21 May 2009

Pinto's Point

Future of energy

By Jim Pinto

For two centuries of industrial history, energy technologies have improved much faster than the estimates of supply have receded. New energy sources have always been developed to meet burgeoning demand.

The belief in progress through human ingenuity generates the concept of the “bottomless well.” This is the seminal thinking in a book by Peter Huber and Mark Mills: The Bottomless Well: The Twilight of Fuel, the Virtue of Waste, and Why We Will Never Run Out of Energy. It emphasizes that as humanity advances, more and more energy, not just oil, will come inevitably from the “bottomless well” of technology innovation. Energy supplies will always outpace demand.

The demand for energy can only go up. Why? Because cheaper and better products stimulate demand and increase total energy usage. It signals progress, and energy usage is simply a cheap byproduct.

It is clear electricity, not oil, defines the fast-expanding center of the energy economy. About 60% of U.S. GDP now comes from industries and services that run on electricity. All the fastest growth sectors of the economy, like info-tech and telecom, depend totally on electricity.

Bob Metcalfe, Ethernet co-inventor and founder of 3Com, does not like the label “green.” To him, this conjures up anti-capitalism, anti-technology, anti-Americanism. Why not call it blue tech? Blue for power coming from the sun, or the oceans.

Metcalfe thinks the real goal in the next six or seven decades should be to produce “squanderably abundant, cheap, and clean energy.” How can we do that?

It is like the Internet; no one could have foreseen where it would end up or all it would be used for. There were innovations no one saw coming, semiconductors, the PC, packet-switching, Ethernet, TCP/IP protocol. There will be similar surprises with energy, too.

Ultra-cheap energy will come from new sciences. Perhaps we will create abundant biofuels out of algae; Craig Venter, who first sequenced the human genome a decade ago, is focused on doing just that.

Oil is a biofuel, which has developed in the ground over millions of years; what if we could synthesize bacteria to produce oil from waste products in months? Who will want old-fashioned oil then?

Or perhaps we can use the sun to turn water into high-energy fuel. We might develop nuclear schemes that do not require huge power plants, or produce dangerous waste.

Human ingenuity and technology will inevitably achieve these dreams of the energy future.

Related links:

• Energy - The Bottomless Well:
  http://www.jimpinto.com/writings/bottomlesswell.html
• Book, The Bottomless Well - Review and buy on Amazon.com:
  http://www.amazon.com/exec/obidos/ASIN/0465031161/jimpintocom/103-5313118-0362220
• Craig Venter: Genomics vs. Oil Economics:
  http://earth2tech.com/2008/02/26/craig-venter-genomics-vs-oil-economics/
• Looking ahead with tech icon Bob Metcalfe
  http://www.physorg.com/news156622973.html

Behind the byline

Jim Pinto is an industry analyst and founder of Action Instruments. You can e-mail him at jim@jimpinto.com or view his writings at www.JimPinto.com. Read the Table of Contents of his book, Pinto’s Points, at www.jimpinto.com/writings/points.html.