeable future; and how to create an economy that can support an adequate standard of living for all of our City's inhabitants. These are the right questions to be asking, and the answers lie in eliminating waste.

The global economic slowdown started at about the same time that oil hit $140/barrel. Coincidence? Consider that every dollar we spend on petroleum is a dollar that leaves Cincinnati for some other part of the world; that every dollar we spend on food is a dollar that leaves Cincinnati for some other part of the world; and that every ton of natural resources that we bury in the landfill represents destruction of our own wealth. Is it any wonder that Cincinnati has not enough dollars to meet its needs, and that Cincinnati's economy and that of the whole nation needs massive infusions of cash (federal stimulus) to keep functioning?

Is now the right time to try to eliminate the waste in our economy. The story of the woodcutter comes to mind. This woodcutter had a contract to saw 10 logs per day, and he was very happy because he could saw 10 logs in 6 hours. But as time went by, the woodcutter's saw began to dull, and it took him 7 hours, then 8, to saw his 10 logs per day. Before long, the woodcutter was working feverishly from sun up to sun down trying desperately to fulfill his contract and deliver 10 logs per day. A friend asked him why he didn't sharpen his saw. Without looking up, the desperate woodcutter replied that he was far too busy to stop for even a moment, and went on working with his dull saw.

Some would argue that a recession is no time to worry about energy efficiency investments, urban gardens, or other extravagances. That perspective overlooks the fact that our inefficiencies are an important cause of our economic problems, and that eliminating waste is the best hope for enabling economic recovery. Like the woodcutter, if we make a small investment in improving the efficiency of our process, there is good reason to be optimistic about the future. If we decide that hard times are the wrong time to change, we can be sure that our situation will continue to gradually worsen.

Larry Falkin
Director, City of Cincinnati Office of Environmental Quality
larry.falkin@cincinnati-oh.gov


Hear Lt. Governor Lee Fisher and learn from representatives from leading local Company's on how to sharpen your saw. www.3esummitcincinnati.org/ October 2nd 8am-noon at the Duke Energy Center

Advanced Energy Fund Ohio Job stimulus program

The $150 million advanced energy funding (over three years) seeks to increase the development, production and use of advanced energy technologies in the state, and is divided into two parts:

• $66 million for clean coal technology projects administered through the Ohio Air Quality Development Authority’s (OAQDA) Ohio Coal Development Office (OCDO) (reviewed by staff, outside reviewers and the Technical Advisory Committee and approved by OAQDA); and
• $84 million for non-coal-related projects in three $28 million annual appropriations administered by OAQDA (reviewed by staff and outside reviewers, the Development Finance Advisory Council, approved by OAQDA and brought before Controlling Board for final approval).

Award Ranges
Grants may range from approximately $50,000 to $250,000 based on the size and scope of the entire project and the jobs, investment and other impacts outlined below in the Guiding Principles section. Projects presenting outstanding value propositions for Ohio may be considered for significantly higher awards.

Loans may range from approximately $1 million to $2 million. For highly qualified applicants, loans could be structured a number of ways including below market rates, subordinate collateralized positions with participating financial institutions and/or varying principal payments for a specified period of time.

Eligible Projects

• Non-coal
  · Renewable energy resources including energy derived from sources including solar, wind, hydroelectric, geothermal, certain fuels derived from solid wastes
  · Fuel cells
  · Increased efficiency in electricity generation without additional carbon dioxide emissions
  · Advanced nuclear energy technology
  · Advanced solid waste or construction and demolition debris conversion technologies resulting in measurable greenhouse gas emissions reductions
  · Any technologies, products, activities or management practices or strategies that reduce or support the reduction of energy consumption or support the production of clean renewable energy.
  Clean Coal
  · Improved retrofit technologies applicable to existing coal-fired generating units to increase generating efficiency in order to significantly reduce carbon dioxide emissions, to reduce emissions of conventional pollutants to negligible levels, and to develop methods for capture and sequestration of carbon dioxide;
  · Technologies to upgrade Ohio’s existing fleet of coal-fired electric generation plants;
  · Coal technologies capable of cost-effectively supplying the energy needs of Ohio’s industrial complex;
  · Development/deployment of advanced coal based power and fuel producing systems (e.g., IGCC, oxy-combustion systems, ultra-supercritical systems, chemical looping systems, etc.);
  · Cost effective carbon dioxide capture and sequestration through improving capture technology, surveying and cataloging Ohio carbon dioxide reservoirs, and development of carbon dioxide transport mechanisms;
  · Economic and effective mercury capture technologies;
  · High volume fly ash and flue gas desulfurization byproduct utilization in mine remediation/reclamation; and
  · Other projects certified by the OCDO Director as mission critical to the program’s Strategic Plan.
  Guiding Principles
  
• Workforce Impact: OAQDA will place high priority on new job creation and, to a lesser extent, on job retention.
• Full-time Permanent Jobs: certain projects will directly create new jobs, as well as indirectly creating the opportunity for additional permanent jobs through an expanding supply chain or the formation of the core of a potential industry cluster.
• Construction Jobs: a valuable contribution to short term economic recovery with value added to the extent these jobs engender learning and applying new skills that will be applicable to future projects. While the OAQDA understands that it may be challenging for an applicant to commit to a certain number of construction jobs, we recognize their importance.
• Economic Impact of Jobs: higher priority may be given to jobs providing compensation at or above sector or regional averages.
• Advancement Opportunities: new job creation that leads to career paths of increasing skills and opportunity will be given consideration. The degree to which new jobs open the doors of opportunity to currently unemployed or underemployed Ohioans will also be factored into the award decisions

Leverage: although the job stimulus package makes a significant amount of funds available for advanced energy projects, the OAQDA recognizes that the amount is relatively small within the context of the size and diversity of the advanced energy industry. Accordingly, it is essential that these funds significantly leverage the investment from other private and public sources.
Private Investment: when analyzing the total project, the amount of private investment (equity or debt) should at least match and really should exceed the state's involvement and preference will be given to applicants that demonstrate high leveraging of the state's investment.
Public Investment: in addition to private sector investment, support from other public (or nongovernmental organizational) sources further demonstrates the viability of the project. The public investment could include federal, other state and local commitments to the project.
Return on Public Investment: projects supported by public funds in earlier stages of development will be given added consideration. Job stimulus funds should clearly advance any earlier public investment to the commercialization stage, thereby improving the return on the total public investment package.

Coordination: projects that take advantage of other components of the job stimulus program or additional state incentives will be given added consideration. The advanced energy component of the job stimulus package is not an isolated, stand alone program; projects should demonstrate careful exploration of how other components can contribute, particularly the Choose Ohio First Co-op/Internship Program. Increasing the value of the project by active exploration of the more traditional economic development incentives offered by the state (including those at the Ohio Department of Development and the OAQDA) will also be evaluated.

Tipping Points: the OAQDA recognizes that many advanced energy projects carry significant price tags. It will be essential for applicants to demonstrate that the state investment makes a critical and substantial difference to the project and/or the industry.

• Progress in Development: will the state investment make possible a technology advance from pilot to demonstration stage, or preferably from demonstration to the commercial stage?
• Project Viability: will the state investment provide a necessary "bridge" for a project from one stage of private investment to the next (the effectiveness of the "bridge" must be clearly measurable with a significant degree of success certainty)?
• Project Expansion and/or Location: will the state investment ensure that subsequent phases of job creating production occur in Ohio or that expansion opportunities are realized in Ohio?
• Break-through Potential: will the state investment support a key activity of early stage commercialization that advances a potentially disruptive technology significantly? Such a role will be inherently higher risk for the state and would require clear documentation of the potential advance and its impact on Ohio's economic development goals.

Strategic Positioning: in addition to furthering investment in the advanced energy industry, the job stimulus program seeks to strengthen Ohio's manufacturing base and prepare for the industries and products of the future.

• Attracting New Investment: projects capable of bringing new commercially viable energy companies and technologies to Ohio, perhaps original equipment manufacturers of those technologies.
• Building upon Manufacturing Strength: projects that create new jobs and investments that can assist current Ohio manufacturers to retool, retrain and/or expand to become more competitive members of the local, regional and global supply chain for advanced energy technologies.
• Reclaiming Ohio's Heritage of Innovation: projects that can help Ohio innovators and entrepreneurs advance technology development toward commercialization and provide the necessary incentive for that commercialization to occur in Ohio.
• Preparing Ohio's Workforce for the Future: projects with the potential to provide good paying jobs to both Ohio's current and future workforce provide the greatest return on state investment; projects should advance our ability to retain and retrain Ohio workers.
• Expand Opportunities to New Groups/Areas: projects that include groups or regions not traditionally seen as part of advanced energy technology.