Solar Power isn't Feasible!

Solar Power isn't Feasible!
This cartoon was on the cover of the book "SolarGas" by David Hoye. It echoes the Sharp Solar slogan "Last time I checked nobody owned the sun!"

Thursday, November 1, 2012

Is 'big oil' against the development of small scale renewable energy systems?




 This being election time in the Unites States,  I was complaining to my social media friends  that any candidate who is primarily sponsored by companies whose profits come from the extraction and sale of fossil fuels would not be likely to create a business environment favorable to those of us in the decentralized energy/renewable energy sector.  I went so far as to suggest that an administration backed by big oil would have a negative effect on small scale producers of clean energy.

A friend of mine who works with oil companies in Africa wrote me the following response on facebook recently,

"...to believe that "big oil" even cares the least little about you starting up a new business in bio-gas or any other energy is pretty inflated thinking as I see it.  Unless you think that you are going to have access to at least $500 million in venture capital funding for your start-up, I guarantee you that no one in "big oil" will give a damn, until you get large enough to show a profit of at least $50MM per year and do so for a couple of years.  Further, at that point, they will then just want to buy you out. I have seen several very large, multi-million dollar bio-gas projects in the USA recently and they are not being shut down, in the least. Big oil does not hate competition, it just wants to be sure that there is a way for them to buy into the game, once someone shows that it is viable."
 I can't disagree with those statements when it comes to large multi-million dollar bio-gas projects.

Big dollar companies tend to work things out, B2B, with other other big dollar companies.

 But I was talking about small scale biogas, about home scale biogas. I was speaking of encouragement for truly small businesses, not the multi million dollar businesses which one of the candidates may continue to  call "small business" but which most of us who earn under 250,000 dollars a year would never recognize as fitting the definition of small.  I'm speaking about E.F. Schumacher style "small is beautiful" small businesses.

But even there, if we are talking about the well educated heads of these big corporations, I can't really disagree with the 'no need to worry' scenario.

My friend and his company work on big and small enviro tech contracts in Chad and Libya with big oil companies like Esso and have been successful in getting them to work on win win solutions for waste management that now involve composting/arable land restoration and wetland restoration. In future I'm quite confident they will be successful in getting their oil company partners and African government partners to enable their company to do significant waste-to-biogas transformation work that will benefit Chad and her multinational partners.
 
 I don't doubt this for a second. The business plan will allow the big players to buy into the game once it has been shown to be  viable. Biogas will become just another part of the energy portfolio of companies and this is a good thing.

 Similarly my friends in Big Oil in Egypt (whose business heads and engineers I used to  meet when some of us played together in a rock/country band in the Sinai and in Cairo) were of course never threatened by the do it yourself solar and biogas work we were doing in the slums and informal areas of Cairo. They applauded it and probably could have been convinced to support it if we had stayed longer.

My friend is  right that the educated heads of fair playing companies are not involved in any conspiracy to squash little NGOs doing cute work to help the desperately poor.  We have faced no resistance  doing household biogas in areas of great need where most well off people really would prefer not to go anyway.

We field workers are the in the trenches folks that do the social outreach work that gives sponsoring companies a warm and fuzzy feeling.  And as I mentioned, big oil, as far as I an see, has  no issue with BIG installations in Germany or the US or elsewhere; when there is profit to be made they are usually partners and eventually will buy out any serious competition.

The problem is that what current policy and business practice will NOT do is create favorable conditions for disaggregated, decentralized, distributed generation solutions to our problems.

 Leadership by people involved with big oil or big government or big corporations seem to have an active aversion to models that do not allow for easy conglomeration, mergers, acquisition and ultimately command and control.  This is the essence of being big and getting bigger.  Centralization is the logic of power.  It is why we rightly fear empires and fear the systems that socialism and communism seem to inevitably create,  and it is why we created the American Capitalist system as a foundation for our experiment in a civilization that fosters freedom and allows for all people to have a shot at  life, liberty and the pursuit of happiness.

The point of good governance in America was always merely to bust the inevitable formation of monopoly power which is the natural tendency of wealth -- that is the paradox of the capitalist free market system; one of its famous contradictions. Capitalism  needs steerage to prevent it from its own excesses. We love capitalism because it provides a better path to freedom given that human nature has never shown itself capable of real socialist or communist behavior in the 'good' sense of those much maligned terms. No socialist or communist experiment has ever succeeded, so we vilify these terms which now describe only the failed attempts which caused so much misery.

Capitalism succeeds by accepting human nature as it is, but its success requires constant oversight.

 All systems tend to corruption in time because of cronyism, tribalism, in-group and out-group isms, but socialism and communism go bad quicker. Capitalism can reinvent itself in a million ways and stay vibrant if we observe the principles of fair play, open access, constantly relevelled playing fields and competition.

Small biogas systems in developing countries are no competition at all, they are mere relief systems for people dying from the inefficiencies of poorly thought out technologies and resource strategies. Both governments and corporations will support these little efforts without worry.

Big biogas systems in developed countries are part of evolving energy portfolios. Where they run into trouble is in the resource access area -- each garbage mafia has their own claim to waste material and tipping fees for landfills, trucking fees and other rents make change difficult. It is actually the littler players in these fields that impede broader big scale biogas penetration -- people want to protect jobs and profits and their territories, and these are not the big companies who could actually care less if the landfill shuts down or the garbage workers have fewer runs to make and need to lay off workers.

But what it appears big corporations will not easily tolerate are small businesses that could be potential game changers in the very nature of how energy is created and delivered.

And usually it is not the heads of these companies, who have diverse portfolios of investment anyway, and would change their strategy at the next whiff of profit ("screw oil as our commodity", says BP, relabeled 'Beyond Petroleum', "now lets corner the biogas market or solar market, or sell metered transactions or whatever can pull in profits"). The problem is usually middle management, folks in the hierarchy still clawing their way up the ladder.  These people, living in a state of constant anxiety,  usually have the ability to say 'no' to anything that will affect their promised path to the good life of Reilly. They are the gate keepers prohibiting real change.

The truly wealthy, the real 'big' guys,  are pretty immune to the effects of game changers; they actually get excited by the new game.

But their underlings want to keep systems rigid on the chance that they can join the ranks of the super wealthy and then relax and even perchance become generous -- once they are secure at the top of the pecking order.

So my observation is that when we talk about "big oil"  blocking progress in renewable energy and stymieing small business and start-ups from creating and effectively deploying solutions to climate change we aren't really talking about the wealthiest 1%.  And thus we keep targeting the wrong area and wonder why we aren't seeing the change we desire. My observation is that when we find our efforts to expand the use of decentralized, distributed generation of power from waste materials and forms of solar energy that are available to everybody somehow meeting resistance and getting blocked , we are dealing with folks in medium power  positions reacting with fear.

I have a friend, for example, who is trying to start a home biogas company, building backyard digestors that are simple and low cost and turn kitchen wastes into clean energy and fertilizer.  His business model is similar to that of another friend of mine in Kenya, but where the latter is succeeding and getting a lot of support,  local politics in the US has gotten in the way of his growth. The permit givers became with-holders. The gate keepers shut him down through all sorts of ridiculous hurdles and disincentives and discouragements.

 It wasn't the big oil players who shut down home biogas this round, it was the little politicians and regulators.  The problem is that these middleware folks take their marching orders from their perception of what big oil wants. Or what they are afraid they don't want.  Often they really don't know because they are in the pecking order on a needs to know basis.

Because of the nature of hierarchical  systems  they don't really get to sit in on the deeper more philosophical board meeting discussions and strategic planning meetings that concern long term futures. Ironically we academics and foundation people and service company leaders like my friend in Africa and even some or us in the NGO world often have more access to top business and government leaders than people working in those systems.

The middle men get in the middle and muck things up.  They feel they have struggled to get in line and get on what they hope will a reliable conveyor belt to the big time, and they are going to fight tooth and nail to preserve the status quo as they understand it.  But make no mistake -- they aren't big oil.  They aren't big anything. They may work for big companies but they are really just the cogs and wheels in a vast machine that even their superiors would like to find a way to change.  The problem is that there are just too many vested interests, and until all the key joints in this ungainly system are lubricated and feel they can be reconfigured without threat, they aren't going to favor innovation. Certainly not if involves systemic change that derails their conveyor to the top.

 Because of these realities I think it is urgent that we have political leadership that sends the SIGNAL to the gate keepers at various levels that it is perfectly okay and even desired to change the nature of the game.

We need presidents of both countries and companies to tell the world, the nation and all employees that we want to play  by the original fair rules of the free market and that we mean it this time.

We need to say "all energy options are on the table, no negative externalities or cheating allowed, you can't spew your toxins into the public commons, you have to pay all clean up and remediation costs yourselves, you have to allow free enterprise at all levels, no collusion, no back room deals, no turning the other way and allowing people to suffer so you can get richer. "

With the rules of fair play clear (as in 'main street and wall street have to play by the same rules' and 'pollution can no longer be your path to profit' and 'full cost accounting -- no un-costed residuals of production') middleware folks will see that the only way to stay on the conveyor is to adopt the new game and abandon the old one, because the conveyor will have clearly changed direction.

When I was at the Energy Round Table in Aspen with business and government and military leaders during the Shell Oil Spill (Shell was there too, along with EPA director Lisa Jackson) we heard from the corporations about the desperate need for clear signals of where policy was going to take us.

 They said, "if Washington would definitively say what it was going to do in terms of carbon trading, we would be able to make projections based on that and we'd all be happy. But you leave us in an uncertain landscape and that uncertainty makes planning impossible. Of course we resist changes in this environment. Signal to us and make clear that spills and exhausts and carbon and millirads of radiation and whatever will cost this much or that much, and that subsidies will be increased or reduced by this much or that much, and fines will cost this or that much, and Pigouvian taxes this or that much and we will respond. "

The business leaders told us "We don't want to damage our environment, but we have to compete with other countries that are playing by different rules and we are stuck. Make international agreements, get cooperation and tell us where the energy landscape is going and business will respond. Right now the waters are too murky."

And why are they murky? In large part because people and groups in the middle are mucking things up until they can be guaranteed what they feel is there share of the spoils. So they are spoilers of game changes they aren't really privvy too and both top level and bottom level game changers they don't have access to.

 Former Senator Paul Simon and I talked a couple of times in Syria when he was there promoting his book "Tapped Out: The coming water crisis" and I showed him a model but functioning regenerative unitary fuel cell. He said, "I wish more young people like you who know something about technology and its implications would come to us in Washington. All we get are these lobbyists clamoring for their piece of the pie. If you want change you have to come to us and get your ideas in the mix too."

 He told me that the lobbyists frequently had their own agendas and the implication was that often they don't even do a good job of representing the industries they supposedly are lobbying for. A lot of folks are just lobbying for themselves, and that may be why American companies have been so often sideswiped by leaner, faster competitors, like the Japanese auto industry and the Korean steel industry and other more modernized, cleaner, more efficient producers.

 I remember reading the vision of the young Ford -- our generation's Ford, not his ancestor -- speaking of his vision for the company making the best and most efficient cars. But he wasn't allowed to run his company toward that end. Similarly, GM spent billions on the best electric cars on the market and were defeated not because corporate leadership didn't want it or government didn't want it but because of the disruptive impact on all the parts suppliers, the gas station owning companies, and other middle ground players. Lobbyists thinking they are being loyal to their corporate heads but never really understanding the dynamics of Schumpeter's Creative Destruction (perhaps willfully because they are worried they'll get destroyed) make deals with mid-level politicians in Congress or the Senate and they all tie the hands of presidents -- both the President of the United States and the presidents of our best companies. 

 The heads of oil companies, I maintain, aren't worried about a new world of decentralized energy. They will adapt. They  will make money regardless. They will, as my friend says, buy up battery factories, charging stations, local component manufacturers... at that level it is all a game. They aren't threatened. But the status quo is.

The status quo is created through a perception of how stable the fortunes of the upper middle class and the lower upper class are and will be within a given set of rules.  Only government can state the rules in such a way that every business must comply. That is why we pool our resources and make governments, otherwise the tendency is always for big fish to get bigger and bigger and swallow up the small fry.  This stifles innovation and progress. So we build appropriately sized governments to take down the biggest most rapacious fish and reintroduce lean competitiveness to the system. You want small government, you gotta downsize big business. Then they will be on par.  As long as we have ungainly big businesses filled with middleware that is poorly connected the the thriving heartbeat of innovation, we need counter-weights in government, checks and balances to a system that on both sides has grown to powerful. We are in quite a fix, but we can untangle this if we understand where the worries are and acknowledge the fears of folks in insecure but promising positions on the conveyor belt who unfortunately can control some of the valves and pumps feeding the heart.

  For small biogas to thrive, and for any small scale renewables to thrive, said the leaders at the Aspen Energy Forum, we not only need clear signals for planning to assuage the fears of people trying to plan in an uncertain market, we also need to reconceive energy using the information technology business model.

They called for ET to be like IT (energy tech like info tech).

 One of my contributions was to champion the role of bricoleurs, tinkerers in energy production, using my early experience as a Ham Radio operator (KC6MBN is my handle) to inform energy -- i.e. we buy parts and assemble energy systems at home or at the community level; everything is modular and plug and play.

This was also the vision of the leaders at the HVAC and energy conference hosted by Irene Stillings  at the California Center for Sustainable Energy in San Diego -- they said, "we need to appliancize all renewable energy -- the same way you buy a toaster or a refrigerator or a dish washer, you should be able to buy off the shelf energy components for your home -- solar panels for electricity and heated water and air, biogas digestors, heat pumps, efficient heat exchangers, wind mills, whatever. Everything should be a module you buy and plug into the house."

And this was Amory Lovin's path that he spoke about when I met him, his hypercar concept where the car itself produces energy for the house and vice versa is part of this new modularity with consumer goods taking on the role of dis-aggregate energy production.

So the visions are out there, at the top levels, at the bottom levels... Somewhere in between things get lost. I attribute that to an environment of fear and suspicion among the ranks of the middle men. We aren't getting clear signals from the top and the upper middle is wallowing in worry.  And they are blocking.

That is where we need strong leadership -- a vision clearly expressed that signals to people in the middle "its gonna be okay; we are going to phase out fossil fuel combustion as rapidly as possible but we are going to give you support for all of your creative ideas to replace them. And please note, my fellow Americans -- phasing out combustion doesn't mean we are going to throw you out of work. We have oil and coal and fossil gas in America and we will use them, we just aren't going to burn them. We will use them in Fuel Cells like the hydrocarbon transforming Franklin fuel cell which emits nothing but water and CO2 which can be recaptured and used for biological plant growth. We can turn them into graphite and carbon nanotubes and build up a better infrastructure of roads and bridges and materials and rockets and automobiles. Carbon is an essential building block -- to important to let go up in smoke. We will research nuclear fusion and deploy fission and fusion in space exploration and space mining, but we won't need it here on earth where it can damage cell organelles. We will transform all wastes into new materials and into clean energy. No meaningful jobs will be lost, no sustainable profits will be lost. We are in this together and we all want the same things : prosperity, equality, a healthy environment for our children and the chance to pursue our own happiness. "

" All options to make that dream a reality will be on the table and we will be your public servants in upholding the laws that protect our citizens and guarantee your rights."

 That is the speech I'm waiting to hear from somebody... anybody. And it is for that vision that I cast my vote.

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