Good News: Energy Policy And The Innate Flaws Of Conservatism

Yesterday Gaius did a post about the rate of ice collapse in Antarctica. In light of that piece, I'd like to introduce you to an uncharacteristically good news post at Vice's Motherboard by Nafeez Ahmed, How Solar Power Could Slay The Fossil Fuel Empire By 2030. Please read it in the context of what Matt Cartwright (D-PA) is doing in Congress to combat the dangers of the fracking industry and what freshman Ted Lieu (D-CA) says his top priority is in Congress: "I am going to wake up every day thinking about how we can mitigate climate change, because if we don't solve the problem, it will eventually kill us."

Ahmed begins with a premise from Clean Disrution of Energy and Transportation, a new book by Tony Seba, a lecturer in business entrepreneurship, disruption and clean energy at Stanford University and a serial Silicon Valley entrepreneur: "In just 15 years, the world as we know it will have transformed forever. The  age of oil, gas, coal and nuclear will be over. A new age of clean power and smarter cars will fundamentally, totally, and permanently disrupt the existing fossil fuel-dependent industrial infrastructure in a way that even the most starry-eyed proponents of ‘green energy’ could never have imagined... By his forecast, between 2017 and 2018, a mass migration from gasoline or diesel cars will begin, rapidly picking up steam and culminating in a market entirely dominated by electric vehicles (EV) by 2030." I'll take it! 

Not only will our cars be electric, Seba predicts, but rapid developments in self-driving technologies will mean that future EVs will also be autonomous. The game-change is happening because of revolutionary cost-reductions in information technology, and because EVs are 90 percent cheaper to fuel and maintain than gasoline cars.

The main obstacle to the mass-market availability of EVs is the battery cost, which is around $500 per kilowatt hour (kWh). But this is pitched to fall dramatically in the next decade. By 2017, it could reach $350 kWh-- which is the battery price-point where an electric car becomes cost-competitive with its gasoline equivalent.

Seba estimates that by 2020, battery costs will fall to $200 kWh, and by 2024-25 to $100 kWh. At this point, the efficiency of a gasoline car would be irrelevant, as EVs would simply be far cheaper. By 2030, he predicts, “gasoline cars will be the 21st century equivalent of horse carriages.”

It took only 13 years for societies to transition from complete reliance on horse-drawn carriages to roads teeming with primitive automobiles, Seba told his audience.

Lest one imagine Seba is dreaming, in its new quarterly report, the leading global investment firm Baron Funds concurs: “We believe that BMW will likely phase out internal combustion engines within 10 years.” (Investors at rival bank Morgan Stanley are making a similar bet, and are financing Tesla.)

Two days after his JP Morgan lecture, Seba was addressing the 2014 Global Leaders’ Forum in south Korea, sponsored by Korean government ministries for science and technology, where he elaborated on the prospects of an energy revolution. Within just 15 years, he said, solar and wind power will provide 100 percent of energy in competitive markets, with no need for government subsidies.

Over the last year Seba has even been invited to share his vision with oil and gas executives in the US and Europe. “Essentially, I’m telling them you’re out of business in less than 15 years,” Seba said.

For Seba, there is a simple reason that the economics of solar and wind are superior to the extractive industries. Extraction economics is about decreasing returns. As reserves deplete and production shifts to more expensive unconventional sources, costs of extraction rise. Oil prices may have dropped dramatically due to the OPEC supply glut, but costs of production remain high. Since 2000, the oil industry's investments have risen threefold by 180 percent, translating into a global oil supply increase of just 14 percent.

In contrast, the clean disruption is about increasing returns and decreasing costs. Seba, who dismisses biomass, biofuels and hydro-electric as uneconomical, points out that with every doubling of solar infrastructure, the production costs of solar photovoltaic (PV) panels fall by 22 percent. “The higher the demand for solar PV, the lower the cost of solar for everyone, everywhere,” said Seba. “All this enables more growth in the solar marketplace, which, because of the solar learning curve, further pushes down costs.”

Globally installed capacity of solar PV has grown from 1.4 GW in the year 2000 to 141 GW at the end of 2013: a compound annual growth rate of 43 percent. In the United States, new solar capacity has grown from 435 megawatts (MW) in 2009 to 4,751 MW in just four years: an even higher rate of 82 percent.

Meanwhile, solar panel costs are now 154 times cheaper than they were in 1970, dropping from $100 per watt to 65 cents per watt.

What we are seeing are exponential improvements in the efficiency of solar, the cost of solar, and the installation of solar. “Put these numbers together and you find that solar has improved its cost basis by 5,355 times relative to oil since 1970,” Seba said. “Traditional sources of energy can’t compete with this.”

...[I]ncreasing efficiencies and plummeting costs of lithium ion (li-on) batteries are already making night-time residential storage of PV and wind power cost-effective. Every year, li-ion battery costs drop by 14-16 percent. By 2020, experts believe that li-on will cost around $200-250 per kilowatt per hour (kWh) in which case, according to Seba: “A user could, for about $15.30 per month, have eight hours of storage to shift solar generation from day to evening, not pay for peak prices, and participate in demand-response programs.”

At the current rate of growth, Seba’s projections show, globally installed solar capacity will reach 56.7 terrawatts (TW) in the next 15 years: equivalent to 18.9 TW of conventional baseload power. That would be enough to power the world, and then some—projected world energy demand at that time would be 16.9 TW.

Paul Gilding, who has spent the last 20 years advising global corporations like Ford, DuPont, BHP Billiton, among many others on sustainable business strategy, agrees that the trends Seba highlights imply “a disruptive transformational system change” that outpaces the “assumptions built on the old world view of centralised generation.” Author of The Great Disruption, Gilding said that “it’s the systemic interactions of software, new players, disruptive business models and technology that accelerates the shift,” and which “will be self reinforcing”-- not just cheap prices.

...While solar  has already reached ‘grid parity’, becoming as cheap or cheaper than utility rates in many markets, within five years Seba anticipates the arrival of what he calls ‘God Parity’: when onsite rooftop solar generation is cheaper than transmission costs. Then, even if fossil fuel plants generated at zero costs (an impossibility), they could never compete with onsite solar. So after 2020, the conventional energy industry will start going bankrupt.

The costs of wind, which complements solar at night and in winter, is also plummeting and will beat every other energy source, except solar, in the same time-frame, according to his analysis.

“We are on the cusp of the largest disruption of industry and society since the first industrial revolution. Large, centralized, top-down, supplier-centric energy is on its way out. It is being replaced by modular, distributed, bottom-up, open, knowledge-based, consumer-centric energy,” said Seba. “The transition has already started and the disruption will be swift. Conventional energy sources are already obsolete or soon to be obsolete.”

Conservatives will continue fighting against this scenario, as they have fought against every single step forward since the beginning of time. That's how they get their name "conservatives." And ultimately they always lose. Now it's just a matter of how much damage they will cause the rest of us-- and if they cause so much damage that they finally make the planet uninhabitable.

A Different Approach To Making America Work: Cars

Today Republicans are angry that Obama didn't fail & that the auto bailout worked

There was a lot of celebrating in Detroit yesterday-- not to mention at the White House-- when it was announced that Chrysler had repaid, with interest, the $5.9 billion loan it got from the U.S. Treasury to keep afloat. “The loans gave us a rare second chance to demonstrate what the people of this company can deliver,” Chrysler CEO Sergio Marchionne said. “We owe a debt of gratitude to those whose intervention allowed Chrysler Group to re-establish itself as a strong and viable carmaker.” That would be President Obama + 205 Democrats and 32 House Republicans. The Auto Industry Financing And Restructuring Act passed 237-170 on the evening of December 10, 2008. Led by Boehner and Cantor, 150 Republicans (+ 20 sleazy Blue Dogs, most of whom were defeated in the next election) voted against rescuing the auto industry. Don't they look foolish today?


The total Chrysler returned to the Treasury, including interest and other loans, was $10.6 billion-- which represents a full recovery of all the money the Obama Administration put towards rescuing the company and saving all the jobs, ancillary businesses and communities involved-- six years ahead of schedule. And this comes just a few weeks after GM’s announcement of a $2 billion expansion, which will result in the creation or retention of 4,000 jobs spread across 17 facilities in eight states. We’re starting to see second shifts and stronger sales all across the country. In Michigan, as well as in Indiana, Pennsylvania, and Missouri, since GM and Chrysler emerged from bankruptcy, the auto industry has added 115,000 jobs-- the fastest pace of job growth in the auto industry since the 1990s. This is what President Obama said just about one year ago (April 30, 2009):

"Chrysler has not only been an icon of America's auto industry and a source of pride for generations of American workers; it's been responsible for helping build our middle class, giving countless Americans the chance to provide for their families, sending their kids to college, saving for a secure retirement. It's what hundreds of thousands of autoworkers and suppliers and dealers and their families rely on to pay their bills in communities across our industrial Midwest and across our country."

That didn't appeal to Republicans and notorious vulture-capitalist Mitt Romney led the way with a horrific editorial in the NY Times just before the House vote: Let Detroit Go Bankrupt. Americans today can see how wrong he was in 2008 when he wrote that "If General Motors, Ford and Chrysler get the bailout that their chief executives asked for yesterday, you can kiss the American automotive industry goodbye. It won’t go overnight, but its demise will be virtually guaranteed." Because Romney's nasty and predictable anti-worker message was widely ignored, the auto industry is getting back on its feet today and helping lead the nation out of the Bush-Republican Recession. Romney, who is best known in American politics as the ultimate values-free flip-flopper is trying to re-write history today-- but the NYTimes caught him red-handed:

In 2009, Mr. Romney said Mr. Obama’s plans for rescuing the automobile industry were “tragic” and “a very sad circumstance for this country.”

A Romney spokesman said on Tuesday that the president’s plan was modeled after one Mr. Romney advocated in 2008.

“Mitt Romney had the idea first,” said Eric Fehrnstrom, a Romney spokesman, citing the Times opinion article. “You have to acknowledge that. He was advocating for a course of action that eventually the Obama administration adopted.”

...“Mitt Romney must think that the entire country has fallen into a state of amnesia if he believes he can get away with this revisionist history,” said Brad Woodhouse, a spokesman for the Democratic National Committee. “The record is clear. Mitt Romney would have let G.M. and Chrysler go bankrupt without extending them a dime of federal assistance.”

Democratic officials noted that Chrysler and General Motors received the federal aid only after they entered bankruptcy — not before, as Mr. Romney’s spokesman asserted.

And they said the bankruptcy’s success depended on the federal money.

“Mitt Romney is doing circuslike contortions to get out from under the damaging words he uttered in 2008,” said Jennifer M. Granholm, a former Democratic governor of Michigan.

Here's what the President said yesterday, Republicans still jeering his decision to save the American auto industry:

Chrysler’s repayment of its outstanding loans to the U.S. Treasury and American taxpayers marks a significant milestone for the turnaround of Chrysler and the countless communities and families who rely on the American auto industry. This announcement comes six years ahead of schedule and just two years after emerging from bankruptcy, allowing Chrysler to build on its progress and continue to grow as the economy recovers. Supporting the American auto industry required making some tough decisions, but I was not willing to walk away from the workers at Chrysler and the communities that rely on this iconic American company. I said if Chrysler and all its stakeholders were willing to take the difficult steps necessary to become more competitive, America would stand by them, and we did. While there is more work to be done, we are starting to see stronger sales, additional shifts at plants and signs of strength in the auto industry and our economy, a true testament to the resolve and determination of American workers across the nation.

Chrysler's sales rose 22.5% in the first quarter, ahead of the overall auto industry, which was up by 19.6%. Chrysler made a profit of $116 million in the quarter, their first since 2006, when Republican economic policies had started to kick in and devastated the auto industry and the entire economy.