July 01, 2008
Frustration Drives Innovation (But We Should Help it Along Too)
By Helen Aki, Breakthrough Generation Fellow
Here at the Breakthrough Institute, we have held that making clean energy cheaper, rather than "dirty" (i.e. carbon intensive) energy more expensive, is the most effective way to spur the innovation we need to transition our energy dependence to new sources. In the absence of cheaper renewables, however, ever-rising oil prices are already prodding innovation into effect.
Let's acknowledge the uncreative response to higher energy prices and voter turmoil at the outset: yes, drilling for more oil in Alaska is neither innovative nor interesting, nor a way to lower America's oil bill. But more has arisen out of $147/barrel oil (the most recent high; as of today it has dropped back down to $123/barrel) than the routine of panic. Thomas Friedman wrote today that,
The only good thing to come from soaring oil prices is that they have spurred innovator/investors, successful in other fields, to move into clean energy with a mad-as-hell, can-do ambition to replace oil with renewable power.
Here are some examples of recent interesting, astonishing, and innovative ideas that have arisen largely due to higher energy costs.
Case Study #1: Burn Stuff (Not Oil) To Make Gas
The simplest articulation of the price mechanism is that the more widely a resource is available, the cheaper it will become. This is the argument generally used to justify drilling in ANWR, although the oil reserves there will really only reduce prices at the pump by a few cents. A similar motivation has stimulated some to create fuel by other means: namely, using garbage to power our vehicles.
Matthew L. Wald writes for The New York Times:
For decades scientists have known it was possible to convert waste to fuel, but in an era of cheap oil, it made little sense. With oil now trading around $125 a barrel and gasoline above $4 a gallon, the potential economics of a waste-to-fuel industry have shifted radically, setting off a frenzy to be first to market.
"I think American innovation is going to come up with the solution," said Prabhakar Nair, research chief for UOP, a company working on the problem.
It won't get there without a lot of help, however. High oil prices might inflame the desire for alternative fuels, but desire alone won't achieve its ends. As Wald puts it, "Some of the latest announcements come from small companies whose dreams may be bigger than their bank accounts." The federal government is offering subsides of around a dollar a gallon (twice as much as has historically been offered for ethanol), and investment--as much or more than the pinch of oil costs--is necessary to instigate the breakthroughs necessary to make waste-fuels viable.
Case Study #2: An Unlikely Innovator.
T. Boone Pickens has made his billions from oil. He helped put President Bush in office and was involved in the "Swift-boating" of John Kerry. He is 80 years old. And he has a plan to revitalize America through the massive implementation of clean, renewable energy. His website, PickensPlan.com, disparages the notion that America can drill their way to lower energy costs, instead dubbing the United States "the Saudi Arabia of wind power." His plan: Build the world's largest wind farm, right in the Texas panhandle. Boone's farm will produce 4,000 megawatts, doubling the amount of wind power currently generated in the United States.
Why is this an example of innovation? Wind's been done before. Building a wind farm might not be anything new or exciting, but the novelty lies in its adoption and $58 million endorsement by such a powerful political figure, who comes at it from an untraditional angle. Despite his endorsement by Carl Pope, Pickens is by no means a classic "green." This is a sort of innovation, and suggests a truly transformative moment. Pickens describes his project as an endeavor to break America's addiction to foreign oil, but rising oil prices have critically influenced his timing.
Case Study #3: The Poulsen Hybrid Kit
We've covered a number of exciting new electrified options for personal transport, but for those who are unwilling to forfeit thousands of dollars (or hundreds of thousands) to replace their old cars for an expensive, brand-new model can now retrofit their vehicles to get up to 100 mpg (more here, and here). An American company called Alpha-Core has created some rear-wheel motors which turn your car into a hybrid for $3-4,000. The Poulsen hybrid, named for founder Urik Poulsen, is a low cost creation which can rapidly facilitate the transition of today's poor fuel-economy fleet to the efficient, electric cars of tomorrow. According to the website, the "Poulsen Hybrid system enables you to choose the car you prefer."
While gas prices may not be high enough yet to justify buying a Tesla roadster ($110,000), or the UK's Lightning GT ($300,000), they are enough to create an impetus to buy a cheap conversion kit (which, incidentally, is cheaper than the $5,000 deposit required to test-drive the Tesla at its new showroom in Menlo Park, which, this writer believes, might be a more satisfying-if fleeting-use of a few grand). The Poulsen kit is a smart step towards electrifying transport: once Americans have experienced, in a cost-effective manner, the fuel economy savings of a hybrid vehicle, they'll be more likely to demand them in the future.
While high "dirty energy" costs may not create the clean energy revolution overnight, they have certainly created the conditions for transition. Now it's time to take advantage of the opportunity. Fuels made from garbage, oil tycoons turned wind farmers, and do-it-yourself hybrid conversion kits: these are all signs of agitation, of restlessness. America is ready for new sources of energy. Innovation spurred by frustration is making the first steps down the path towards a clean energy future. It will get there a lot faster if we invest in its newborn efforts.