10Q Capitalism Saves Whales: Amory Lovins
Here’s a vision for the U.S. in 2050: No oil. No coal. No nuclear. Less gas. All for $5 trillion less than the projected business-as-usual energy spending.
Many would call this a pipe dream, but when such predictions come from Rocky Mountain Institute Chairman Amory Lovins, as they have since his groundbreaking 1976 essay in Foreign Affairs, they are backed by intellectual rigor. Lovins recently spoke with Bloomberg News energy and environment reporter Kim Chipman about the energy future he lays out in his new book, Reinventing Fire.
Q: How would you describe the present U.S. energy economy for someone whose most recent update was your 1976 Foreign Affairs article, “Energy Strategy: The Road Not Taken”?
A: In '76, industry and government agreed that the amount of energy needed to make a dollar of GDP could never go down. I heretically said it could go down several-fold and we'd make money on the deal. Well, it's gone down by half so far.
On renewables, however, our progress has lagged several decades. It's only now achieving the kind of take off that it should have achieved in the early '80s.
Q: What didn't you foresee back then?
A: The article assumed a supportive or at least neutral policy environment. It got a hostile one for almost the whole time. That’s why we are so far behind. But we can catch up if we stop tripping over ourselves and each other.
Q: How would you write the Foreign Affairs essay differently today?
A: We know enormously more now about what can be done with both efficiency and renewables. Early analyses had isolated examples that have now matured into major industries.
The renewable progress has been driven overseas by inconsistent federal policies, so that we are now importing many of the technologies that we developed.
Q: How does your concept of the light-weight "hypercar" fit your vision of a new 2050 U.S. energy economy?
A: If you take the weight and drag out of a car, it takes two or three times less energy to move. You take the obesity out of the car. Then you can afford to give it a really advanced power train. It's so much smaller, everything about the car gets better, including safety.
Q: UN climate talks have been at an impasse for years and put the public to sleep. Is that the best approach?
A: Enlightened self-interest, whether firms’ or nations’, is a lot easier to mobilize than international agreement -- particularly when the whole conversation is based on a sign error: It's about how much climate protection will cost, who should pay for it and is it worth it?
Saving fuel is cheaper than buying fuel, so climate protection isn't costly, but profitable.
Q: What frustrates you most about how average Americans live?
A: People typically don't have time to become energy experts. The way they understand it has to be really simple and transparent, not because people are dumb, but just to reduce the hassle factor. Most of us still are kept in the dark about how we are using energy.
Q: What are your thoughts on TransCanada's proposed Keystone XL pipeline through the U.S. and the oil sands in general?
A: We are going to see much the same story playing out that we saw in the 1850s, when most houses were lit by whale oil. Whales were getting shy and scarce. The price of whale oil was going up and getting more volatile. This elicited competition from oil and gas -- which at the time was made from coal. In the nine years before Drake struck oil in Pennsylvania, in 1859, over 5/6 of the market for whale-oil lighting went away to those competitors.
The whalers were set to run out of customers before they ran out of whales. Soon they were reduced to begging for federal subsidies on national security grounds.
Q: The lesson being…?
A: Whale populations were saved by profit-maximizing capitalists and technological innovators.
Q: What are your thoughts on the Solyndra bankruptcy and what it may mean for the U.S. solar industry?
A: It's an artificial political scandal with very little grounding in reality. Congress told the Department of Energy at the end of the previous administration to take risks that the private sector wouldn't take. One of those was trying to scale up production of more advanced American solar technology.
Q: Can the U.S. catch up with China on solar? Is it too late?
A: China is the world leader in five renewable technologies, aims to be in all. If we can stop shooting ourselves in the foot, or in the head, I think we could get back in the lead. It isn't that we lack technological advantage or capital or entrepreneurship.
Last year, congressional dithering cut U.S. wind installations in half while China blew past its 2020 wind power target. Over the past five years, the U.S. fraction of renewable electricity went from 9 percent to 10 percent.
We have a lot of catching up to do, and not only with China.