Editor’s Note: EarthTechling is proud to repost this article courtesy of Yale Environment 360.
Amory B. Lovins is fond of referring to the Rocky Mountain Institute, where he serves as chairman and chief scientist, as a “think and do” tank, and it’s clear that to Lovins the doing is every bit as important as the thinking. Hardly lacking in confidence or ambition, Lovins — in conjunction with his colleagues at the institute — has published Reinventing Fire, his step-by-step blueprint for how to transition to a renewable energy economy by mid-century.
Impressive in both its scope and detail — Lovins discusses everything from how to redesign heavy trucks to make them more fuel efficient to ways to change factory pipes to conserve energy — the book lays out a plan for the U.S. to achieve the following by 2050: cars completely powered by hydrogen fuel cells, electricity, and biofuels; 84 percent of trucks and airplanes running on biomass fuels; 80 percent of the nation’s electricity produced by renewable power; $5 trillion in savings; and an economy that has grown by 158 percent.
In an interview with Yale Environment 360 senior editor Fen Montaigne, Lovins discusses how business and society can pull off this transformation even if the U.S. Congress keeps failing to act, why climate change need not even enter the discussion, and why the oil industry will ultimately forego fossil fuels and jump aboard the green bandwagon. “One system is dying and others are struggling to be born,” says Lovins. “It’s a very exciting time.”
Yale Environment 360: Given that we’re in the midst of what could only be described as a fossil fuel boom, with the discovery of new unconventional sources and new oil sources being found all over the world, how do you speed this transition and get from here to there?
Amory Lovins: Well, I’m not sure what boom you’re talking about. When I read the Wall Street Journal, I see a headline a few weeks ago about coal running out of steam.
e360: China is consuming tremendous amounts of coal.
Lovins: Hang on — I look at the data and I find that in the United States, coal’s share of the electrical services market, which is 95 percent of its market for fuel, has fallen by a quarter from 2005 through 2010, displaced by cheaper gas, efficiency, and renewables. And then when you look in the forward prices and the options market, that spread is going to keep widening. And when I hear how cheap natural gas is, I remember that it’s also very volatile. This has nothing to do with the many uncertainties around fracking, which will take a decade to resolve — if they work out well, we’ll be satisfied with a new option; if they don’t, that’s okay because we won’t need that much gas, so we won’t be very disappointed.
e360: Certainly in China, India, and the developing world there is a fossil fuel boom going on.
Lovins: But in a global context, there is a remarkable boom in efficiency and renewables in China, the world leader in five renewables. Part of the story in China is that the extraordinary vitality of renewables is coming very largely from the vibrant private sector, while all of the nuclear and half the coal business are the old state enterprises. So the story of incumbents and insurgents is partly the story of the reshaping of the Chinese economy from the old and rather bureaucratic command organizations. That is, I think, an encouraging trend.
Last I looked a couple of years ago, the private sector in China was something like 50 to 70 percent of the profits, the growth, and the new jobs. Of course there is still a lot of momentum in the coal bureaucracy in China and India, which together burned half the world’s coal and account for about three-quarters of the projected increase, but I think those projections are looking quite dubious. In China, for example, they have lately retired over 70 gigawatts of inefficient coal plants, so that their coal plant fleet is now more efficient than ours. In 2010, 59 percent of their net new [electricity] capacity was coal. It used to be much higher.
e360: You feel we’re in a period where fossil fuels over the next decade or two are going to be increasingly like whale oil?
e360: You’ve got the president of Shell writing a foreward to your book. There are prominent quotes from the president of Texaco in one section of the book. How do you persuade these oil companies that are making billions of dollars now and into the foreseeable future to get on board with this renewable energy revolution? What is going to persuade them to be on what you see as the right side of history?
Lovins: Mainly risk management, and as a member of the National Petroleum Council, having worked in this industry for 38 years, I’ve seen a lot of concern about risk. Oil is like airlines. It’s a great industry and a bad business. Look at its fundamentals. It is extremely capital-intensive, long lead time, based on a wasting asset of which you only own about 6 percent and the rest can be taxed away or confiscated at any time. It is a business overflowing with all kinds of risk — technical, political, financial. It is unpopular politically. Its subsidies are at some political risk in this country. Put all that together and you have a magnificent recipe for headaches. Why would you want to be in a business like that?