Return to Niagara: SynGest CEO outlines "national clean energy strategy" based on "energy abundance"
SynGest’s CEO, Jack Oswald, tells me that it’s a mistake to be thinking about simply shifting from an energy-starved world based on fossil fuel reserves, to an energy-starved world based on clean energy.
[Note, more on bio-ammonia developer SynGest, here.]
“What we need is energy abundance,” he concludes, pointing out that the new, risky and expensive focus on, for example, energy storage and battery systems, is in most respects the outcome of having imagined a world with too little energy available, where every electron is precious.
Better, he said, to set a goal of having so much energy supply available that, as in older days, we simply didn’t need to think about energy storage in the same ways.
“If you have enough energy, you don’t have to think twice about pumping the water of some some gigantic Lake Tahoe two thousand feet further up the mountain, and using that proven system for energy storage. We don’t have the abundant, affordable energy to do it now, so we end up with ARPA-E prescribing outcomes by setting up energy storage as a critical national technology goal. We still have to develop the same energy systems. Scarcity makes us think and act in different ways, not always to our advantage. Doing ‘a little bit of everything’ is a strategy for failure.”
Oswald has a point. You can read his “Clean Energy 2.0: A National Clean Energy Strategy” presentation here.
“In a nutshell, I wanted to create a model of a carbon-free energy system that would leverage the power of our markets to construct the best possible solution in the shortest possible time.” Looking at the five essential energy platforms: the sun’s core, the earth’s core, gravity, nuclear and fossil reserves, he opted for solar, within which biomass and wind are subsets.
Developing a dialogue, not a diktat
His goal is not prescriptive, but to stimulate a conversation about our real energy goals, and the theme of energy abundance is as good a goal as I have heard in a month of Sundays. “I have some biases,” he commented, “I don’t want to be the judge, I want to get the criteria out there.” His “Clean Energy 2.0″ will not please those whose preferred technique is to await grand proposals and reduce them to embers via the fine-toothed combs that find all the devils in all the details.
“Clean Energy 2.0″ suggests a focus on a solar-based solution. Whether that embraces the photoelectric effect (what we know today as solar) or photosynthesis (what we know today as biomass) is left to be decided by others in a future where the focus is on clean energy, the investment is based on government-set (or investor set) performance standards, and risk is relatively tolerated for well-thought proposals that combine strong concepts with the potential for scale.
Energy efficiency - he sees it as an extender that buys time in the near term and makes energy abundance easier to achieve in the long term.
Population control - he suggests that improved health care and personal wealth has been shown to retard family size, and that energy abundance will play a role in helping to stabilize the global population at around 9 billion.
Critical, Oswald suggests, is a focus on guaranteed, measurable outcomes in energy efficiency goals and rapidly scaling renewable energy solutions that are on the table now, or near to now. “Quick ROI,” he said, “will raise awareness, begin to change behavior, breed a culture of success, and get everyone’s head in the game.” Accordingly, he cautions against the current policy of “trying to do a little bit of everything,” suggesting that it leads to too many delays, too little funding for true R&D, too little funding for scale, and too much failure which defeats the goal of building public confidence in the new clean energy platforms.
“If you set up performance-based criteria and take into account the size of opportunity, then companies can develop approaches that are rigorous and clear,” Oswald added. “Certainty in policy and criteria are especially important to start-ups, it gives people the tools to evaluate new technologies.”
It’s an interesting counter-thesis to the “portfolio concept” being pursued by DOE and others. I am not sure whether it would be greeted as good news by the R&D community, where researchers famously spend so much of their time preparing grant applications, providing progress updates and defending results — or whether it would be viewed as bad news by those who fear being left out in the cold.
Winners and losers
Oswald discussed the problem of winners and losers. He agreed that, at a high level, clean energy runs the same risk as the recent US health care proposal — of attracting too few friends, and courting too many enemies among entrenched interests. Corporations who are doing well under the old systems are rarely tempted to support wholesale changes in energy platforms unless they see abundant opportunities to “win” in the new world that is envisioned.
He’s optimistic about the Kerry-Lieberman-Graham energy bill. “It’s not a big, national plan, it targets individual industries and regions, and simplifies the rules and makes them better.”
Companies that fear they are “on the out” are far more likely to participate in the transformation of the old economy by waging well-funded campaigns of “fear, uncertainty and doubt” against the new, trusting that old slogans like “government takeover” and new ones like “death panels” will awaken old fears among the citizenry, who are generally too engaged in the business of paying the bills to pay much attention to the finer points of detail in massive federal legislation.
So, the Digest will caution that “energy abundance” will only occur if there is “opportunity abundance” for the broad range of entrenched interests. “One of the chalnges of energy,” he noted, “is that no one is unhappy with their gasoline, diesel or electrons. The appeal of ‘I can fix your product problem’ doesn’t apply. In the case of health care, there is dissatisfaction, so you have more options in health than bringing a lower-cost product.”
But overall, we believe it is a commendable concept, worthy as a international goal. The Digest has long rejected the “less is more” view of its brethren in the environmental community, where goals are based in reducing lifestyles and a certain self-denying, puritan streak of the Ed Begley type that is as easy to admire as it is to be sure that it will not succeed. We don;t agree that, as former Australian opposition leader ironiclly put it, “the climate change issue is part of a vast left-wing conspiracy to deindustrialise the world,” we part company at the premise that the people of the world want less or will accept less.
In fact, the people of the developing world want — in aggregate — far more energy, and deserve far more, than the people of the OECD can ever spare through exercises in self-denial, or through conversions to existing renewables technology that are far beyond the budgets or motivation of the ordinary Western family.
The realities of ROI
Well-meaning, wealthy people – that is to say, those with “money abundance” — can put solar photovoltaic cells on their rooftops because it is the “right thing to do”, irrespective of ROI.
However, the world as a whole, operates on very short payback timelines. Solar panels and biofuels have the market share they have today not because they are difficult ideas to embrace, but because they are too expensive. Rising prices, not scarcity, were the root cause of the food vs fuel debate. When prices went down, the issues remained, but the noise abated. We will hear the drumbeat again as soon as corn prices get back on the escalator.
Need more proof that price is at the heart of the renewable debate? Take Germany. Feed-in tariffs that massively subsidize the cost of solar panels are the reason that solar has been widely introduced in Germany, and so rarely in the sun-drenched American Southwest.
It is the case with ethanol as well. Sell E85 for $3.00 per gallon and you won’t move many gallons, and will hear a lot about the “ethanol scam”. Sell E85 for $0.85 per gallon, and the lines form around the corner. Propel Biofuels knows.
Current clean energy platforms must generate and then extract — whether it is solar, biomass or wind — and compete with extractive fossil fuel technologies which have let Mother Nature do the generation. It is a model that requires transformation – either in the near-term through the tax system or in the longer-term through innovation and markets.
A new Niagara
The world that Oswald imagines is likely only to come to pass if there is cheap, abundant, clean energy. We talk in terms of the Apollo program, but really should be talking in terms of the original hydroelectric project at Niagara Falls — that was the one true era in which energy was cheap, and clean, and there was more available than needed.
So, let the debate begin. Is it a better world in which we find ways to use less fossil energy, or in fact is the answer at Niagara Falls? Should “cheap, clean, abundant energy” become the national priority (and designed so that entrenched interests see a better future in it for themselves), or should we continue down the path we are heading, with so many little bets on clean energy, creating too few winners and too many losers, with a goal of only perpetuating the scarcity that currently makes more volatile the global business model.
Clean Energy 2.0: A National Clean Energy Strategy
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