The Case for Energy Optimism Part II

Peak fossil fuel is here, but its not evenly distributed.

After a dramatic pause I’m back with the exciting finale to The Case for Energy Optimism Part I. In my defense, while I learned a lot from Stephen King’s On Writing, he was always terrible at endings and I’ve taken that as inspiration.

I will not be acknowledging that this comparison can’t cleanly apply to a non-fiction essay.

In the intervening time I’ve also decided to narrow the focus of The Scattershot: the range of topics will stay mostly bound within the areas of land use, energy, and transportation. I think these three topics are intrinsically linked as a sort of Civilizational Operating System.

But back to energy optimism.

I talked about the US energy market, the difference between commodity fuels versus renewable technology, and how the rapid learning rate of technologies was already yielding incredibly encouraging trends. What this means is we can have…

Peak Fossil Fuel Is When We Want it

Breaking up is hard to do. Especially when you are GDP growth and energy consumption, but for much of the developed world we’ve already done it. We ate the pint(s) of ice cream, deleted phone contacts, and hit the gym.

Since the recovery from the 2008 recession GDP growth took off, but electricity use starting arcing downward in North America, much of Europe, and in Japan. These trends predate the tipping point of clean energy and have much more to do with the fact that economic growth is tied increasingly to digital products, knowledge work, and services.

https://www.eia.gov/todayinenergy/images/2017.11.20/chart2.png

So, even incredibly energy hungry countries like the US can turn the corner.

But Jóhann, you ask, should we be worried about offshoring dirty energy?

Yes, we very much should. The sharply rising trend line for China can’t be ignored, and to fuel its energy needs for its rapidly industrializing and modernizing economy it built a lot of coal powered plants. Its planning on building a lot more.

Much of China’s industrial policy is driven by centralized planning, need for job creation, and often a policy of building infrastructure beyond the current market’s ability to use what is built. It warrants a deep dive all on its own.

However plans made do not always become plans executed. India has scrapped ambitious plans for new coal plants when confronted with a much lower energy cost for solar.

The rest of the world is also likely to be similarly cost conscious and will face a relatively easy choice when addressing their energy needs.

The decoupling of energy from growth is a larger trend based on the shift of how countries grow as they develop, it provides a model for nations to adopt and its a trend we can accelerate with targeted policies to create more…

Tipping Points

Other indicators show tipping points across different industries that have ramifications everywhere:

  • Coal is projected to enter into structure decline based on current market trends. Renewables are also about to outproduce coal for the first time ever and from now on.

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  • EVs are expected to hit 15% of new car sales in Europe in 2021 as regulations on car emissions drive massive adoption and Car makers start to release more mature and affordable electric designs across every segment.

  • Even in “coal friendly” America, the economics of coal plants don’t make financial sense even when regulatory burdens were slashed by the Trump administration.

  • Companies see the writing on the wall: Microsoft, Amazon, Walmart, Pepsi and others have commited to fleet electrification, zero emissions (some even negative emissions), and more. Its not just regulatory compliance either, they expect clean companies to be cheaper to run.

The Risk: Keeping The Status Quo

While those trends are encouraging and the support for clean energy, to address climate change, is very popular there are big risks.

(Yikes)

None of those positive trends were inevitable. Solar prices reaching large scale affordability were the result of decades of publically funded research, major subsidies in the US and abroad, and markets being created for clean energy before it was so cheap that it was obvious.

Electric cars are exactly the same story. The increasingly competitive market today comes from years of private and public investment in electric technology, tax credit subsidies, and regulations creating incentive to convert fleets to electric ahead of internal combustion car bans.

We can’t just rely on “good actor” companies to offset a lack of regulatory action either. While BP talks a good game about going green Exxon is doubling down on fossil fuel extraction and consequently raising their emission outlook well into the future.

Disproportionate investment also looms large in the energy industry. The incentives to switch gears are not yet so strong as to send oil companies running with reckless abandon into the solar panel business. They see a profit to be made extracting oil, burning it, and selling it while the world fumbles on a global energy transition.

The Opportunity: Pay Sticker Price And Save

…the World

The trends are apparent and the tipping points are cropping up all around us. The next step is put our finger on the scale in the direction that things are already headed.

Climate and energy policy is on the ballot and its in your shopping cart.

This year there is a Presidential candidate on the ballot, who despite a puzzling soft spot for fracking, has the most aggressive clean energy plan ever proposed by a major Presidential candidate. Full stop.

Other places we can tip the scales?

  • More Housing: ballot initiatives for denser housing, while having the added benefit of generally improving afforadability also help the climate. Dense urban living housing produces substantially less carbon emissions than suburban/rural.

  • Solar/EV Subsidies: Many localities have put the ability to make money from home solar installations on the ballot. Many utilities are against it, because it can cost them money, but you don’t have to be!

  • Public Transit: In the wake of Covid many public transit agencies are hurting and may be looking for local funding to bridge the gap. The cleanest car trip is the one that never happens.

  • Your Next Car: Why not electric? Even Hummer has an EV coming out.

The short of is there is much to be optimistic about, not because these trends will resolve our climate woes, but because they show us that our strategies have worked when applied inconsistently and can be massively accelerated if we double down.

So, lets double down.

What is missing from this analysis? Whew.

  • Ideology versus Outcomes - Countries like Germany traded Nuclear for more Coal. Was that the right choice? Not every change in energy mix is obviously good or bad.

  • Sprawl - American land use and laws make driving a requirement for most people and drive a subsequently massive amount of CO2 emissions

  • Climate Justice - The adverse impacts of these trends - Poorer communities closers to power generation, West Virginia gutted by the coal collapse

  • Nuclear Power - Its a technology too, but the learning rate has been slower and the regulatory burden is much higher. Not everyone loves it. Should they?

  • Fusion - Its 20 years away… or is it?

  • Agriculture - A surprising percentage of emissions are… cow farts.

  • Carbon Capture - Can we close Pandora’s Box by sucking up Carbon?

  • Geo-Engineering - The Hail Mary Climate Option

  • And many other things

Recommended Reading

How to decarbonize America and the World

That’s a wrap

Had some thoughts on my conclusions, or questions? Do you feel more optimstic? Leave a comment and let’s chat about it.

Till next time ✌️,

Jóhann