Reviving a Suppressed Technology – Part 4
Technical and business issues of Dennis Lee’s heat pump – in Seattle, and the organized suppression.
When electricity was one cent per kilowatt-hour, which was the cheapest electricity on Earth, due to Washington’s many hydroelectric projects, Dennis had no market for energy-saving equipment in his home state.
But when he went home to Yakima, Washington, in December, 1983, after his last East Coast company was stolen by his business associates and mobsters, he was greeted with full-page ads by the electric companies to promote energy conservation. I have covered these days at length many times, most recently here. Because of the biggest municipal bond default in American history to that time, because of an ill-advised plan to build five nuclear power plants, only one of which was completed, suddenly, electric bills in Washington began skyrocketing and, hence, those full-page ads.
Electricity-intensive industries such as aluminum refining (which I encountered elsewhere in my studies, along with related corruption) were in Washington, to take advantage of that cheap electricity. Dennis’s infant son died of crib death during that visit, Dennis had nothing to go back to on the East Coast, and those full-page ads presented an opportunity. The electric companies were promoting air-to-air heat pumps to their customers, especially their all-electric customers, as an air-to-air at a coefficient of performance (“COP”) of two would save 50% of heating costs over electric resistance.
If the electric companies were promoting electricity conservation and air-to-heat pumps that saved 50% of an all-electric customer’s heating cost, Dennis figured that the electric companies would have been ecstatic with Dennis’s heat pump, which would save over 80% at a COP of six. Dennis expected a tickertape parade. Dennis reckoned incorrectly. The next year, Mark Comings invented a free-energy prototype in the basement of a nuclear facility, and he had hell to pay. The year after that, Sparky Sweet mailed out working prototypes of his free-energy prototype to the leading energy institutions, also expecting a tickertape parade, but that was when his harassment began. In 1985, the same year that Sparky mailed out those prototypes, the greatest effort ever made to bring alternative energy technology to the marketplace happened, which is what Dennis did in Seattle, but I get a little ahead of myself.
Eastern Washington has a largely agrarian economy based on farms and ranches, in a desert-like environment that is irrigated by rivers, especially the Columbia River. Today, several billion dollars of farm and ranch products are sold each year from there.
Processing the apple crop uses large amounts of hot water, and the apple processors burned natural gas for making that hot water. Dennis began experimenting with his heat pump there, and in the summer he measured a COP of 12. An electric-company engineer even came out and advised Dennis, because if his heat pump displaced gas heating, it would increase electricity use. That engineer, however, got a deer-in-the-headlight expression when Dennis mentioned going after all-electric homes in Washington, but Dennis still did not figure it out.
Dennis left Yakima a farm boy, but came back from the Big Time in Manhattan, and a local oligarch wanted to work with Dennis. In fact, the oligarch said that unless Dennis worked with Yakima’s oligarchy, he would not get anywhere, as they controlled the local economy. Dennis eventually realized that there were oligarchies everywhere, at the city, county, state, national, and global levels. They all play the same basic game, but the global level is where Earth’s apex predators reside.
That local oligarch, however, didn’t really understand much about what Dennis was doing, and Dennis wasted nearly a year in Yakima with that oligarch. In the meantime, Carter’s credit would expire at the end of 1985. Dennis had spent five years of that tax credit getting his companies stolen, etc. In October of 1984, that oligarch was telling people that he didn’t need Dennis anymore. Dennis had enough, took his wife and daughters over the mountains into Seattle in a beat-up station wagon, with $20 in his pocket and no place to sleep.
In one of many instances of bizarre and even divine synchronicity in this tale, when Dennis was on the brink of the billion-dollar deal with American Express, one participant in the theft of LamCo was from the Seattle area. American Express wanted patent protection for the deal, LamCo had a patent, but its only enforceable aspect was the proximity of the expansion valve to the panel. It was really pretty worthless, but corporations like patents. In the theft of LamCo, the patent ended up with a bank in Seattle, which had built a facility for making the LamCo heat pump. But they were complete beginners, their head engineer was a kid who didn’t really understand the technology, and he was primitively building them according to the original patent. He was the one who could not get his textbooks out of his head and learn. That bank, like the 100 companies that had already come and gone in the field, was on the fast track to going out of business when Dennis arrived. Dennis announced that their savior had arrived, but they had no idea who Dennis was and treated him like a nuisance.
Dennis did the usual and led with sales. He began selling with his Systems for Savings plan, and he planned to get a bank’s attention by stacking contracts to the ceiling. What I have not really discussed much before was that Dennis’s heat pump, and the way that he sold them, was a bank’s dream. For the deals Dennis had in mind, the bank had the collateral of a $10,000 immobile piece of equipment on the customer’s home, and they could put a lien on the house if they needed to. It was far more secure than lending for a car, for instance. The tax credit also paid $4,000 of the purchase price, so the customer only owed $6,000, and $4,000 funded the direct costs of building, selling, and installing the heat pump. It was a financier’s dream. The heat pump didn’t even need to work very well in order to be a big winner, especially when it was replacing electric-resistance heating.
Dennis stacked up the contracts and was about to rescue that bank that got involved with the LamCo heat pump. The bank’s representative was highly impressed, but the bank refused to get involved with Dennis, which stunned Dennis. Then the representative made a memorable reply to Dennis’s disbelief that they would turn down the deal that would rescue them. He told Dennis that somebody in Seattle had warned all of the banks from getting involved with Dennis. It was Dennis’s first hint of what was about to happen. The Bonneville Power Administration (“BPA”), the federal agency that ran the hydroelectric dams, was the ringleader of Washington State’s electric companies. That agency was behind what was about to happen to Dennis’s Seattle effort.
Dennis kept stacking up contracts and had sold 1,000 of them, looking for a financier outside the Seattle area, and in the spring of 1985, he found it in Spokane. The owner of the finance company was like the chairman of the board of American Express, as he understood the genius of what Dennis was doing. After doing his diligence, he not only knew that it was the world’s best heating system, but he wanted a piece of the action. He put Dennis in contact with one of his employees who knew a man who owned a shell company. Shell companies were a legal way to take a private business public quickly.
Dennis then met with the shell company’s owner, and they had a brief meeting to sell the company to Dennis. The financier got 10% of Dennis’s new publicly traded company, some of Dennis’s early investors and the shell’s old owners got the other 10%, and Dennis retained the remaining 80%. Within weeks, Dennis’s ownership stake was worth $50 million, according to the skyrocketing stock price. From penniless to worth $50 million several months later, that was the kind of world that Dennis lived in. The financier made a $10 loan commitment, a factory in California was going to build Dennis’s systems as fast as he could sell them, and Dennis’s dream of building an industry around that heat pump looked like it might finally happen.
Just as the financier and factory came aboard, a series of events happened that showed who really ran the show. An electric company near Seattle held a press conference that called Dennis’s company a scam, that the heat pump did not work, and it was calling for an Attorney General’s investigation of the company. Two years later, one of our customers in Boston, a banking executive, called the BPA to ask about Dennis. He received a return call from the BPA’s conservation department, and the official admitted that all that the BPA’s conservation department thought about for months was Dennis. The BPA did not just quake in fear. It soon hired a corporate hit man to infiltrate Dennis’s company and help wipe it out. His efforts led to death of one of Dennis’s employees, which radicalized Dennis. This is the point in writing this post when I discovered that the hit man had died, and I was finally free to publicly name him, nearly 40 years later. His name was Bill Delp, and I think that Dennis hired Bill in July, 1985, 40 years ago this month.
All aspects of Washington’s power structure got involved, and the national and global elite also appear to have gotten involved. The Rockefellers’ bank, Chase Manhattan Bank, wiped out Dennis’s factory in California at the same time. These events happened the year before the voice in my head told me to move to Seattle, so I did not witness them, but I spoke to many of the participants and followed their lives and careers, including the hit men and women who were sicced on Dennis’s company. That process helped me understand how power structures work.
The financier came aboard, the Rockefellers wiped out Dennis’s manufacturer, an electric company called Dennis’s company a scam and called for an Attorney General’s investigation, and Bill approached Dennis, all within a few weeks. That was no series of coincidences. The electric interests decided to call in all of their favors to wipe out Dennis’s company.
Nobody in Washington State knew Dennis’s heat pump better than he did, from his nearly six years of involvement with it by that time, as he tried to build an industry around that heat pump. From the very beginning of his involvement, Dennis knew that buyer-installed systems were not the way to go, he tried to professionalize the fledgling industry, and he regularly thought of ways to make installation easier. One day in Seattle, Dennis hit on an idea that he called a “heat injector.” A picture of it is here. Dennis’s idea was an upright panel array that resembled a revolving door, and it was fabricated and charged with refrigerant at the factory. The entire system was ready-to-work when it left the factory, and installation would have been about as easy as installing an air-to-air.
As I have thought about Dennis’s heat-injector idea over the years, I have weighed the pros and cons of it. Eliminating most installation issues was its main advantage, which was huge. But not all panels would directly face the Sun, taking advantage of sunlight. As is obvious from this test in the Minnesota winter, the coefficient of performance (“COP”) reached as high as an eight in the daytime and as low as four at night. Sunshine, higher ambient daytime temperatures, and higher wind velocities improved heat-injector performance. The wind would improve the heat-injector array’s performance, whichever direction the wind came from, and it would get better heat exchange with the air than most other arrays, especially flat on a roof. It is an interesting research question on how much system performance would change with the heat-injector array compared to the others. Dennis never got to find out, as his company was soon wiped out. My guess is that the overall difference would be relatively modest. The most important aspect, of nearly 400 square feet of evaporator contact with the air, would not change.
Another technical issue was that industrial refrigeration was virtually always about removing heat, not capturing it. So components were designed around that concept. In refrigeration applications, gas-to-water heat exchangers had the walls containing the hot refrigerant part of it exposed to the air, to also help vent the heat. For Dennis’s application of gathering heat, it would have been better if the cooler water was the part exposed to the air, to reduce the heat loss. The industry never designed them that way, so Dennis’s systems had insulation around that heat exchangers to reduce heat losses. It was a clumsy fix, and if Dennis would have ever built that industry, the heat exchangers would have been designed to swap the hot and cool parts, and insulation would not have been an issue. That was just one of many technical issues that Dennis’s heat pump presented. None were that difficult to resolve, and would have been easily fixed if manufacturers began building components with Dennis’s heat pump in mind.
Water tanks were a good heat “battery” for residential systems. If Dennis ever built an industry, my guess is that systems and water tanks would be sized so that the systems worked 24 hours a day in the winter months, as continuous running was ideal. Smaller systems that stored heat in water tanks could still meet a home’s heat needs, including high-demand days and evenings, and could “recharge” the heat in the water tank at night and daytime.
The panels of that Portuguese company definitely held less refrigerant than Dennis’s panels did. Dennis’s standard system had eight panels, a four-horsepower pump, 60 pounds of refrigerant, and it produced 100,000 BTUs per hour. I don’t know what the specs of the Portuguese system are, but my guess is that it only holds 30 pounds and delivers half of the heat, which may well be appropriate for the Portuguese climate. Technology has changed in 40 years, as I have written. Homes are insulated today, we have Global Warming, energy prices have fluctuated, there is no more tax credit, and other variables. That panel means that that style of heat pump will always be the world’s best for producing heat. If that heat pump was revived, other than one company on Earth making them, I would expect that all of those questions would be asked and resolved.
Those six years between when Dennis stumbled into that heat pump and his Seattle effort was wiped out comprised a unique historical moment that won’t be seen again. If we don’t get free-energy technology for now, every place on Earth that produces heat to make hot water and human-friendly environs should use the LamCo-style heat pump. The global market is at least hundreds of billions of dollars and maybe more. I don’t see the technical issues as being very significant.
Surviving the organized suppression was the hard part, and I’ll deal with that more in the next post.