Don Thurston Blog

Joules, Kilowatt-hours, Foot-poundals, Horse-power-hours, Liter-atmospheres

Robert Preston as Professor Herald Hill in the movie The Music Man was a spell-binding travelling salesman promoting schoolboy’s bands complete with lessons, uniforms and instruments. Professor Hill targeted River City, Iowa. Happily for Herald a pool table arrived at  at the same time and installed in the local billiard hall. Grasping the arrival as a prop to promote his band products, the quick thinking Professor composed  a captivating song about the evils of pool versus billiards.  He sang ” My friends you have trouble right here in River City;  trouble and that starts with a capital T and that rhymes with P and that stands for pool”. Today he could well sing “My friends you have trouble right here in River City and across the world; trouble and that starts with a capital T and that rhymes with E and that stands for energy”

Acknowledging the existence of energy troubles in River City and across the world, how can anyone make any sense of the issues and solutions? Substance gives way to a constant barrage of blah blah.  Worse the blah blah is frequently contradictory. Even worse quantification quickly morphs into  claims  such as huge offshore winds can reduce fossil fuel consumption in the United Kingdom by forty percent, or cell phones are massive consumers of energy, enough to power ten thousand homes, or nuclear energy is civilization’s worst  enemy because the tons of spent rod will contaminate the world.

Political forums provide no respite. With all sincerity elected officials advance diametrically opposed solutions to the same problem. One will say “if we’re going to cut gaseous effluents sixty percent by 2050 there is no other way except by renewables”.  A civil servant associated with the party in opposition speaking in favor of nuclear expansion, said “anybody who is relying upon renewables to fill the energy gap is living in an utter dream world and is, in my view, an enemy of the people. (2)

So what is a mere mortal to do?

Let us imagine that somewhere in this wide world there is a dedicated venture so ambitious as to utilize renewable energy, develop the complete power storage equipment, construct competitive vehicles, build a dedicated fuel distribution system and an innovative product distribution structure. All of this is accomplished as a profitable private sector venture.

Professor Herald Hill would sing “My friends we have a potential energy alternative right here in River City and around the world. As a blatant promoter his song would exclude verse after verse about the multitude and magnitude of the risks. He might add, the Tesla experiment is one of the largest private sector ventures of its kind in history.

By way of review, Tesla’s corporate strategy is the build of an energy related corporation, assimilating solar power, electrical storage, energy distribution and electric engines. Say what?

Can solar power do the necessary massive electric generating job? Tesla thinks so. A measure of their conviction is the acquisition of Solar City to the tune of three billion dollars.

Can the lithium-ion battery do the energy storage job? Tesla says yes; storage capacity is fundamental. Progress is indicated by the rapid increase in these batteries to do the job.

Can an electric powered auto look and act like the cars we now own and love? Simply put, check out the currently available models. These are not elaborate golf carts.

Can renewable energy make economic sense without subsidization? Tesla recognizes that subsidies are available for the purchase of electric powered vehicles. The continuation or expansion of such programs are matters of conjecture.

Tesla has availed themselves of incentives related to research, product development, plant location, employment costs, and to Solar City. Unquestionably the amount has been substantial.  Worldwide, all manners of location inducements are negotiable; high technology ventures even more so. Tesla has and will benefit from these opportunities.

Can a manufacturing process be created out of nowhere to produce millions of vehicles? Tesla has a one five point three million square foot plant in California with more on the drawing board. State of the art technology highlights the facility; robots are everywhere.

Can distribution and maintenance systems be organized eschewing traditional methods? Tesla’s main focus is an online system with company service centers, replacing the traditional dealership model.

Will entrenched competition from traditional producers prevent success? The Fords of the world will not standby and be eradicated. Tesla faces severe competition; their response-bring it on.

Are sufficient financial and human resources available? Tesla’s current balance sheet shows five and half billion dollars of paid in capital and losses to date of two and half billion dollars. The company will require new capital.  The availability is not assured. Employment now stands at fourteen thousand and growing. Recruiting has not been problem.

Will vehicle demand remain at traditional levels? Tesla believes so.

This is an authentic high risk project with the potential of providing access to low cost fuels powering electric engines whose efficiency is much higher compared to the internal combustion engine.

Tesla investors vision the evolution of a competitive product prospering without subsidies.

Bonuses- unlike most energy enterprises, the Tesla trial provides transparency and score cards in real time.  Company documents, external audits, the Securities and Exchange Commission and countless financial analyst ensure an avalanche of information. Most notable, documentation emphasizes the major risks that permeate every part of a huge economic venture.  Gone is the blah blah.

A story worthy of inclusion in Sustainable Energy Without the Hot Air by David McKay (2).

Herald Hill would surely welcome the opportunity to sell Tesla stock to the citizens of River City; a cake walk compared to band instruments.

(1) Five methods of measuring energy

(2)Sustainable Energy Without the Hot Air by David JC McKay  UIT Cambridge Ltd. page 2

 

 

 

Don Thurston Blog

Samuel de Champlain Meets Chief Tessouat

Chief:  Welcome Sam, to our Longhouse. We hope you will find your surroundings comfortable and suitable for our conversations.

Sam: Chief, we are most pleased to have this chance to meet with you and your associates today. Thank you for such great hospitality. We much admire this magnificent structure.

Chief: Let’s eat first.  We have a savory stew made with beans, squash, pumpkin and venison. Side dishes include corn bread and artichokes garnished with sunflower seeds. Our chef has prepared a tasty beverage of mint tea and honey.

Sam: We are honored and will enjoy this fine meal with you.

Chief: Sam, your advance party told us that you are from away. Your journey has been long and hazardous including crossing a large body of water using a boat aided by the wind.

Sam: Correct. As well our river journey has been most wonderful and exciting. Your fine canoes are a new experience, navigated by your skillful colleagues.

Chief: And your adventures so far?

Sam: The most notable is the establishment of a settlement on the north shore of a giant river. We are naming the hamlet Kebec. In addition we have traveled far and wide, meeting with many people from many different bands. Giant forests, waterways and animals of many descriptions are all wonders to our eyes. This is truly a bountiful and beautiful world, so unlike our home countries.

Chief: Our expectation is that you are here for purposes other than just to look around. Please fill us in.

Sam: Our home countries are not attractive in many ways. Other than a sense of adventure we are searching for new territory. We want to establish permanent communities for our fellow citizens so they can have a new beginning and forge a new life.

Chief: Settlement instead of exploitation is a new concept to us. Others have come before for you to harvest our trees, fish, whales, furs and other products so abundant throughout this vast land.  Their main objective is to send our resources home, leaving little in return.

Sam: Our objective is to build communities and partnerships. We want to trade rather than just supplying our homeland.  As I have said our longer term wishes are to settle into this vast area and become true partners.

Chief: A partnership implies mutual gains and equality for all stakeholders. We have a vast and bountiful world here that you covet. What can we expect in return that balances our partnership such that everyone benefits equally?

Sam: We bring many modern tools to ease your work load. And firearms, providing protection from those that wish to conquer you. We bring alternatives to your spirituality which will be beneficial to your long term wellbeing.   We can share all the attributes of our modern civilization thereby greatly enhancing your quality of life. We offer vast markets for your abundant resources.  Trade will be beneficial to all parties as we exchange our best products for yours.

Chief: All of these are very enticing and worthy of further conversations and negotiations. We will get back to you after due deliberations.  Thank you for undertaking this journey.

SCRIBE’S NOTE

All parties were pleased that Champlain’s intentions were worthy of consideration and sincere. As a result, subsequent conversations resulted in equitable contracts for all parties. Included were the requirement for regular progress reports for distribution to all stakeholders. Updates on a timely basis were to include issues of improving health, economic growth, sustainability, environmental impact, life styles, education, technology, dispute settlement, and governing principles.

 

Don Thurston Blog

BED&BREAKFASTS-R-US

New to the retail sector is a specialty distributor providing furnishings, supplies and consulting services for bed and breakfasts. The firm is well named as BED&BREAKFASTS-R-US (www.bbru.org).

The company’s motto is EVERYTHING FOR YOUR GUEST’S COMFORT AND CONVENIENCE.  Services and products include architecture plans, breakfast menus, furnishings, room designs, decorating, security and amenities.

Searching their website and scanning brochures reveal a treasure trove of information.

There is an excellent section on building designs. Space is always limited and can be preserved with ingenuity. Construct stair wells to be just wide enough to accommodate luggage and no more. Eliminating banisters saves space as well. Bedrooms should be large enough to contain a double bed and not large enough for a queen sized. Two elements to guard against are easy access to windows and closets. Make sure to limit room for suitcase storage.

Lighting is important. In the bedroom for example bedside illumination should be barely sufficient to read by, making it very difficult for a quiet interlude. Faulty switches are a design bonus. Make sure wall switches are some distance from the bed thereby necessitating getting out of bed before sleep.

Some of these principles can be followed for lighting in the common room. Be sure to provide just enough lighting to read large print brochures about tourist features in the area.  If guests wish to watch TV, the remote must be in evidence. It does not necessarily have to work. The TV can be from another era, and in a distant corner as well. Poor reception helps, discouraging watching too much TV and using excess power.

Furnishings follow the simple attributes of stuffed chairs and sofas and slightly wobbly tables. Vintage family photos provide a home like ambience and do not have to be authentic. A nice touch is the addition of knock-off Tiffany lamps.

Selecting appropriate reading material is very important. One readily available source is used book stores where  volumes of Encyclopedia Britannica’s  can be acquired simply by carrying them away. Magazines provide excellent diversions. Plan carefully and collect out of date editions; one expert advises doctor’s offices are good sources. Titles such as the Ladies Home Journal and Popular Mechanics are known to have universal appeal.

Our current counsel is to stay away from internet service. More on this subject is forthcoming.

Careful attention to bathroom facilities goes without saying. Shower taps need to be very difficult to operate, extra toilet paper is compulsory but stored in the most remote place as possible, fresh bar soap is a nice touch but virtually impossible to unwrap. Pay attention to safety measures by way of small bath mats and the exclusion of door locks.

Turning to the breakfast menu, quality-creep and a wide level of selections are in evidence. Too many operators continue to provide excellent and varied meals using quality ingredients. These tend to reduce profits. Prudent shopping practices will reduce costs with hardly any diminution of variety and quality.

Please refer to our more extensive review of this new firm in our June issue of  Guide for the Complete Hotelier.

BED&BREAKFASTS-R-US are available for franchising opportunities. Consult their website for additional information.

Don Thurston Blog

Contrary to popular belief, you can compare apples to oranges

Apples and oranges can be compared, just as equities can be compared to bonds. Apples and oranges are both fruits with complementary characteristics, and when blended one has a fruit salad. When one blends equities with bonds you make a balanced portfolio.

The quality of the fruit salad depends on the the apples and oranges plus additional ingredients, hopefully complementary. Choices include grapes, kiwi, strawberries, apples. Bananas  help, but are time-sensitive. If you want to ruin the mix, try lemons and limes.

Keeping with the analogy, a mixture of bonds and equities plus cash makes for a nice mix. Destruction comes with low quality, too much of one asset and non complimentary  assets. Worse is overwhelming the mix with the flavor of the day. A fruit salad with too many grapes is as bad as a portfolio with, for example, too heavy a weighting in infrastructure assets, now a very popular ingredient.

Seldom will one find a low quality fruit salad, home or away. Not so with portfolios.

On a final note, watch out for bad analogies!