UK has enough shale gas for a millenium

February 9, 2013

Shale gas reserve estimates keep on increasing. We have the peculiar situation where Russia and some of the large oil companies attack shale gas only because some of their existing business may be threatened. But they all also have strong positions with shale gas. But what is clear is that “peak gas” has been postponed by several hundred years and there is no energy crisis in sight.

Peak Gas will never come

The Times has seen advance copies of the British Geological Survey’s new estimates of shale gas reserves in the UK:

Britain could have enough shale gas to heat every home for 1,500 years, according to new estimates that suggest reserves are 200 times greater than experts previously believed. The British Geological Survey is understood to have increased dramatically its official estimate of the amount of shale gas to between 1,300 trillion and 1,700 trillion cubic feet, dwarfing its previous estimate of 5.3 trillion cubic feet.

According to GWPF:

According to industry sources, the revised estimates will be published by the Government next month, fuelling hopes that new “fracking” techniques to capture trapped resources will result in cheaper energy bills.

It is thought that it will be technically possible to recover up to a fifth of this gas, making Britain’s shale rocks potentially as bountiful as those in the US. Experts stressed that it was still much too early to say how much of the gas it would be economic to get out of the ground to heat homes and help to generate electricity. 

In an interview with The Times today, Ed Davey, the Energy and Climate Change Secretary, tries to downplay hopes of a shale gas glut in the UK pushing down household heating bills, which are at record highs. “It is not the golden goose. The experts are clear that they do not expect this to have a major impact on the gas price.”

The UK Onshore Operators Group (UKOOG), which also represents other onshore oil and gas producers, is aiming to win over public opinion about the shale gas industry, in particular by countering claims that the process of fracking poses an environmental menace.

The shale gas industry is gearing up for a year of intense activity after the Government lifted an 18-month moratorium on fracking in December. The ban was imposed in May 2011 after Cuadrilla Resources, the explorer backed by Lord Browne of Madingley, the former chief executive of BP, set off dozens of earth tremors when it began fracking on sites near Blackpool. The company intends to resume fracking this summer to find out more about the size and commercial potential of its reserves.

Other explorers sitting on vast shale gas deposits will also apply for fracking licences soon. Government officials are preparing to hold an onshore oil and gas licensing round this year which could result in more parts of the UK being opened up for shale exploration.

 

Noted in Passing 9th February 2013

February 9, 2013

A weekly post on things that were interesting or which I would have liked to have blogged about …….

Science and Behaviour

The Fonseca Bust

Hair-dos and archaeology come together in an intriguing article in the Wall Street Journal which shows that there is a logic to hair styling.

MIT research suggests that India joined with Asia 10 million years later than previously thought while Caltech research indicates that that iron melts at higher temperatures than has been reported in the past and that the earth’s core more be a trifle warmer than has been assumed before.

257,885,1611, which is also the 48th  Mersenne prime, was discovered on the computer of Dr. Curtis Cooper, a professor at the University of Central Missouri.

Global warming hard-liners are having to accept that the world isn’t warming as quickly as their catastrophe theories suggest. But they are not yet giving up on their religious beliefs about the anthropogenic causes of warming. But some more of the alarmism around global warming has to be recanted or at least toned down as new studies show that the Amazon rain forest is far more resilient to climate change than the doomsayers would have us believe.  Back in 1975 when the catastrophe theory of the day was the imminent cooling of the world, there were suggestions that the Arctic should be melted to try to get the world to warm up!!

Apparently certain certain volatile organic gases can promote cloud formation in a way  never considered before by atmospheric scientists. So much for “settled” climate science.

Pain and itching are both sensations which have a protective purpose and are linked to survival. Itching warns of the presence of irritants and it may be that there are a specific set of nerve cells that signal itch but not pain.

Flocking starlings strike an optimal balance between the work of responding to social cues from their neighbors and the need to conserve energy. They do this by coordinating with their seven nearest neighbors and form their characteristic flocks with the least effort.

Sweden is not immune to discrimination against job-seekers who have “foreign” names.

Amherst College seems to be taking sexual violence on campus seriously……

Engineering and Technology

The oil shale boom is having unexpected benefits even for rural banking in addition to changing the face of energy supplies.

The origin of the battery fire that occurred on a Japan Airlines (JAL) 787 at Boston Logan Airport in January has been identified as a single cell in a lithium-ion battery cell. Now the causes of the initiating short-circuit have to be found.

Meanwhile, Boeing has started telling its customers to expect serious delivery delays for the Boeing 787 as far out as this summer.

Bad Science

A mediocre academic, Brett Mills, seeks publicity by claiming that David Attenborough is minimising the prevalence of gay animals!

Earthworms are long revered for their beneficial role in soil fertility, but with the good comes the bad: they also increase greenhouse gas emissions from soils.

The Japanese Education Ministry is eyeing stricter penalties for researchers who misuse public research funds or commit fraud.

Last week, a California woman filed a lawsuit against Pfizer, the maker of Zoloft, alleging that Zoloft works no better than placebo, that Pfizer knew it, and that the company has run a systematic campaign to deceive doctors and the public in order to continue selling the drug.

 

German Education Minister to appeal against loss of her Doctorate

February 6, 2013
Bundesministerin Dr. Annette Schavan

Bundesministerin Dr. Annette Schavan (Photo credit: AndreasSchepers)

Update! 9th February

Annette Schavan has resigned.

==============

Dusseldorf University has not taken long after opening formal revocation proceedings to strip Annette Schavan – the German Minister for Education and Research- of her Doctorate for plagiarism.

BBC: 

The University of Duesseldorf’s philosophy faculty decided on Tuesday that she had carried out “a deliberate deception through plagiarism”.

The minister has denied the claims and said she will appeal.

An earlier plagiarism row brought an end to the political career of Germany’s defence minister in 2011.

Large parts of Karl-Theodor zu Guttenberg’s 2006 legal dissertations were found by Bayreuth University to have been copied and he stood down before it issued its damning verdict in May 2011.

Using the same words as Duesseldorf’s Heinrich Heine University, it concluded that he had “deliberately deceived”.

When Ms Schavan became the second minister in Chancellor Angela Merkel’s government to be accused of copying her doctorate, in this case by an anonymous blogger, she insisted she had never “knowingly falsely cited any sources” and promised to respond to the accusations.

But the faculty committee concluded that her work, which dealt with the formation of conscience, included a “substantial number of unaccredited direct quotes from other texts”.

In a statement declaring the doctorate invalid and withdrawing it from Ms Schavan, the faculty head Bruno Bleckmann said they had “decided by secret ballot, by 12 votes to two, with one abstention”. 

The minister herself, 57, was said to be on a five-day education and science co-operation trip to South Africa.. Education minister since 2005, she is described as a close colleague of Chancellor Merkel.

Her lawyers reportedly rejected the university’s ruling and said Ms Schavan would appeal.

When the university announced its inquiry, she said she had no intention of standing down.

But the investigation into one of Chancellor Merkel’s closest allies is seen as potentially awkward months before Germans vote in federal elections.

The popular German newspaper Bild said the news was a bitter blow to the chancellor, and wondered whether she would need to find a new education minister at the start of her election campaign.

Related:

Two years of self-imposed exile for zu Guttenberg

Good grief! “Unfriending” leads to avoidance in real life

February 5, 2013

This may not be bad science but it could be a gross exaggeration of its importance to call it trivial science. A study based on 582 responses gathered by Twitter no less! Unfriending someone on social media can apparently lead to real life avoidance. Almost a profound finding.

How does such nonsense get funded? And why does it ever get published? and reported? But it got presented at a Conference in Hawaii. All is explained.

Science Daily:

Unfriending someone on Facebook may be as easy as clicking a button, but a new study from the University of Colorado Denver shows the repercussions often reach far beyond cyberspace.

People think social networks are just for fun,” said study author Christopher Sibona, a doctoral student in the Computer Science and Information Systems program at the University of Colorado Denver Business School. “But in fact what you do on those sites can have real world consequences.”

Sibona found that 40 percent of people surveyed said they would avoid in real life anyone who unfriended them on Facebook. Some 50 percent said they would not avoid the person and the remaining 10 percent were unsure. Women said they would avoid contact more than men.

At this point I had to throw up.

This rubbish comes out of the University of Colorado department of Computer Science and Information Systems.

More shame to them.

 

Altruism among plants? or do they mean nepotism?

February 2, 2013

There is a suggestion that plants can be “altruistic”  but requires a rather curious definition of altruism as being only when the benefactor is related to the beneficiary. I would have thought that this was a case of nepotism among plants rather than altruism. It does not mirror the altruism observed among animals which are not related.

The research may be fine for all I know but the press release hypes a minor finding and the subsequent publicity is weird.

Colorado University Press Release:

… a study led by the University of Colorado Boulder suggests some plants are altruistic too.

The researchers looked at corn, in which each fertilized seed contained two “siblings” — an embryo and a corresponding bit of tissue known as endosperm that feeds the embryo as the seed grows, said CU-Boulder Professor Pamela Diggle. They compared the growth and behavior of the embryos and endosperm in seeds sharing the same mother and father with the growth and behavior of embryos and endosperm that had genetically different parents.

“The results indicated embryos with the same mother and father as the endosperm in their seed weighed significantly more than embryos with the same mother but a different father,” said Diggle, a faculty member in CU-Boulder’s ecology and evolutionary biology department. “We found that endosperm that does not share the same father as the embryo does not hand over as much food — it appears to be acting less cooperatively.”

A paper on the subject was published during the week of Jan. 21 in the Proceedings of the National Academy of Sciences. Co-authors on the study included Chi-Chih Wu, a CU-Boulder doctoral student in the ecology and evolutionary biology department and Professor William “Ned” Friedman, a professor at Harvard University who helped conduct research on the project while a faculty member at CU-Boulder.

Diggle said it is fairly clear from previous research that plants can preferentially withhold nutrients from inferior offspring when resources are limited. “Our study is the first to specifically test the idea of cooperation among siblings in plants.”

“One of the most fundamental laws of nature is that if you are going to be an altruist, give it up to your closest relatives,” said Friedman. “Altruism only evolves if the benefactor is a close relative of the beneficiary. When the endosperm gives all of its food to the embryo and then dies, it doesn’t get more altruistic than that.”

Science Daily merely reproduces the press release: Some Plants Are Altruistic, Too, New Study Suggests

 

Noted in Passing 2nd February 2013

February 2, 2013

A weekly post on things that were interesting or which I would have liked to have blogged about …….

Science and Behaviour

GUINEA WORM--THIS ONE copy 2

Exercitationes de Vena Medinensis et de Vermiculis capillaribus infantium by G. H. Velschius (1674)

It seems that human infestation by guinea worms is sharply down pointing to the success of the program to eradicate them. Carl Zimmer writes an obituary for this creature which will not be missed (by humans) if it becomes extinct. But why is it that the intentional eradication of species inimical to man is perfectly OK, but the demise of other species which have failed to adapt and can no longer compete is considered a catastrophic loss of bio-diversity? In genetic survival terms the guinea worm or the mosquito might well be more important than tigers or panda bears.

There are those who would swear that the science of climate is well understood and settled. But it seems we know very little about clouds indeed and that bacteria which survive in the upper atmosphere could be one source for the nucleation of clouds.  In the same vein, it seems that irrigation in one area can cause storms elsewhere. A new study shows that agricultural irrigation in California’s Central Valley doubles the amount of water vapor pumped into the atmosphere, ratcheting up rainfall and powerful monsoons across the interior Southwest.

The British Museum and the Smithsonian teamed up to prove that their two crystal skulls, purportedly made by Aztecs in Mexico prior to Columbus’ arrival. are actually fakes. 

Kim Ryholt shows that in the ancient Egyptian city Tebtunis, 2,200 years ago, people voluntarily entered into slave contracts with the local temple for all eternity and they even paid a monthly fee for the privilege.

New findings suggest that free-ranging cats are likely the single greatest source of anthropogenic mortality for US birds and mammals.

Dienekes suggests that even with a generations long selective breeding program to select for Neanderthal genes, achieving a 100% Neandertal might be impossible.

Engineering and Technology

NASA will use the International Space Station that to test expandable space habitat technologyand will test a Bigelow Expandable Activity Module (BEAM), which is scheduled to arrive at the space station in 2015 for a two-year technology demonstration.

As they become easier to acquire and use, one of the obvious benefits of 3D printers is their ability to distribute the tools of production and manufacturing to the masses. But what they’re used to produce can create legal, regulatory, and even ethical concerns.

The PowerBuoy is a “smart” ocean-going buoy that uses piston-like motion in the float relative to its stationary spar to mechanically convert energy into electricity as it rides the waves.

Bad Science

The status of Harvard College’s investigation of student cheating has been distributed to faculty, staff and students by Arts and Science Faculty Dean Michael D. Smith.

Academics at the Institute for the Study of Coherence and Emergence are at war with an anthropologist at University of California at Berkeley and alleging that he stole ideas. Needless to say the UC Berkeley investigation report exonerates their own.

The Commonwealth Scientific and Industrial Research Organisation (CSIRO), Australia’s national science agency, may face further scrutiny into accusations of bullying and harassment of scientists and other employees.

Funding agencies may be paying out duplicate grants, according to an analysis by Harold R. Garner, Lauren J. McIver and Michael B. Waitzkin.

Forbes dumps on the unfortunate Lisa Jackson.

With the rapid growth of misconduct cases, scientific rehabilitation may have to become a necessary tool for research-integrity offices.

Swedish justice system in free fall as serial killer who never was is cleared

February 1, 2013

The Swedish justice system not only looks ridiculous today but also apparently deals with something other than justice.

As a film script it would not be considered even for a C-movie. But the Swedish justice system seems to have conspired and cheated and framed a man as a serial killer for 28 murders and had him convicted and imprisoned for 8 of them. Gullible judges and a conspiracy-ridden prosecution service would seem to be the stars of this circus.

As a comment on the article at The Local puts it:

…..  He was then asked a series of blatantly leading questions, and his ramblings presented to a rather gullible judge as his “confessions”. The prosecution probably only stopped at 28 murder “confessions” because they had run out of unsolved murders that occurred during Mr Quick’s adulthood. One wonders if they considered sub-contracting him out to other countries to clear up their cold-case load too.

The small prosecution team made their careers on this charade, and to this day, have important and well-paid jobs in government, justice and medicine. …..

….. This is a scandal of titanic proportions that brings great shame on Sweden. On top of the Assange case, jurists from other countries must be wondering what on Earth is going on here.

I find the whole case fantastic since I usually associate the Swedish justice system with undue leniency and as requiring an unreasonable level of evidence. Criminals acting in concert have been known to get away even with murder by blaming each other. But this case turns all my perceptions on their heads.

Swedish Wire: A Swedish man long considered Scandinavia’s worst serial killer was formally acquitted Friday of the 1988 murder of a nine-year-old Norwegian girl, a Swedish court said.

Sture Bergwall had in March been granted a new trial for the murder of Therese Johannesen, but the prosecutor decided to drop that case last month due to lack of evidence, effectively acquitting him.

“The prosecutor’s decision to drop the indictment should be the basis for the assessment of this case. In light of that … the acquittal is authorised in accordance with Sture Bergwall’s claim,” court documents read.

Bergwall, who for many years was known as Thomas Quick, is serving a life term in a psychiatric institution after being convicted of eight murders committed between 1976 and 1988.

YahooNews: 

On Friday, a court in northern Sweden granted a retrial for Sture Bergwall in two murder cases from 1976 and 1984, citing doubts over confessions he made in the ’90s but which he has since withdrawn.

Bergwall’s five other murder convictions have already been overturned.

Bergwall, now 62, told AP on Friday that he had lied about the murders “to make myself interesting,” and while being under the influence of heavy medication.

His lawyer Thomas Olsson said that if Bergwall is cleared at the retrials he could be released later this year.

Boeing Dreamliner batteries could be “inherently unsafe” while Airbus says it has a Plan B

February 1, 2013

The fault with the Boeing Dreamliner Batteries/electrical systems has not yet been found. This is not good news for Boeing since the grounding of 50 aircraft continues. Each grounded aircraft poses a potential claim on Boeing for about $2.5 million per month. The delay in finding the fault also correspondingly delays the selection of a “fix” and the deployment of that “fix”. And since some 850 aircraft have been ordered and production has not been stopped, the fix has to be deployed on a large number of aircraft.

In the absence of any identified fault Boeing are continuing to defend the 787 batteries and I read this as Boeing defending both the design of the chosen batteries and their decision to select these for use. They cannot really do anything else since they cannot acknowledge any potential liability while compensation claims are up in the air (or down on the ground may be more appropriate!).

Airbus apparently has developed a Plan B in the event an alternative to lithium-ion batteries must be found for the A350.

Airbus warned about the risks of lithium-ion batteries at a closed meeting of airlines in March 2011, according to a presentation first reported by Reuters this week.

“We identified this fragility at the start of development and we think we resolved it about a year ago,” Bregier said. “Nothing prevents us from going back to a classical plan that we have been studying in parallel.”

But there is a view that the design chosen by Boeing is fundamentally unsound – that the design lends itself to the possibility of thermal runaways with overheating and subsequent fires. If the design itself is flawed and there are better designs available, then Boeing’s decision process which resulted in using a flawed design could be more damaging  than any monetary compensation for the actual groundings. Boeing can ill afford a suggestion that their design or decision process itself is flawed. The current investigation is focused on finding any faults in the units as built and not – yet – on the fundamental design itself.

They can probably absorb the financial hit but my guess is that Boeing will lose considerable ground to the Airbus A350 which could take a long time to recoup.

FlightGlobal: 

The lithium ion batteries installed on the Boeing 787 are inherently unsafe, says Elon Musk, founder of SpaceX and owner of electric car maker Tesla.

“Unfortunately, the pack architecture supplied to Boeing is inherently unsafe,” writes Musk in an email to Flightglobal.

“Large cells without enough space between them to isolate against the cell-to-cell thermal domino effect means it is simply a matter of time before there are more incidents of this nature,” he adds.

Both Boeing and Tesla use batteries fueled by lithium cobalt oxide, which is among the most energy-dense and flammable chemistries of lithium-ion batteries on the market. While Boeing elected to use a battery with a grouping of eight large cells, Tesla’s batteries contain thousands of smaller cells that are independently separated to prevent fire in a single cell from harming the surrounding ones.

“Moreover, when thermal runaway occurs with a big cell, a proportionately larger amount of energy is released and it is very difficult to prevent that energy from then heating up the neighboring cells and causing a domino effect that results in the entire pack catching fire,” says Musk.

…. “They [Boeing] believe they have this under control, although I think there is a fundamental safety issue with the architecture of a pack with large cells,” writes Musk in an email. “It is much harder to maintain an even temperature in a large cell, as the distance from the center of the cell to the edge is much greater, which increases the risk of thermal runaway.” 

Musk’s assessments of battery cells were confirmed by Donald Sadoway, a professor of electrical engineering at the Massachusetts Institute of Technology.

“I would have used the same words,” says Sadoway. “I’m glad someone with such a big reputation put it on the line.”

“He’s engineered [Tesla’s battery] to prevent the domino effect, while Boeing evidently doesn’t have that engineering,” adds Sadoway. ….. 

787 battery graphic

from Boeing

Design News:

The issue of battery cooling has been at the forefront of the Boeing story for a week. Donald Sadoway, the John F. Elliott professor of materials chemistry at MIT who is involved in a battery startup with Bill Gates, told us last week that a forced air cooling system and sensors may be needed to monitor and cool the battery in the event of overheating. Elton Cairns, a professor of chemical and biomolecular engineering at the University of California, Berkeley, and a fuel cell designer for NASA’s Gemini spaceflights, also suggested that an air- or liquid-cooled system would be necessary.

Indian “curry” dates back to 4,500 years ago

January 30, 2013

Curries have come a long way from the proto-curry of the Indus Valley civilization and I am sure our tastes have also evolved. And chillies probably came much later and only in the 16th century.

But I can attest to the fact that curry withdrawal syndrome is a real thing and hits hard if I go more than 3 or 4 days without a fix.

Slate:

The Mystery of Curry

By |Posted Tuesday, Jan. 29, 2013,

Indian chicken jalfrezi curry.

Indian chicken jalfrezi. Photograph by Joe Gough/iStockphoto/Thinkstock.

What is curry? Today, the word describes a bewildering number of spicy vegetable and meat stews from places as far-flung as the Indian subcontinent, the South Pacific, and the Caribbean Islands. There is little agreement about what actually constitutes a curry. And, until recently, how and when curry first appeared was a culinary mystery as well.

The term likely derives from kari, the word for sauce in Tamil, a South-Indian language. Perplexed by that region’s wide variety of savory dishes, 17th-century British traders lumped them all under the term curry.  A curry, as the Brits defined it, might be a mélange of onion, ginger, turmeric, garlic, pepper, chilies, coriander, cumin, and other spices cooked with shellfish, meat, or vegetables.

Those curries, like the curries we know today, were the byproduct of more than a millennium of trade between the Indian subcontinent and other parts of Asia, which provided new ingredients to spice up traditional Indian stews. After the year 1000, Muslims brought their own cooking traditions from the west, including heavy use of meat, while Indian traders carried home new and exotic spices like cloves from Southeast Asia. And when the Portuguese built up their trading centers on the west coast of India in the 16th century, they threw chilies from the New World into the pot. (Your spicy vindaloo may sound like Hindi, but actually the word derives from the Portuguese terms for its original central ingredients: wine and garlic.) 

But the original curry predates Europeans’ presence in India by about 4,000 years. Villagers living at the height of the Indus civilization used three key curry ingredients—ginger, garlic, and turmeric—in their cooking. This proto-curry, in fact, was eaten long before Arab, Chinese, Indian, and European traders plied the oceans in the past thousand years.

….. The Indus society began to flourish around the same time that the ancient Egyptians built their pyramids and Mesopotamians constructed the first great cities in today’s Iraq. Though less well known than its more famous cousins to the West, the Indus civilization boasted a half-dozen large and carefully planned urban centers with sophisticated water and sewage systems unmatched until Roman times. During its peak, between 2500 B.C. and 1800 B.C., the Indus dominated a land area larger than either ancient Egypt or Mesopotamia, covering much of today’s Pakistan and most of western India, as far west as the Iranian coast, as far north as Afghanistan, and as far east as the suburbs of New Delhi. But unlike the hieroglyphic and cuneiform writing of the Egyptian and Mesopotamian scribes, the strange symbols left behind by their Indus counterparts has not yet been deciphered by today’s scholars. Deciphering their food traditions has, until recently, been equally challenging.

Archaeologists have long known how to spot some ancient leftovers. The biggest breakthrough came in the 1960s, when excavators began to drop soil from their sites—particularly from places where food likely was prepared—onto mesh screens. The scientists then washed the earth away with water, leaving behind little bits of stone, animal bones, and tiny seeds of wheat, barley, millets, and beans. This flotation method allowed scientists to piece together a rough picture of an ancient diet. “But spices are absent in macro-botanical record,” says archaeologist Arunima Kashyap at Washington State University Vancouver, who, along with Steve Weber, made the recent proto-curry discovery.*

Working with other Indian and American archaeologists, the two applied new methods for pinpointing the elusive remains of spices that don’t show up in flotation tanks. Instead of analyzing dirt from Indus kitchens, they collected cooking pots from the ancient town of Farmana, a modest settlement that prospered in the late third millennium B.C. (Today, it’s a two-hour drive west of Delhi.) They also obtained human teeth from the nearby cemetery from the same era. …… 

…… Examining the human teeth and the residue from the cooking pots, Kashyap spotted the telltale signs of turmeric and ginger, two key ingredients, even today, of a typical curry. This marked the first time researchers had found unmistakable traces of the spices in the Indus civilization. Wanting to be sure, she and Weber took to their kitchens in Vancouver, Washington. “We got traditional recipes, cooked dishes, then examined the residues to see how the structures broke down,” Weber recalls. The results matched what they had unearthed in the field. “Then we knew we had the oldest record of ginger and turmeric.” Dated to between 2500 and 2200 B.C., the finds are the first time either spice has been identified in the Indus. They also found a carbonized clove of garlic, a plant that was used in this era by cooks from Egypt to China.

They found additional supporting evidence of ginger and turmeric use on ancient cow teeth unearthed in Harappa, one of the largest Indus cities, located in Pakistan west of the border with India. Why would cattle be eating curry-style dishes? Weber notes that in the region today, people often place leftovers outside their homes for wandering cows to munch on. There are numerous ancient Indus images of cattle on terra-cotta seals, suggesting that during Indus times, people may have regarded cows as sacred, as Hindus do today. The Harappan ruins also contain evidence of domesticated chickens, which were likely cooked in those tandoori-style ovens and eaten. …….

US approves sale of taxpayer subsidised battery maker to China

January 30, 2013
Image representing A123 Systems as depicted in...

Image via CrunchBase

Not just irony but also further evidence that subsidies are fundamentally unsound.

Back in October last year the US lithium-ion battery maker, A123 Systems, filed for bankruptcy.

10/15/2012: A123 Systems, which had received a $249 million grant from the U.S. government, filed for Chapter 11 bankruptcy protection on Tuesday, giving Republicans fresh ammunition to attack the Obama administration’s subsidies for green energy.

The filing came after the lithium-ion battery maker’s $465 million rescue deal with Chinese auto parts supplier Wanxiang Group collapsed, hobbled by “unanticipated and significant challenges,” A123 said on its website. A123 has agreed to sell its automotive operations, including two factories in Michigan, for $125 million to Johnson Controls Inc, a leading battery supplier and another recipient of federal green subsidies.

….. The U.S. Department of Energy allotted about $90 billion for various clean-energy programs through the administration’s stimulus package. Of that, at least $813 million went to energy companies that eventually filed for bankruptcy, including A123, Solyndra, Beacon, Abound Solar and EnerDel.

But Wanxiang Group persevered and the US Committee on Foreign Investment (CFIUS) has granted its approval for a revised deal to go ahead. In addition to the automotive business divested to Johnson Controls, all government related business was also divested by the bankrupt A123 Systems to Navita Systems (at a fire-sale price of $2.25 million).

Bloomberg: Wanxiang Group Co., China’s biggest auto-parts maker, won approval from the Committee on Foreign Investment in the U.S. to buy most of the assets of A123 Systems Inc. (AONEQ), the bankrupt electric-car battery maker backed with U.S. government funds.

Approval from CFIUS, as it is known, was the final hurdle that Wanxiang needed to overcome to complete the deal. The federal interagency group led by the Treasury Department was reviewing the sale after members of Congress expressed national- security concerns over allowing a foreign competitor to obtain the technology developed with government backing. 

…… “Nothing provided by CFIUS has changed my opinion that the core technology developed by A123,” and the related intellectual property, “can be separated along A123’s business lines,” said Representative Bill Huizenga, a Republican representing Michigan’s 2nd Congressional District, in an e- mailed statement. “American taxpayers should not be funding technology that will in turn be used in competition against American companies,” he said, adding that he will look into legislation to prevent sales of taxpayer-funded “sensitive technologies” to foreign companies in the future.

….. “The Energy Department’s Recovery Act grant to A123 was used for the construction of brick and mortar advanced battery manufacturing facilities at two Michigan locations,” Bill Gibbons, a department spokesman, said in an e-mailed statement. The funds weren’t used for the company’s research and development of battery technology, he said.

“The purchase of these assets includes the Energy Department’s requirement that the plants and equipment partially paid for by the Recovery Act stay in Michigan and continue to operate, generating job opportunities for American workers,” Gibbons said.

….. As part of the purchase Wanxiang, based in Hangzhou, China, will get A123’s cathode powder plant in China and its share of a joint venture with Shanghai Automotive Industry Corp., called Shanghai Advanced Traction Battery Systems Co., in addition to the battery technology used in Fisker Automotive Inc.’s Karma sedan. Fisker, A123’s main customer, said it was awaiting the sale of the company’s Michigan plant so it could resume production of the $103,000 plug-in Karma sedan. A123, whose automotive business supplies electric-car batteries to about a dozen customers, has facilities in the Michigan cities of Livonia and Romulus.

The A123 Systems bankruptcy itself raised some questions about who had walked away with all the benefits. In a sense the subsidies have served the purpose of those investors who got away in time! For the US this now appears to be a damage control exercise to stop the bleeding where some local jobs are temporarily “saved” but the long term benefits are all to the account of Wanxiang. If indeed A123 Systems used government funds only for the building of factories and not for R & D, then Wanxiang have – fairly cheaply – bought themselves a foothold into the US market But if the US market develops – which it may not – then some or all of these jobs will eventually move to a low-cost country. Wanxiang has in any case bought themselves a technology cheaply which may address a world-wide market. But the jobs that creates will not be in the US. If the technology fails or the US market does not develop, then Wanxiang can just walk away from the US but they will retain the technology for whatever it is worth.

Paradoxically the only way in which the US taxpayer wins is if the technology is a dud and the deal represents future losses and liabilities being exported to Wanxiang!