If you think or write about alternative energy now, there is no doubt that you’ve got some Amory Lovins in your DNA. He’s like the Genghis Khan of the alt energy tribe; almost every one of us is sort of a descendent. Hell, he even got made into a comic book character (above) in the short-lived Energy Comics, a story described by its publisher Leonard Rifas in a 2007 paper.

Lovins is the kind of guy people love or hate. At 30, he became perhaps the most influential energy analyst in American history. Of course, when someone gets so spectacularly popular and powerful, their actual words tend to become obscured by what people think of them. They become a very convenient container for a packet of ideas that they may or may not actually hold. And that’s a very sad thing in Amory Lovins’ case because he’s a really fantastic writer and rhetorician.

That’s why it seems a goodly thing to blog my re-reading of his classic 1977 book, Soft Energy Paths. I have the feeling that many Lovins-haters will find themselves agreeing with him if they read his words. Nominal Lovins fans may find the opposite, too.

Three interesting backstory notes about this book before I begin the reading.

• It was published at a time when nuclear power had not ground to a halt in the United States and there was a very real possibility that breeder reactors — those that produce more fissionable material than goes into them — were going to form the backbone of the American energy system. This “plutonium economy” is the real target of the book. It is the hard path.
• The science of climate change was just beginning its long scientific slog towards gradual acceptance. Cutting down carbon dioxide is not part of Lovins’ central arguments.
• The meat of the book — and a famous Foreign Policy paper on which its based — were actually commissioned by Alvin Weinberg. He’s best known as the director of Oak Ridge National Laboratory and perhaps the greatest believer in nuclear power that ever was. In his 1994 memoir, he recalls that he and Lovins “become good friends, although in my reviews of Amory’s many books, I often attacked him for being so wrong-headed.” He also tells a quick anecdote about Lovins’ influence on American energy policy. The National Research Council ran a $4 million study (CONAES) in the early 1980s of American energy policy. When Weinberg asked the study’s leader who had more influence on U.S. energy policy, the director replied, “Amory, of course.”

The first time I read this book back a couple of years ago, I was mostly skimming it for old projects that I could add to my book. I wasn’t trying to really grapple with his arguments and I didn’t have the contextual knowledge I would have needed, anyway.

I should also say before we begin that I have a complex relationship with Lovins. I love his optimism, what Barbara Ward calls in the foreword, “the great merit” of his work: “he can convince both the citizen and the scientist that, beyond the great energy outburst, survival is not only possible: it may well be more safe and agreeable as well.” But I’m also prone to pessimism like energy researcher Vaclav Smil. Lovins thinks too much can be done too easily. The gains that can be made are more tightly circumscribed by history and habit than Lovins would have you believe. Smil:

My attitude to Lovins’s sermons has not changed during the past 25 years: I have always wholeheartedly agreed with many of his conclusions and ideas and parts of his and my writings, although informed by very different backgrounds are interchangeable. I share his quest for technical rationality, higher conversion efficiencies and reduced environmental impacts. I agree with many of his goals—but not with any of his excessive claims and recurrent exaggerations.

That’s much harsher than my own view of Lovins’ work. It seems to me that he defines the envelope of possibility while Smil sketches more probable but limited paths. Sometimes I feel like the two of them sit on my shoulders whispering in my ears as I work on my book. But neither of them is a devil or an angel, and they both can be useful and wise.

Ok, enough hemming and hawing. The reading will begin shortly. (Because some sections move through different ideas and writing transitions is hard, I’m going to put a little * when I’m changing tack to talk about something else in the book. That way you can also skip down if you’re reading it in pieces.)

*

Page 1. The very first line of the book, the heading of the first section is brilliant: TECHNOLOGY IS THE ANSWER! (BUT WHAT WAS THE QUESTION?). It sets up Lovins’ whole project, which he then quickly defines in opposition to the mainstream view: “The energy problem, according to conventional wisdom, is how to increase energy supplies (especially domestic supplies) to meet projected demands. As population in most industrial countries rises by less than a fifth over the next few decades, we are told that our use of energy must double and our use of electricity treble. Not fulfilling such prophecies, it is claimed, would mean massive unemployment, economic depression, and freezing in the dark.”

This is actually a pretty good statement of affairs. Those levels of energy use increases were, in fact, what analysts and utility executives were projecting with all the smug confidence that comes with a couple of decades of data behind them. It was nearly inconceivable that the situation could change. The U.S. uses about 100 quads of energy a year now. Most predictions from the 70s were more in the 160-190 quad range. (To get an idea for how amazing those projections were, imagine having two power plants for every one we currently have. And two cars for every one on the road, probably, too. And twice as many houses. We may think we live in a sprawled out, McMansion and SUV-loving profligate world, but that’s nothing compared to what those “in the know” were projecting.)

Looking at all these graphs and spreadsheets, Lovins asks, “But where do these ‘projected needs’ come from?” Then he provides a long “pungent” quote from Herman Daly:

Recent growth rates of population and per capita energy use are projected up to some arbitrary, round-numbered date. Whatever technologies are required to produce the projected amount are automatically accepted, along with their social implications, and no thought is given to how long the system can last once the projected levels are attained. Trend is, in effect, elevated to destiny, and history either stops or starts afresh on the bi-millennial year, or the year 2050 or whatever. This approach is unworthy of any organism with a central nervous system, much less a cerebral cortex.

*

Lovins next move is to show that the ability to build the systems to fit these linear projections is “rapidly grinding to a halt.” It was, he said:

• “politically unworkable” because of environmental concerns associated with the extraction of resources and subsequent energy production and use. People who “directly perceive the prohibitive social and environmental costs” of the system greet “these enterprises with a comprehensive lack of enthusiasm.”
• “technically unworkable” because “there is mounting evidence that even the richest and most sophisticated countries lack the skills, industrial capacity and managerial ability to sustain such a rapid expansion.”
• “economically unworkable” because “such free market mechanisms as still operate have persistently shown themselves unwilling to allocate to the extremely capital-intensive, high-risk supply technologies the money needed to build them.”

What’s interesting is that all three of these points are still furiously contested, particularly around nuclear power plants. I’d argue that the technical and economic arguments are stronger right now, as political opposition to many energy technologies comes not from those closest to the environmental costs, but those farthest away. It’s not the Gulf Coast that’s clamoring to stop drilling or even the people closest to nuclear plants that want to stop them from going in.

If you’ve been following the debate on loan guarantees for nuclear power plants, you know that the economic viability of the stations are still in doubt, but really, no one is quite sure how much it will cost to build a new plant in the U.S. or how long it will take. The variations in estimates are themselves even a cause for concern.

Then, here’s a characteristic Lovins reframing that’s just beautiful:

The basic tenet of high-energy projections is that the more enrgy we use, the better off we are. But how much energy we use to accomplish our social goals could instead be considered a measure less of our success than of our failure—just as the amount of traffic we must endure to get where we want to go is a measure not of well-being but rather of our failure to establish a rational settlement pattern.

It’s deceptively simple, but really, this is taking on the entire literature of the power industry from 1900 to, well, now. What was called the “grow-and-build” strategy was the official policy of most utilities, as brilliantly and sympathetically explored by historian Richard Hirsh in his book Technology and Transformation in the American Electric Utility Industry. In 1944, the chairman of the Tennessee Valley Authority held that “the quantity of electrical energy in the hands of people is a modern measure of the people’s command over their resources and the single best measure of their productiveness, their opportunities for industrialization, their potentialities for the future.”

Access to power really is important, and even in 1937, a National Resources Committee, still found it relevant to measure the “power available” to Americans. For most of the country’s history, people had just a couple of horsepower available to them to do work. Now, the power available to them was essentially unlimited.

Engineers thought they were doing some good! They “saw themselves,” this is Hirsh again, “as stewards of technological and social progress who enhanced the public’s welfare.” The National Academy of Engineering voted The Grid as the number one engineering achievement of the 20th century. And for decades, utility executives were able to build bigger and bigger plants while pushing down the kilowatt hour cost for consumers. The way they saw it, their work helped defeat the Nazis and provided the industrial arsenal that held the Soviet menace at bay.

Then here comes this Lovins guy telling them that the amount of power they produce isn’t a measure of their success but of their failure! It is not entirely surprising that he was received with hostility and sometimes downright hatred.

*

Lovins surveys the energy landscape in the post oil embargo world of the mid-70s. What’s happened he says, is that “energy, for so long treated as a free good, can no longer be taken for granted, but will become much more expensive no matter what we do. It must now be economized, much as we have economized on costly labor in the recent past. OPEC oil is a bargain, and except for possibly short-term fluctuations we shall not have large amounts of energy so cheaply again.”

We’ll talk about that statement in a second, but here Lovins slips a second paragraph under the first, pointing out “serious structural problems” in the industrial nations: “centrism, vulnerability, technocracy, repression, alienation, and the stresses and conflicts they bring.” Those “social and political problems” seemed to Lovins “a sufficient reason to seek new approaches to the energy problem.”

Then we get to his famous two paths: “This book is devoted to a comparison of two energy paths that are distinguished ultimately by their antithetical social implications.” And for those that argue that the cold, invisible hand of economics will steer people away from the preferred social path, Lovins responds, “surprisingly, a heroic decision does not seem necessary in this case, because the energy system that seems socially more attractive is also cheaper and easier.”

There’s a lot going on beneath Lovins’ smooth prose. Two different reasons are posited for changing the energy system, and they become entangled in a way that may ultimately by fallacious.

The first reason is hard and inevitable, the “inexorable laws of nature” of declining resource extraction catching up with us. The end of cheap energy had reached its end, Lovins argued. But then it turned out it hadn’t, actually. In 1999, I was driving a Ford Escort ZX2 and paying $0.99 per gallon at the Circle K off Exit 14 on I-5 in Washington State. Everyone forgot about “the end of cheap energy” because they were pumping it into their SUVs.

With oil that cheap and coal prices low, the socially attractive energy scheme he liked wasn’t cheaper and was only debatably easier.

Generally, I’m run into this a lot with the 70s deep energy thinkers. They used rising energy prices as a Trojan horse for all sorts of social and political arguments. Lovins links energy to “centrism, vulnerability, technocracy, repression, alienation” but he leads with the end of cheap energy. It’s stronger to rest on inevitability than political will, I suppose, but when that inevitability turns out to be false, the argument crumbles.

This is something that Lovins might have known from his work deconstructing utility projections. The same types of forecasting errors — or really, just forecasts because they are all wrong — led many environmentalists, Lovins included, to conclude that the era of “cataclysmic wealth” was over. The firmness of their conviction and miss on that score continues to haunt anyone who wants to talk about resource scarcity now. Maybe high oil prices and gas lines were necessary to create a popular movement for energy system change, but in playing the inevitability card, 70s alt energy advocates hurt their chances at being taken seriously 30 years later when similar problems are creeping up on us. The world surprises us and we should take that into consideration when arguing that something must happen. Unfortunately, energy arguments work exactly the opposite way. We might as well begin fights over nuclear power or oil or coal by saying, “May the most inevitable inevitability win.”

In any case, Lovins had a lot going for his social and political arguments without the price of energy stuff. He appealed to mainstream political and social values like democraticization and self-reliance, themes which have resonated with the people of this country down through the centuries. Lovins exposed that lurking within the carefully crafted projections of 7% growth in electricity per year, there was a social argument, an argument about the way America should be. When he rendered the visions of the technocratic utility executives in plain English, and asked his fellow citizens, “Is this what you want?” many of them answered, “Hell no!”

This is just a hypothesis, but it seems to me that any political or social movement to change the way we make and use energy will have to be robust to energy price movements. It will have to be embedded in a firm social sense of where we want the country to go and the development of infrastructure, institutions, laws, and technologies that get us there. I was inspired last night by this grassroots Los Angeles bike lane plan. What I love about it is how tactical the blog post’s author is about what victory will take. He knows that to get a certain amount of pavement marked off for bikers, it’s going to take old-school politics and lobbying over years — and he’s willing to do it because if he wins, his life is enhanced by the infrastructure that he created. This is, to steal a line from The Breakthrough Institute, “the politics of possibility.” Last night, without thinking about it much, I tweeted, “Infrastructural possibility can create political will.” And in the light of morning, I’m excited by that idea anew: build movements around concrete things, like actual concrete formed from cement and gravel, not just firm conviction.

*
Lovins popularized the idea of matching the needs of the end use (say, space heating) with the type of energy input. While in the 19th century, different fuels and machines were used heat, light, and power, the arrival of electricity — sometimes called the “universal power” — began to obscure those differences. Lovins and his ilk brought back the idea with a vengeance. “How much primary energy we use—the fuel we take out of the ground—does not tell us how much energy is delivered at the point of end use (the device that does the kind of work we desire), for that depends on how efficient our energy supply system is.”

This allows Lovins to unlink primary energy use with “well-being.” That’s an incredibly important move, and one that distinguishes him from a lot of other energy people.

It also lets him concentrate on “the conversion and distribution losses that rob us of much delivered end-use energy.” Because so much is lost in conversion and distribution from large facilities, this analysis argues for decentralization of power plants.

It’s true that even the best coal plants, say, only convert 40% of the heat value of the coal they burn into electricity, subtract a few more percent for transmission long-distances and local distribution, and you can see his point. We generate a lot more heat than we get out electricity.

But I’ve always had the intuition that perhaps Lovins’ analysis — and the many identical arguments made down through the years — lets small end-users off the hook while holding the quantifiable large power plants accountable. Again, looking back to the early 20th century, when many people ran their own coal boilers in places like Chicago and Pittsburgh, it was very difficult to get all of them to keep their boilers running efficiently. If they didn’t, the boilers belched out smoke, which called an entire environmental movement into being to fight “the smoke nuisance.”

So not only do you need to get people matching up their energy inputs with their end-uses but you have to bank on them creating efficient systems. You know, we have a system that works like that now: cars. While power plant efficiencies have gone up, fuel efficiency — driven partially by lack of regulation and partially by consumer choices — has been pretty flat since the early 90s.

I’m not saying that’s right, but I am saying that pushing the responsibility for technical efficiency down to rank-and-file consumers may not yield the results that Lovins is after. That type of rationality is not always or even generally a part of consumer behavior.

*

Lovins lists his “worldview” in 12 easy to follow points. Perhaps the most interesting bit is his succinct statement: “the energy problem should not be how to expand supplies to meet the postulated extrapolative needs of a dynamic economy, but rather how to accomplish social goals elegantly with a minimum of energy and effort, meanwhile taking care to preserve the social fabric that not only tolerates but encourages diverse values and lifestyles.”

*

The specter of the nuclear future looms in section 1.4 of the book. “Thus nuclear power, as Walter Patterson puts it, is not a yes-no question, but an either-or question: Do we have it, or do we instead have the other systems with which it competes for our resources?” With the benefit of hindsight, it’s interesting to see that we have neither the hard or soft path. Nuclear power was staggered but softer technologies didn’t replace its proposed contribution; industrial efficiency, coal, natural gas, and oil did. There are a lot of reasons for that (that’s what my book’s about ultimately) but for now, let’s just treat that as a fact. The choice turned out to be neither/nor.

We can also see now that having nuclear power plants running for decades hasn’t destroyed American liberty or anything. It’s hard to even say they are the riskiest power plants operating right now, given the issues with coal.

*

The concrete proposal that gets the most attention in the introduction is the introduction of a Federal fuel tax, which would let us “smoothly anticipate the inevitable price rise rather than having to swallow it all at once later when we are less well prepared for it.” He argues that this is basically a “depletion allowance backwards,” in reference to the tax break given to oil companies for pumping oil. This tax, recently resuggested in various forms, “would work through the economy and be reflected automatically in the price of goods and services in proportion to their direct and indirect energy content.”

Note that this is basically the idea behind a carbon tax, too, but because climate change wasn’t a frontline issue, Lovins goes straight to the heart o the matter: let’s tax fuel use, straight up. The only difference with a carbon tax is that it would provide less disincentives for burning cleaner fuels.

*

Lovins has an interesting quarrel on the evaluation of different types of technologies.

“Technologies that are complex, glamorous, and backed by powerful constituencies are given lavish subsidies, subventions, bailouts, and exemptions from paying their own environmental and social costs, while technologies that are simple mundane and less endowed with wealthy lobbyists are subjects to a far more rigorous set of economic tests and requirements.”

His language here implies that this is obviously nuts and due only to political hackery. But there is a reason that high-tech alternatives are attractive: hope! Early-stage technologies improve in a variety of ways, so it may make sense to throw money at complex technologies like photovoltaics because they could get a lot better faster, eventually opening up new pathways to clean, cheap energy. Well-known technologies using well-known materials cost what they cost. Is it a good idea to deploy them? Sure, if there are economic or environmental reasons, but you can’t expect to get a lot more out of your investment than you put in. There’s no speculative play in the deal.

Take Exxon’s foray into alt energy in the 1970s, the Solar Power Corporation. Along with other researchers, they drove the price of photovoltaics from $100 per watt to about $10 per watt. In so doing, they brought the cost of solar down enough to find an actual marketplace in far-flung locations like oil rigs. It may not have been a large market, but it was big enough to keep companies interested in competing and developing the technologies further. In fact, the cost savings that came in the years following the big cost reductions of the first half the of the 1970s proved to be of a different kind than what Burman was able to do so quickly.

University of California Berkeley energy researcher Gregory Nemet found that the two largest factors in cost cutting between 1975 and 2001 were increases in the efficiency of modules in converting sunlight into electricity and capturing the economies of scale that come with building bigger plants. While scientific research may have continued to improve efficiencies without a market for photovoltaics, the scaling effects were made possible by the deep price drops brought about by the Solar Power Corporation and a select few other companies.

This is the promise of technological development. Advances lead to price drops, which encourage scaling and more research, which leads to more price drops, and so on and so forth.

*

What Lovins is best at is highlighting what supposed “realists” views actually mean over the long-term. He is excellent at poking holes in status quo thinking. For example, on page 22, he nails it:

“Critics who say a soft energy path is unacceptable because it must change lifestyles are implying that they themselves favor no change in lifestyle even over fifty years. This implies a static, zero growth economy with no technical or social progress—presumably not what they have in mind,” he writes. “What they probably mean is that they desire no change in certain highly selective patterns and rates of change in lifestyle that they consider agreeable for themselves and appropriate for other people. That is a very different matter.”

See how he turns a seemingly plain-sounding, dull, bureaucratic response — “we can’t change people’s lifestyles” — into an explication of what that means. Of course governments and politics shapes people’s lifestyles! And if we can do that, let’s shape them for the environmental good and not for the bad.

*

In the conclusion to his introduction, Lovins shows his incredible optimism. His “soft path offers advantages for every constituency,” he argues.

a soft path simultaneously offers jobs for the unemployed, capital for businesspeople, environmental protection for conservationists, enhanced national security for the military, opportunities for small businesses to innovate and for big business to recycle itself, exciting technologies for the secular, a rebirth of spiritual values for the religious, traditional virtues for the old, radical reforms for the young, world order and equity for globalists, energy independence for isolationists, civil rights for liberals, states’ rights for conservatives.

Whew. Who could possibly oppose such a plan? There was something for everyone! At a time when the nation was scrambling for an identity, that must have been some kind of promise. Here was salvation and unity of purpose. Unfortunately, the plan also seems like one in which support is a mile wide and an inch deep. Sure, there’s something for everyone, but not much for anyone except those who wanted a radical overhaul of the energy system and the end of nuclear power. For them, it was a jackpot.

*

In chapter two of the book — page 25, if you’re following along at home — Lovins unleashes what his plan is.

“The second path combines a prompt and serious commitment to efficient use of energy, rapid development of renewable energy sources matched in scale and in energy to end use needs, and special transitional fossil fuel technologies… It does not try to wipe the slate clean, but rather to redirect our future efforts, taking advantage of the big energy systems we already have without multiplying them further.”

This sounds a lot like what green technologists are saying now, right? It’s realistic and smart. But wait, there is something that people don’t talk a lot about now: “matched in scale and in energy to end use needs.” We’ll get to talk more about this in the following pages, but Lovins’ was not sold on electrification. He calculated on page 39 that we only need “high-quality” electricity for 8 percent of end-use tasks. The continued rise of electronics has probably shifted that number upwards a bit. (Note to self/commenters: what is that number now?)

Lovins’ emphasis on de-electrification is not widely shared by most green technologists these days. I think we’ll see why in the following pages.

*

“Section 2.2: Hard Energy Paths” is one of Lovins’ most impressive. Here is where his ability to render the corporatespeak into plain reality becomes clear. He ticks off what would be necessary to satisfy the sky-high projections of demand just through 1985: 900 new oil wells, 170 new coal mines, 180 new coal plants, 140 new nuclear plants, 350 gas turbines… Then to get to the year 2000 the number get even larger: 450-800 nuclear reactors, 1000 to 1600 new coal mines, 15 million electric automobiles, etc.

It’s astounding and as he describes in 2.3, the energy industry alone would have required almost 75% of all the “net private domestic investment” from 1976 to 1985.

His basic point is that building all of that stuff just would have been too expensive and that spending all of their money on expensive reactors would bankrupt the utilities. In fact, this almost did come true with several floating the idea of a Federal bailout in 1984, largely because of cost overruns at nuclear power plants.

He ends the section on an ominous note: “thus some [utilities] must now tell their customers that the current dollar cost of a kilowatt-hour will treble by 1985, and that two-thirds of that increase will be capital charges for new plants.”

But what’s interesting is that while electricity prices did rise, they peaked in 1982 and 1983 and remain about at their late 70s levels. Lovins might point out this partially because nuclear plant building stopped in the mid-1980s. But capacity factors at nuclear plants also improved mightily — that means that the plants run much more often than they used to. The Nuclear Energy Institute gloats, “The average capacity factor for U.S. plants in operation in 1980 was 56.3 percent; in 1990, 66 percent; and in 2008, 91.5 percent.” The more often a plant can run generally speaking, the cheaper the unit cost of the power it produces.

My first contribution is up at Lapham’s Quarterly’s Déjà Vu blog, where I’ll be contributing a post or so a week. The format is to take some new(sy) thing and pair it with some old bit of text. It’s a great concept. Contributing to its success makes me happy.

The post deals with the way cities like Chicago dealt with “The Smoke Nuisance,” caused by crappy boilers sending soot spewing onto their neighbors’. The gradual elimination of the worst of the nuisance provides a positive blueprint for progress in Copenhagen. (I can’t bear to call it Hopenhagen. As city nomenclature adjustments go, it’s as bad as ‘Frisco and worse than HelLA.) The most extreme on the polluting and anti-polluting sides were wrangled, so that policy, technology, and enforcement could work their beige magic.

The Bureau of Smoke Inspection, led by F.U. Adams (among others), convinced the users of dirty energy that it was actually in their own self-interest to go clean(er). That’s the type of argument Barack Obama is making when, borrowing a line from John Doerr, he argues climate legislation “will finally make renewable energy the profitable kind of energy in America.” He’s not trying to hurt businesses or take away their profits — nothing socialistic like that — he’s just trying to shape their behavior to eliminate the CO2 nuisance. Maybe such a thing will even work. Here’s F.U. Adams’ positive report, courtesy of Google Books.

Viewed from the standpoint of the Smoke Inspector, the 1,600,000 people of Chicago are divided into two classes—First, those who create a smoke nuisance; Second, those who are compelled to tolerate a smoke nuisance. One class has radical champions who maintain that smoke is an irrepressible necessity; a concomitant of the commercial and manufacturing supremacy of Chicago; that smoke not only is not unhealthy, but that it is an actual disinfectant, and that the low death rate of the city can be largely attributed to the prevalence of smoke; that the smoke ordinance and its enforcement are aimed at the interests of the Illinois coal operators; that the advocates of smoke abatement are visionary sentimentalists, and in a general way they are emphatically opposed to any agitation on the subject.

The other side has partisans no less radical, and equally emphatic in voicing the story of their wrongs. They declare that the enforcement of the smoke ordinance is a farce; they demand that soft coal be excluded from the city; they insist that its consumption entails an annual damage greater than the difference in cost between soft and hard coal; they declare that the smoke nuisance is a positive menace to the health of citizens, that it has resulted in an alarming increase in throat, lung and eye diseases; they point to ruined carpets, paintings, fabrics, the soot-besmeared facades of buildings and to a smoke-beclouded sky, and demand that the Smoke Inspector do his plain duty under the law.

It is impossible to reconcile the radical partisans of these two classes. It is fortunate that not many of our citizens are so radical on either side of this most important question. There exists a growing contingent, around which is crystallizing a sentiment that it is practical and possible to abate the smoke nuisance without endangering the stupendous interests involved. The most intelligent and active members of this contingent are drawn from the ranks of those formerly largely responsible for the smoke nuisance. They now oppose smoke for the same reason that they once defended it.

They have made the discovery that it is cheaper to abate a smoke nuisance than to maintain one. And by reason of this discovery the smoke nuisance in Chicago will be a relic of the past before the close of the present century.

The industry suffered particularly badly in the credit crunch. Almost by definition, renewable energy sources have low running costs but high up-front costs. And because they are regulated assets with long-term pre-defined revenue streams, they are particularly suited to debt finance, and therefore tend to have high debt-to-equity ratios (typically 80-20). “When the project finance disappears, you’ve got a problem,” says Robert Clover, director of alternative-energy equity research at HSBC. He points out that some of the banks that suffered worst during the crisis—RBS, Lehman Brothers, Washington Mutual and Fortis—were also among the biggest in clean-energy finance.

As the flow of finance to electricity generators dried up, so did the orders to equipment manufacturers. Mr Clover reckons that wind-turbine manufacturers’ order books so far this year are down by 55-60% on the same period in 2008.

But the problem was not just the shortage and cost of capital. The credit crisis also revealed a basic problem with the clean-energy business. Fossil fuels are, in terms of the energy they store, remarkably inexpensive to get out of the ground and sell. That makes dirty industrial processes irresistibly cheap—so long as they are not required to cover the costs of the pollution they cause. Companies cannot be expected to abandon them unless they get a clear signal from consumers or governments that it is in their financial interest to do so. And they are not getting such a signal.

This is a pretty classic analysis of the problems with green tech since the 70s. High up front cost. Dependent on using tax credits. Dependent on debt. And yet, if fossil fuel prices are high, they still look like a great investment.

What the economist leaves out is that fossil fuel prices rise and fall, sometimes very quickly. To borrow the language of the knock on renewable energy production, the cheapness of oil and coal is intermittent.

In order to provide energy cost stability, it makes sense to include sources that do not depend wholly on oil, natural gas, and coal prices. They are a natural hedge for an uncertain future in which the geophysical reality of declining oil production and climate change will become increasingly apparent.

(Thanks to Geoff Manaugh.)

“So what does that mean?” asked @lostkiwi. “White males are the only ones rational enough to know nuclear power’s a good thing?” Others responded with takes less favorable to the white men out there. Karen Daltin Beninato called it the “Homer Simpson factor.”

Here’s my thought on it. Even though polling always strikes me as somewhere between art and dark art, I do think this one highlights a key aspect of how Americans look at nuclear power.

First, I’m going to posit that most people bring their social beliefs to energy, not the other way around. It’s the rare bird whose social beliefs grew out of the study of electrons. So, the debate over something like nuclear power for most people is a subset of a general debate about that other kind of power.

Nuclear power, by its nature, has to be centralized and well-guarded, so we don’t know everything that’s going on at the nation’s atomic facilities. What that means is nuclear power requires citizens to trust the industrial order to do what’s right by society. It requires faith that the engineers and executives who build and run nuclear plants will do the right thing — and if some unexpected thing goes wrong, they’ll tell us about it, even if it hurts their profits or reputations.

White males have been in control of their/our (I’m half-Mexican) political destinies since the country coalesced. White men built the industrial order. White men also built the bomb and the first nuclear reactors. White men also run the companies who construct and operate the nuclear power plants.

Is it any surprise that white men trust the structures that they control?

Meanwhile, other groups have had less access to power. At times women and minorities have been systematically discriminated against. At the very least, few hold high-ranking positions at General Electrics, Bechtels, and utilities that stand to gain from more use of nuclear power. Not to single GE out, but there are seven women and maybe two minorities on the company’s 44-person executive page.

Perhaps it’s not surprising that women and people of color would have more trouble accepting the beneficence of the white male-dominated industrial order?

Nuclear proponents have failed to grasp that all the studies about nuclear safety in the world don’t mean a thing to the people who don’t believe that the books are honest and uncooked. Instead, nuclear fans just keep saying, “Trust us, it’s safe!” in different ways.

And, apparently, only a majority of white men are willing to believe that.

• Everybody Loves Solar Energy, But… – The New York Times
  “The remaining 10 percent Federal energy tax credit is due to expire on Dec. 31, but Congress is considering a bill that would extend it for five years. Many legislators, however, see the measure as an unnecessary tax break for Luz’s power-plant investors. ”I don’t know why we have to be loading up a lot of tax benefits for otherwise profitable operations,” says Rep. Pete Stark (D-Calif.). To the argument that Luz produces clean, nonpolluting energy, Stark responds: ”So do squirrels running a treadmill. It’s a question of how much you want to subsidize the squirrel-breeding industry.”
  (tags: SEGS Luz taxes)
• Ocala Star-Banner
  Very nice article reported by LA Times on SEGS.
  (tags: SEGS Luz)
• JewishEncyclopedia.com – LUZ:
  There are so many layers of meaning to the word Luz. It’s tremendous.
  “Legend invested the place with miraculous qualities. “Luz, the city known for its blue dye, is the city which Sennacherib entered but could not harm; Nebuchadnezzar, but could not destroy; the city over which the angel of death has no power; outside the walls of which the aged who are tired of life are placed, where they meet death”
  (tags: Luz SEGS ArnoldGoldman)
• Jerusalem Post Q&A with Arnold Goldman
  “And in the historic Luz, we had a collection of people who were trying to create a better world, while developing a good company and making a good living. At that time, we had a peak number of 500 people working for us in Israel. Over the years, we kept in close contact. And even though many of them are well-positioned, and some of them by now have their own companies, the idea of coming back together to finish what we’d started was electrifying. Indeed, a lot of people came back and put in so much know-how and capability into the organization that we were able to go out to the financial world and bring in [venture capital company] Vantage Point as a first investor. This enabled us to attract other prestigious investors, which gave us our start, and enabled us to bring in the historic team, as well as
  new talent.”
  (tags: SEGS ArnoldGoldman Luz)
• Luz Also Rises (Extract) | Jerusalem Post
  A great, big article on Arnold Goldman telling the story from bottom to top.
  (tags: SEGS ArnoldGoldman solarthermal Luz)
• Charging ahead: the business of renewable energy and what it means for America
  Contains an extensive discussion of “A Working Paper on Project Luz” — the document that developed the philosophical underpinnings for Arnold Goldman’s Luz International. Also, an amazing sounding utopia.
  (tags: SEGS Luz)
• Rebuilding America: A National Policy Framework for Investment in Energy Efficiency Retrofits
  “Congress and the Obama administration have a historic opportunity to ensure that
  investments made in weatherization and energy efficiency as part of the recently passed
  American Recovery and Reinvestment Act evolve into a sustainable clean-energy retrofit
  program and a linchpin of the American economy for years to come.”
  (tags: efficiency, reports, CAP)
• Solar Eclipsed
  Long article using Luz bankruptcy to look at US solar energy.
  (tags: Luz SEGS ArnoldGoldman)

Image: flickr/ghostparticle. A real photo of a SEGS mirror field.

Finding energy inflection points is hard. You don’t know when you should be using recent trends or longer trends or whether something new altogether has come onto the scene. As noted here before, Vaclav Smil has done some devastating analyses of the energy projections that were made in the 1970s. All of the missed high and by a lot.

You can explain part of the big miss because of the intertwining of the nuclear power industry and the technocrats who were doing most of the institutional analyses of future energy demand. Taking the nuclear industry at face value, analysts were banking on rapidly dropping and very low prices for nuclear electricity. Lower prices, so says economics, generate higher demand. When the nuclear electricity prices didn’t drop, people used less energy. (Other, “soft path” analyses predicted far too much renewable energy would be online by now — although they were banking on a different set of government behaviors.)

Still, many different groups with a Y agenda try to get their particular X installed as the official version of the future. It’s a terrible way of making energy policy, but it does have the benefit of restricting the discussion about the future of energy to Excel spreadsheet jockeys and their masters. No one is arguing what “should” happen with energy policy, even though, in effect, they are. It’s entirely antidemocratic in both purpose and impact. When an outsider says, “Hey, maybe we should do this with energy policy,” they are often dismissed as a dreamer detached from the reality of the very serious situation.

It’s about time shoulds — normative scenarios — came into play. Energy is such a basic component of life and particularly post-industrial life, that more people need to have a say in how the system works. Ideas about energy usage have and will continue to drive how people use energy; it’s not only a matter of price over the long-term. And besides, no one has shown much talent for predicting the medium- or long-term price of any kind of energy, so why argue seriously over something unknowable?

What would a normative energy policy look like? Over many decades, there are many variables at play: increasing efficiency, dematerialization of some products, aging old power plants, declining oil fields, grid upgrades, new natural gas finds, continued derangement of hte atmosphere, continuing rapid integration of renewables, and water limitations. It’s a jumble of good and bad, the crosswinds are many and gusty. A better question is: what should we be aiming for?

Energyologist Vaclav Smil, of course, has looked into this. He found some pretty amazing things. According to his analysis of the standard quality-of-life parameters, there’s just no justification for using more than 110 gigajoules per person per year. That’s about a third of what we use here in the U.S., although our usage peaked in the late 70s and has wobbling downwards since.

“The quest for ever-higher energy use thus has no justification either in objective evaluations reviewed in this section, or in subjective self-assessments,” Smil wrote.

Up to that point, there are major gains in health, longevity, infant mortality, food supply, etc. Political and economic freedom aren’t well correlated with energy use, either, beyond extreme energy poverty.

“All of the quality-of-life variables relate to average per capita energy use in a nonlinear manner, with clear inflections evident at between 40-70 GJ/capita, with diminishing returns afterwards and with basically no additional gains accompanying consumption above 110 GJ/capita,” Smil concluded, with his characteristic airy prose.

Not only that, using a lot more energy than that could actually be detrimental to the health of the population because it is normally associated with excess food supply and decreases in human labor and work, in the physical sense of those words.

In a world where energy is becoming more scarce and coming in far less convenient packaging, we should consider how deeply linked we’d like our economy to be to consuming three times the amount of energy that a rational analysis says makes sense.

Image: flickr/Stuck in Customs

“We have no language at our command by which to convey to the minds of our readers any adequate idea of the agitated state at the time we saw [the well]. The gas from below was forcing up immense quantities of oil in a fearful manner and attended with noise that was terrifying… When the gas subsided for a few seconds, the oil rushed back down the pipe with a hollow, gurgling sound, so much resembling the struggle and suffocating breathings of a dying man, as to make one feel as though the earth were a huge giant seized with the pains of death and in its spasmodic efforts to retain a hold on life was throwing all nature into convulsions.”
Jim Burchfield, editor, Titusville Gazette, on seeing one of the first wells ever sunk

And so, with a series of scenes like this following the sinking of Edwin Drake’s first well, the age of oil began. It was 1859, exactly 150 years ago Thursday, that Drake’s great success occurred.

Drake, working with a local, simply pounded a hole in the ground with a heavy piece of metal attached to a rope threaded through a pulley to a steam engine. It took weeks of “chipping” to go the 59 feet where they struck oil. It would have happened without the narrative-friendly character of Drake, but it hadn’t, and the world hasn’t been the same since.

A western Pennsylvania river valley seems an unlikely place to go looking for momentous change, but the historical fact is that the Oil Creek valley, about 100 miles north of Pittsburgh, was the world’s very first oil field. From 1859 to 1873, this was the largest oil field in the world. During that time, 56 million barrels of oil came out of the ground.

Take note of the description of the stereograph above: “Source of the world’s most gigantic fortunes — pumping wells in the oil country — western Pennsylvania.” It took a few years to really get going and really only produced near capacity for half a decade, but it made millionaires. In just the six years from 1859-1865, $17 million was made in this backwater part of the country.

But as quickly as it flowed onto the world scene, Oil Creek valley went dry and everyone packed up and went home. Or to Texas.

Oil didn’t send cars zooming around or get turned into plastics back then. We just burned it in lamps as a replacement for a set of illumination alternatives that weren’t quite right for the task.

There was whale oil, but that was getting tougher to find. Whalers spent more and more months farther and farther away from population centers to fill up their barrels with bounty from the most majestic creatures in the world. And even if you killed a hundred whales, you were only bringing back a few hundred barrels of oil.

There was pig-derived oil, too, and gas made from coal. Brian Black, in his book, Petrolia from which the top quote comes, notes that there were already 56 coal-to-gas plants operating by 1850.

New lamps introduced in the 50s allowed allowed consumers to burn pretty much anything they wanted, decreasing the cost of switching fuels.

“Each illuminant helped bring light to darkness,” Black wrote. “However, each product left dramatic room for improvement. While each development functioned to lay groundwork for the rapid acceptance of petroleum upon its ‘discovery,’ the coal oil industry, which grew significantly in the United States during the 1850s, achieved a national distribution network that could be shifted most easily to other fluid energy commodities.”

So, there was a market and ecosystem awaiting the product that could fulfill “the divine potential of increasing time in the day.” Some people had discovered that “rock oil” could be distilled, just like whale oil, but it was too much of a pain in the ass to collect where it seeped up to the surface. People sometimes skimmed the crude from the surface of the waters where it naturally got stuck or sopped it up with blankets. (Some even used it as a tonic. They “drank freely of the water, which, by and by, ‘operated as a gentle purge.’”) Not exactly the way to go from rags to riches.

Drake’s well then, with its flowing petroleum, changed everything. It pumped money out of the ground.

While the Civil War raged, the development of the area was basically stalled, but as soldiers returned from the front lines, they went to rural Pennsylvania to hunt fortune. Instant towns popped up all over Petrolia: Titusville, Oil City, and especially Pithole. Distribution systems sprung up, too. Teamsters drove horse-carts lousy with barrels. Barges were loaded up to float down the rivers. Tank services arose.

Petroleum, long just a curiosity became, with admirable simplicity, money.

The stereographs below — taken over the couple decades after 1859 — show many of these events in progress. There are shots of new hotels and the tanks and the derricks, even the basic refineries. An incredible set of pictures testifies to the prevalence of “shooting a well.” This was and is the practice of putting explosives in a borehole to stimulate oil production by fracturing the rock down there. Word was, it let the oil flow more easily.

“A gentleman who has just called on us from Tarr farm, tells us that an experiment was made on the 21st, with one of Roberts’ Torpedoes in the ‘Bakery Well’ which has formerly pumped from 7 to 8 barrels per day. The production has continually increased. On the 27th it produced 60 barrels and yesterday the production was 100 barrels,” proclaimed the July 2, 1866 edition of the Titusville Morning Herald. “We wonder how the owners feel at the great difference in their balance sheet!”

The technique was pioneered by Colonel E.A.L. Roberts, whose corporate descendant wrote a stunning short history of its use in the Oil Creek valley. Apparently, it was quite a high-drama technology. You see, Roberts had patented it (as in the drawing) and anyone caught “moonlighting” by blasting their wells without paying the Roberts Petroleum Torpedo Company (!) was in serious trouble with its private police force.

Enjoy the stereographs below. They’re beautiful. The thumbnails will open each one in your main browser window; sorry about that, I’m just getting this Wordpress gallery thing down.

All of them are courtesy of the Robert Dennis Collection of Stereoscopic Views.

"Going to Petroleum Centre"

What Was a Farm is Now a (Oil) Field

Up Oil Creek Without a Paddle

Not All Roads Are Made Equal

An Instant Hotel, Like Mardi Gras Without the Parades

Oil City, Pennsylvania

A Railroad Bridge Supported by Derricks

Big Derricks, Little Man

Derricks Downslope

The Derrick Forest

Pumping, Close-Up

Filling a Shell with Nitroglycerine

Shooting a Well

That's A Lot of Barrels

Barrels Everywhere

Men Standing on Oil Tanks

A Lotta Oil Tanks

Cameraderie Among the Tanks

A Barge on Oil Creek

The Original Oil Tankers

The "Great" Western Refinery

What Looks Like a Fire

A Huge Smoking tank

Instant Towns Ain't Pretty

“In view of the fact that the earth in its natural state could hardly support more than about ten million food-gatherers, the maximum consumption of energy by humans in preagricultural times probably amounted to no more than the equivalent of about four million tons of coal annually.”

— Harrison Brown, “Energy in Our Future” from the 1976 Annual Review of Energy

Given that the U.S. uses about 1.1 billion tons of coal per year now, I began to wonder how total American energy consumption stacked up to our pre-farming ancestors total energy usage.

Four million tons of coal would have yielded about 90 million BTUs back in 1976. Americans use about 100 quadrillion BTUs of energy each year. So, do a little math, divide 100 quadrillion by 90 million, then divide by some time unit and voila: Americans burn through 90 million BTUs — what our hunter-gatherer ancestors used each year — in about 8 hours.

Hell, we burn four million tons of coal every 32 hours or so.

(This makes me think. Do we need a sort of fossil debt clock that counts up all the fossil fuel BTUs we’ve burned?)

Inventing Green Thoughts: There are two key things to note here. First, the SERI scientists were trying to push solar cell costs down to between 14 and 40 cents a watt (!), based on 1980 dollars. Second, they thought they could get there by the year 2000.

“Several significant advances in solar cell R&D have occurred over the past few years,” Kazmerski writes. “Those solar cell technologies that are expected to meet the long-term national goals (i.e., $0.14-0.40/peak-watt, based upon 1980 dollars, in the 1990-2000 time-frame) have demonstrated progress both in interediate efficiency (>10%) thin-film device, and the very-high efficiency (aimed at greater than 30%) concentrator areas.”

Turns out, they were just a bit off. The Solarbuzz retail price per peak watt survey has found prices varying between $4.56 and $4.88 over the last few years. Sure, some companies can make modules for less, but they are merely aiming for a buck or two a watt, not 14 cents!

It goes to show how little scientists really knew about the photovoltaic materials that they were working with.

Kazmerski cites a paper by Larry Magid on the U.S. National Photovoltaic Program in which Magid asserts that photovoltaics would become cost effective in the southwest by 1986.

“A key element in this program is the expectation that photovoltaic residences will begin to be cost effective within the Southwestern United States when modules are priced at 70 cents/peak watt and the total installed system costs from $1.6 to $2.20 per peak watt (in 1980 dollars),” Magid writes. “The program anticipates this occurring in 1986.”

SERI engineers were overly optimistic about photovoltaics’ potential to be cost competitive in the near term. Even if the Reagan administration had kept up or even increased R&D spend, it seems impossible in retrospect that prices could have dropped as much as they anticipated by 1986 or 1990 or 2000.

One key impact from this excessive optimism is that they could have privileged exotic technologies over plain old silicon hoping to get a big cost breakthrough. Silicon-advocate and long-time solar researcher, Georgia Tech’s (and Suniva’s) Ajeet Rohatgi put it best here on Inventing Green.

This is very interesting. This is good or bad for silicon. The good part is that we know silicon material very well. We know all the properties of silicon. But this sometimes ends up being a disadvantage for silicon because we know too much about it. We are not willing to give it the benefit of the doubt. If you look at where a lot of the investment is going, people will talk about 2% organic cells and say some day they will be 10-15%. Because people don’t know about those materials they are willing to give them the benefit of the doubt.

We see evidence of the home run mindset in the paper. Kazmerski doesn’t even mention the use of monocrystalline silicon, which is what Rohatgi’s company uses.

Ignoring the technologies that are actually closest to commercialization could end up being a general problem for those advocating that true breakthroughs are needed to push solar into a major component of the power mix. Instead of focusing on simple incremental technical advances and capturing scaling efficiencies for established technologies, they might direct funds to higher risk enterprises.

It’s possible that SERI’s approach makes sense, but only if it’s pared with realistic goals and outcomes.

Oh, and Larry Mazerski is still a leader in PV research. He stayed at SERI through the bad years and through the 90s after it became NREL. In fact, he now heads up the National Center for Photovoltaics. I’ll be trying to get a hold of him soon to talk about those early years.

Advances in Photovoltaics R&D – An Overview – 1981

Both graphs are from Pacific Northwest National Lab analyst James Dooley’s excellent report, “US Federal Investments in Energy R&D.” It’s these ridiculously low levels of research spending that make me wary of writing off any particular technology. Say carbon capture and sequestration or enhanced geothermal or wave power. The truth is that we haven’t put in the resources to know which technologies are a good idea.

Perhaps, given the top graph, we need a new measure of investment. Perhaps stealth bombers? They cost $831 million a piece in 2005 dollars ($530 million back in 1989).

If you’re doing the math at home — which I wasn’t doing very well, as Jason pointed out below — the cumulative budget for the DOE’s energy R&D program from 1961-2008 was about 215 stealth bombers. The annual energy R&D budget rarely exceeded $3 billion (in 2005 dollars), or not even enough change to build four bombers.