Anyone who tried to fill out an NCAA bracket this season (or any season) can relate to the quote often attributed to Yogi Berra: “It’s tough to make predictions, especially about the future.” Even when your prediction is close, like this year when I picked KU to beat UNC in the final game by a score of 73 – 69 (turned out to be 72 – 69), so many other factors play into the ultimate outcome.
Nevertheless, The Economist magazine took a shot at prognostication. It vowed to explain “the new age of energy and security” in a recent cover story. “Our findings suggest the world will be less reliant on energy-related resources in 2040 than it is today—largely because wind and sunshine, the sources of the future, are free,” the magazine writes. That would reduce spending on energy as well, from today’s 5.8% of global Gross Domestic Product to 3.4% in 2040.
A move to free (or at least low-cost), carbon-free energy would indeed be a marvelous outcome, assuming that it’s also diversified and secure. However, we’re a long way from the 2040s and many things that we don’t anticipate will happen between now and then. Maybe Russia will invade another neighbor, China will attack Taiwan, or Europe will allow fracking for its abundant supply of natural gas.
The best way to prepare for a brighter energy future, then, is opening all available resources and technologies and allowing market forces to select winners from among those options.
At the top of the list should be nuclear energy.
The Economist notes that “nuclear’s share of the world’s electricity production fell from 17.5% in 1996 to 10.1% in 2020.” That’s a shame and a wasted opportunity. Electricity from nuclear sources is carbon-free and reliable (even on cloudy and wind-free days).
The magazine writes that “pint-sized” nuclear plants, the next generation of technology developed by companies including NuScale, make them smaller, simpler, and safer than the plants of the 1960s and 70s. For example, “The cooling water in NuScale’s plant circulates through the core by simple convection, requiring no pumps or moving parts,” the magazine writes. As for the risk of meltdown, “even if the internal cooling were to fail, the external water in the pond has enough capacity to absorb the diminutive reactor’s heat production.” To be clear, the larger lightwater reactors operating in the U.S. today are remarkably safe: arguably the safest of all energy technologies. Innovators are making a reliably safe product even safer.
Nuclear is starting to make a comeback in Europe as a result of Vladimir Putin’s war against Ukraine. France says it will build six new plants, and Britain promises to build more soon as well. “A redesigned energy system that will belch out less carbon also promises an escape from the 20th century’s great game of relying on energy from despots,” the magazine opines.
Then there’s mining. Want more renewable energy? Then get on board with more mining in the U.S. It’s central for next generation energy technologies. “Governments must catalyze mining investment,” the magazine says. But right now, “only China is spending a lot.” The U.S. and the rest of the free world need to reduce our reliance on Chinese rare earths, especially as our use of these metals could increase by as much as seven times in the next decade with the development and deployment of new batteries, solar panels, and wind turbines.
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And it’s not just investments in mining that are needed. We need to cut red tape. Companies are already developing ways to recycle rare earths from used batteries, and technology is helping find new places to mine. Unfortunately, the U.S. has one of the longest permitting processes for new mining projects in the world. It can take anywhere from ten to thirty years, far longer than the global average. That can and must change. Australia and Canada, for example, give approval in two years.
A potential step in the right direction, President Biden released his “Permitting Action Plan”, a recognition that he previously went in the wrong direction by reversing the Trump Administration’s NEPA reforms. But time will tell if the administration implements any substantive reforms and improves energy security.
Meanwhile, the world should rely more on natural gas. Thankfully, the U.S. has abundant natural gas, enough to even export it, and it’s the cleanest hydrocarbon fuel there is. In addition, it can crank up electricity-generating turbine engines quickly and run reliably day and night. The United States is taking the lead, and in the wake of Putin’s war on Ukraine, we are exporting more liquified natural gas (LNG). Qatar, also, is moving to provide more, which can be good for the environment. “A decade from now, when electric cars will no longer be burning Aramco’s oil, many of them will still be charged using electricity generated with QatarEnergy’s gas,” the Economist opines. That is a prediction we should all hope comes to pass.
Lastly, as I’ve written before, we need to invest in all energy innovations with a commitment to their commercialization and deployment.
The magazine does sneak in a note about this, how it’s already happening and that the trend may be here to stay. “Clean tech attracted over $87 billion of investment from venture-capital and private-equity firms alone in the year to June 2021.” That’s good news and certainly a good start. But let’s not gum it up with more regulations and top-down industrial policy as the they go on to suggest. That would only reverse the course that has attracted that $87 billion so far. As an investor friend said to me recently, “if you want to increase the flow in the hose, then remove the kinks before you turn up the pressure.” Sound advice.
The future is indeed a great unknown. However, it can always be brighter and cleaner. The “great game” of our 21st century should be a race to tap all sources of power, and thereby create an effective, “all-of-the-above” cleaner and more secure energy future. Game on.