Overcoming Barriers to Success: State Air Resource Board Leaders & L.A. Clean Tech Entrepreneurs Look To Better Align

Mary Nichols

At the recently officially opened La Kretz Innovation Center (the home of the Los Angeles Cleantech Incubator), leaders from the California Air Resources Board (CARB) co-hosted a valuable roundtable discussion event focusing on how state policies are driving technological innovation in California. Among the speakers were CARB Chair Mary Nichols, CARB Board Members Barbara Riordan, Judy Mitchell, and Hector De La Torre, and CARB Ombudsman La Ronda Bowen, as well as numerous entreprenuers, such as Chai Energy’s Evan Birenbaum, Entrade’s Julia Mros, GRID Logistics’ David Alba, and Green Commuter’s Gustavo Ochiuzzo. The discussion began with an overview of some of the disruptive technologies, and then entered a conversation where the panelists discussed how regulations and the funding process can better assist early stage technologies that will address the state’s climate and energy goals. VX News presents an excerpt of the conversation.


La Ronda Bowen: One of the goals of this CARB/LACI event is to make sure that when policymakers are looking at how to build future that’s sustainable, you—the entrepreneurs; the people who are developing the solutions—are there. And likewise, when you’re working on your clean & green tech projects, you’ll be thinking about how they fit into the policy that’s driving California and the world.

My passion for this was fueled by VerdeXchange this past year, when I sat through two days of wonderful, inspiring, lively meetings about the policies driving the world and the great technologies that people are coming up with. After the very last panel of the very last day, I had this question: Why aren’t any small business innovators and operators in the room during ARB’s workshops? Where are you? 

My challenge to you is to join us—to be part of the policy that is intended to serve the public. There is no public policy without the public, and you are both the policy innovators as well as the public that has to live with the policies we make.

David Alba: I’m the co-founder of GRID Logistics with my partner Richard Miller. Together, we developed the GRID project to clean and improve freight movement from the Southern California ports at no cost to taxpayers.  The Southern California Association of Government’s (SCAG) current proposal for the movement of containers would widen the 710 Freeway with more traffic lanes, and includes this 40-mile-long double-deck freeway for trucks. These two projects alone are estimated to cost about $22 billion, and we just don’t have that money to pay for it.

We propose building a freight pipeline deep underneath the freeway. Think of it as a 15-foot-wide sewer line with an electric track—as opposed to a subway, which would require life support, safety, and other costly requirements related to people-travel. This pipeline would remove about 70 percent of port-related trucks clogging up our freeways. 

The heart of the system is our patented SuperDock™, which feeds the millions of containers into the freight pipeline. The SuperDock™ also feeds the double-stacked trains into and out of the Alameda corridors used by our railroads. This provides direct on and off ship-to-rail transfer.

Last year, GRID Logistics was approached by Hyperloop and AECOM, the world’s largest engineering firm, to study the freight movement of Southern California. We found there were many benefits to our project: First, it would double port capacity without more freeways. It would remove 180 million truck miles from freeways. We estimate the project cost at $18 billion of private funding; it will pay for itself without the need of tax dollars. Most importantly, it would be an unprecedented piece of pollution-mitigation infrastructure.

Our next step is obtaining a third-party evaluation of the system to establish its performance and verify that it is a pollution-mitigation project just as much as a transportation project.  The GRID project could be completed before the summer of 2024. We would appreciate all your help to develop this zero-emissions infrastructure for great benefit to a greater Los Angeles.

Julia Mros: Entrade is a German start-up that designs, operates, and engineers waste-to-energy power plants. Our flagship product is the E3, one of the smallest clean-energy heating and cooling plants on the market. It runs on locally available biomass waste and generates baseload power from it. The E3 starts at a minimum output of 25 kilowatts of electricity, 60kW of thermal, and 30kW of cooling.  The E3 is fully automated. The system is decked out in sensors, and we have engineers onsite in Austria maintaining it from afar 24/7. They’re looking at every single detail, and they can act within seconds if anything needs to be updated.

My favorite feature is that the E3 allows for a multi-fuel mix. How it works is, that we run on wood-waste pellets as baseline product. We’ve tested more than 150 different waste streams, including shredded rubber tires and plastic bottles, which we can use at roughly 30 percent. We’ve also tested nutshells, which we can use at roughly 70 percent as they are as feedstock for the E3 system. One of the most exciting research projects that we have done recently is using British Airways’ food waste, using up to 30 percent of the dried food waste and 70 percent of the pelletized food waste to power our system. 

The E3 gets delivered as turnkey system. Since it’s fully automated, it draws the necessary amount of feedstock—about half a ton a day—into the reactor, which has a core temperature of 1,200 degrees Celsius. At that temperature, solid biomass turns into a synthetic gas within minutes. This gas gets cooled down through our heat exchangers, and then fed into the off the shelve GM engine it to generate electricity.  

Over the past year, we’ve gone to market in Europe and are now targeting Japan, Indonesia the US + Puerto Rico and we’ve changed our business model quite a bit. We started off as a sales model, and now have moved to be one of the first global cloud based utilities - we now own all our equipment in the field and operate ourselves, selling electricity, heating and cooling to off-takers.

Mary Nichols: I want to have a discussion about how ARB, as a state agency charged with dealing with air pollution and making plans for addressing our ambitious climate goals, can better connect with the people who are on the cutting edge of developing some of the solutions that we need. 

We’re at a point in our history here in California where we have some amazing opportunities to move our economy forward at the same time that we continue to demonstrate our environmental commitment and leadership. Air pollution in Southern California is a really big problem. Despite the fact that we’ve made huge progress over the years, and have dramatically improved the quality of the air from a health perspective, we are still the dirtiest region in the country. We know that we have a big job to do. 

We also know that the people of California value their air. They value the weather and they value our climate, in the day-to-day sense. In many ways it is the thing that brought people to California in the first place. It was the basis of our economy initially, and it remains something that people here care a lot about. The taxpayers and voters of the state of California over the years have given a lot of support to these efforts.

But we also constantly find ourselves in conflict with people, particularly businesses, who say that our regulations are intrusive, that we are in the way of getting things done, or that we overregulate. It’s a constant challenge and dialogue.

The people who have invented technologies in California that have contributed globally to improvements in air quality are too many to mention. The amount of innovation, and the number of jobs, and businesses that have come about as a result of our activities—at the local level, around the state of California, and especially in Southern California—are enormous. David Abel does a conference every year, VerdeXchange, focused on highlighting some of those opportunities and accomplishments. 

We are enthusiastic about the work of LACI because we see it as a model for promoting and encouraging innovation with clear benefits, particularly when it comes to speeding up the acquisition of the financial and political capital that you need if you’re going to make good on the ideas that entrepreneurs bring forward. With that, I’d like to start this panel with a question about what it takes to get over the initial hump in a business that requires public policy in some way. What do you see as the biggest obstacle in figuring out where to plug in?

Gustavo Ochiuzzo: This is something I wanted to bring up myself. Our first hire at GreenCommuter was a grant writer, because we knew two things: We knew there was a little public funding available, and we knew it was complex to access. 

Today, 40 percent of our staff are grant writers. We have been successful, in the two years since we started Green Commuter, in having six different grants awarded.

The point I want to make here is about eligibility requirements. The majority of the entities eligible for grants are public and non-profit entities—not for-profit entities. That creates a lot of the burden in writing grants, What I would hope to see is an opportunity for for-profit companies to directly apply for grants. 

I want to point to the case of LA Metro. They created the Office of Extraordinary Innovation. What they do differently is that they’re proactive. They don’t know everything that’s going on out here, and it’s hard to create programs when you don’t have that information. So they did it the other way around. They said: Bring us proposals, and we’ll analyze whether they’re worth funding or not. I believe they’ve had a very good response, and it would be great if the state do the same. The strongest partnerships are public-private partnerships. Private companies can do things that public entities can’t, and vice versa. Once we join forces, we’ll get the strongest innovation.

Hector De La Torre: From a former Legislator’s option, in talking about getting directly involved with companies: we’re just not good at small business. If you’re a big corporation, we do favors for them all the time. It’s much harder at the small scale. I think it’s the liquid effect and the risk at this phase. If you roll the dice, sometimes you’re going to lose, and the government’s not in the business of losing in that way. No one wants to oversee a Solyndra situation.  If it were a government agency that screwed up, then it’s not good. But, if it’s a for-profit company that the government gives money to and it doesn’t work out, then it looks really bad. It’s just a risk to get involved with small companies. 

As far as bigger companies, Tesla is a perfect example. They might not exist if it weren’t for all the support that we give them—but they were already in business. They had vehicles on the street, but government support allows them to continue to grow.  The problem is the risk aversion, the liquid effect, in the green space.

Mary Nichols: Evan, you have experience with this at Chai Energy. 

Evan Birenbaum: There’s a tremendous amount of challenge out there. I think the issues are very real. Regulators certainly have the key role in the discussion. For what it’s worth, a lot of issues that are addressing today, especially as relate to California’s environmental policy and air quality issues, stem back to the 70s. 

That sets the stage for California to innovate, integrating renewable energy technologies with technologies we have had for decades. This has come a long way since then. Make no mistake about it: The market exists because the regulations in place, the standards that have been set to determine energy efficiency, and the innovation that San Francisco and Los Angeles have driven. That has an impact on our subsidies that are in place for those that can deliver. 

Going up from a small scale is challenging. But there’s money out there if you have a way to be economically viable, and integrate various sectors and industries that you want to support. We have tried to get people around the table and talk about these things: small ideas, big ideas, and work together to really address the problems at the end of the day.

“The VW Settlement was by far the biggest enforcement action that we’ve ever been involved in—since it was the worst case of deliberate flouting of emissions control law that anyone had ever seen. The amount of money secured for consumers, and for remediation of the harm done by these years of violations, is appropriate to the scale of the problem.” -Mary Nichols