we’re not doing anything.” And another set of countries that said, “We’re going to develop our economy, screw you.” And fundamentally the first set of countries said to the second, “No, no, come on. Pretend, just like we do. Do you see us hurting our economies? No, of course not. It’s not going to be a big deal.” Because I can’t really point at any action of the U.S. government, even in the Obama administrations, which were behind it. Where was the teeth in it? Where was the enforcement? Where was there anything that would actually make the CO2 go down? And I think you’d be very hard pressed to find anything.
So we’ve gone from a state of pretending we were doing something to a state where we say no, we’re not going to do anything. But it’s really not that different than pretending. A different way to say this is, I don’t think the world is ready to cripple our economies to try to instantly meet the goals that you would need to [to stop] climate change. There are lots of optimists who say, “Oh we can meet all of those goals without any crippling effect.” I love to say, “Well, show me the country that’s done that,” because I’m not aware of any.
A lot of the Paris accords were actually specifically framed in a way that European countries didn’t have to do any big, radical cuts. A country like Germany could comply simply by modernizing old plants from eastern Germany that were very inefficient to begin with, and should have been modernized long ago.
So I can’t look at the Paris thing by itself as a great tragedy. The private sector is the one that creates the technology that people use. The power plants are made of components that private companies make. So you get your turbines from G.E. or Siemens or Toshiba, you get your boilers from this company and your other things from that company. That’s true for nuclear, it’s true for coal, it’s true for natural gas. And we need to create technologies that allow us to very effectively deploy power.
Now renewables are one answer, but to a first-order approximation, the way you determine if a country or region is serious about renewables is, you ask about how they’re changing their grid. Because it turns out that most of the wind blows in places people don’t live. The sun goes down at night but of course it’s night in a different time in different parts of the country. The only way you can get a substantial amount of renewables used is to change the grid. But that’s a messy political problem in the U.S., because that’s something that is given over to the states. The states in turn gave it over to public utility commissions. And we’ve seen no American administration, Democrat or Republican, that has shown any leadership at all in the grid.
We also don’t have good energy storage. That’s another thing, where renewables would be way easier to deploy if we could store the energy. So, use the solar energy generated during the day at night, for example. Battery systems aren’t very effective. Batteries just aren’t very good for the extreme reliability and the extreme cost constraints that the grid has now.
That’s a problem I believe we could solve with lots of R&D. The technology world comes up with miracles all the time. But the problem with this kind of R&D is it really gets funded only by the government, and then it only gets funded during a blip when oil prices are high where everyone thinks there’s a crisis.
My first energy crisis was in 1973. I was in high school and there was the Arab oil embargo and that led to a big energy crisis. And every night on the news they would talk about more research on alternative fuels. And as soon as the price of oil dropped, that stopped. And it’s one of these things, it just makes no sense to me, because we know we can achieve enormous things like we’ve done in computing, but only because we kept investing in it for a long period of time. Gordon Moore came up with Moore’s Law first in 1959, the year I was born. And it was over a long period of time that people figured out how to make all of this work. If you fund research intensively for three or four years and it dries up, you’re screwed.
Here’s another thing that has been unfortunate. Venture capitalists and entrepreneurs in Silicon Valley set out to change the world of energy. They raised enormous investment in cleantech. And they said, “We can revolutionize this.” Well, here’s the funny thing. The world of energy was totally revolutionized by technological discovery.
Xconomy: Fracking.
NM: Fracking. Exactly. It turned out it was not the smart guys in Silicon Valley. It was a bunch of hardscrabble wildcatters in Texas tinkering away, and they figured out fracking, and it did revolutionize energy. Unfortunately doesn’t help with global warming because you still get CO2 emissions. In fact, most folks think actually it’s almost as bad as coal to use natural gas, at least the way we’re currently using natural gas.
So the cheap, cheap price of gas has undercut all of the work in renewables. So even companies that had a renewable that might have been able to get there on an economic basis have kind of had the rug jerked out from under them by the damn fracking revolution. And you know, my hat is off to the fracking people. From a technological standpoint, one invention took the total amount of energy in the United States that we thought we could access and boosted it by a factor of three, and actually all around the world the same thing. So it’s an incredible boon—if only it weren’t going to make global warming worse.
Xconomy: So, granting your point that the Paris accord, because it was voluntary and didn’t have a lot of built in enforcement mechanisms, you can maybe argue it was a masquerade. So we’ve taken off the mask. Are you still optimistic that entrepreneurs and innovators might be able to make up some of that gap, even if the federal government, even if governments around the world are not necessarily taking a leadership role and supporting the decades of R&D that accounted for things like Moore’s Law? I mean, Moore’s Law didn’t come about by accident. It was partly the result of massive federal, defense-driven investment for decades.
NM: Yes. And the best way to do it would be to have that massive investment by the government, but that’s not happening. And I think the private sector can make a huge difference. I’m trying! I’m trying. And look, I wish there were 20 more people trying whether it was advanced nuclear or energy storage. And there are a lot of those companies out there. I wish there was more.
But the thing that makes it challenging is that none of these technologies are likely to work super well on day one. By the way, computers didn’t work super well on day one. But the thing that made computing and made Moore’s Law work was, even pathetic computers were useful. There was nothing where people said, “Oh look, we’re going to do a fundraise here, a bake sale to make sure that Gordon Moore can keep making chips.” They were actually able to sell those chips. So the thing that would be fabulous is if the private sector invented, developed, and produced technologies that people would adopt just because it was in their interest.
Many years ago Sheikh Yamani, who at the time was the head of OPEC, gave a brilliant speech where he said, you know, the Stone Age did not end because we ran out of stones. It ended because we invented something better. We invented metals and smelting and all that kind of stuff. And the oil age—there’s people who thought we’d run out of oil.
And the answer is no. The oil age will end when we invent something better, which we will do. We just haven’t yet. And the challenge with energy is that the current infrastructure is so cheap, and there’s no leadership from the government, or very little anyway, to help support nascent technologies before they’re economic. So we’re going to have to keep doing that ourselves until it’s economic, naked, without any extra subsidies, without any cap and trade or any other incentives. And that’s difficult. But I don’t think it’s impossible. I’m not giving up.
Xconomy: Please don’t. Hats off to you for having the courage and the fortitude that is going to be required. And thank you, Nathan, this has been a fantastic conversation. I really appreciate your time.
NM: Well, thank you.
