When I wrote my Feb. 28 post on the energy transition tipping point, it seemed a bold call to make because I hadn't heard anyone else say that the transition away from fossil fuels and toward renewables had become irreversible.
Apparently, however, that thesis struck a chord. That's another reason that I choose to focus on the positive outcomes of the switchover, rather than the growing pains we're bound to experience as a result.
The chorus of those talking up the inevitable transition is filled with diverse voices — ranging from utilities to investment banks to other analysts.
Within days of my February article, CEO Peter Terium of the German utility RWE, called the clean energy transition in the electricity markets "unstoppable" and "irreversible."
Investment bank Morgan Stanley was next. The bank's early-March report apparently shocked investors by saying the utility business was undergoing massive disruption and that falling costs of solar power and battery storage would encourage consumers to defect from the grid. “There may be a 'tipping point' that causes customers to seek an off-grid approach,” the report noted. “The more customers move to solar, the remaining utility customer bill will rise, creating even further 'headroom' for Tesla’s off-grid approach.”
Nafeez Ahmed riffed on my piece at length in The Guardian, setting the energy transition in a larger context of "overlapping crises" that face humanity—resource overshoot, wealth inequality, the "food crisis," civil unrest, rising debt, and so on. Energy transition, he argued, is but one example of the rise of solutions that decentralize and localize our activities, and shift power from concentrated elites and federal control to the grassroots level.
The debate really picked up steam at the end of March when NRG Energy CEO David Crane published a manifesto describing how he intends to transform his utility company and follow a "path toward a distributed-generation-centric clean energy future featuring individual choice and the empowerment of the American energy consumer."
Cheapest solar yet?
Amid that dialogue, the economic argument fueling the transition got yet another boost last month when Austin Energy, a municipal utility in Texas, revealed it is signing a 25-year power purchase agreement with a 150-megawatt solar plant at less than 5 cents per kilowatt-hour (kWh), the lowest reported price for solar yet. The price reflects the benefit of the federal investment tax credit, but even without the credit the price would be 7 to 7.5 cents/kWh — still competitive with the utility's cost estimates for power from natural gas (7 cents), and well below the cost of coal (10 cents) and nuclear (13 cents) power.
Suppose there were no incentives at all for solar, and you were in charge of power purchasing for a utility. Suppose you had to choose between a 25-year contract for solar power at a fixed price of 7.5 cents/kWh, or a 25-year contract for natural gas-fired power that is 7 cents now, but will undoubtedly fluctuate wildly over the next several decades in the notoriously volatile natural gas market, while nearly every analyst believes that gas prices will continue to rise in the future. Which would you pick?
There are new developments on the storage side as well, which are contributing to the economic viability of solar and other clean energy alternatives to fossil fuels.
If Tesla's new "Giga factory" can achieve its goal and slash the cost of lithium-ion batteries in half in just six years, it would probably put the cost of owning an electric vehicle (EV) below that of a cheap, average gasoline-burner. Then, EVs could pick up real market share (they currently have less than one percent of the U.S. market). That would enable vehicle-to-grid (V2G) and vehicle-to-building (V2B) technology to become a real player in grid power, after years of languishing for lack of enough EVs on the road to make it effective. According to one veteran storage consultant, just 100 electric cars parked at a 150,000-square-foot office building during the day could meet most of that building's peak demand, shaving off the most expensive hours of the building's power consumption. With widespread deployment, technologies like this could reduce the amount of expensive peak generation capacity that utilities need to build, and reduce electricity prices across the board.
No-money-down storage is also coming into play, as companies like Coda, Stem, and Green Charge Networks borrow from the solar leasing business model to offer energy storage systems for commercial buildings. If these companies can profitably offer commercial storage systems that pay for themselves without the customer paying out-of-pocket, peak-hour power pricing would be in serious jeopardy, turning even more big coal and nuclear plants into stranded assets. A real example: Mayor Rex Parris of Lancaster, Calif., is partnering with Green Charge Networks to help achieve his goal of becoming the first "net zero" city in America.
The drumbeat of reports about oil production's rising costs has also continued. On March 11, Chevron capitulated to the obvious, giving up on its previous $79/bbl price projection for the Brent oil benchmark and saying that $110/bbl is more like it. It also reduced its forecast for 2017 production from 3.3 million barrels of oil equivalent per day (mboe/d) to 3.1 mboe/d. The company produced 2.6 mboe/d in 2013. Chevron's CEO, James Watson, said $100/bbl could now be the break-even price for new oil development. A week earlier, ExxonMobil also sharply cut its future production target and scaled back capital spending.
More evidence of financial problems in the oil patch emerged, with a report from analyst Ivan Sandrea of the Oxford Institute for Energy Studies saying asset write-downs have approached $35 billion for the 15 main shale gas and tight oil operators. As I have pointed out ad nauseam, their inability to turn shale drilling into a cash flow-positive business could make it difficult to maintain growth, and cause production to fall short of expectations in the coming years.
The drumbeat of environmental disasters relating to fossil fuels has also continued with horrifying regularity. On March 13, eight people were killed in an explosion in East Harlem, New York; ancient, leaking natural gas pipes are believed to be the culprit. On March 14, an estimated 1,500 gallons of oil were spilled from an Illinoise pipeline and leaked into a ditch leading to the Kankakee River. On March 21, a crack was reported in a coal ash dam owned by Duke Energy, a day after activists with the Waterkeeper Alliance photographed Duke employees pumping an estimated 61 million gallons of contaminated water from two coal ash dumps into a canal leading to the Cape Fear River. On March 22, bunker fuel was spilled into Galveston Bay, a particularly important shorebird habitat. On March 25, BP spilled crude oil into Lake Michigan near Chicago. On March 31, a pipeline explosion at a supplemental storage facility for liquefied natural gas in Washington injured five people and forced the evacuation of 400 others. (The explosion could have been catastrophic had one of the plant's massive tanks of LNG, which was punctured in the blast, also exploded.)
'Techno-happy' or pragmatism?
To be sure, there were plenty of people in my circles who pushed back on my "tipping point" call, such as Raúl Ilargi Meijer, who worried I had "come far too close for my comfort to replacing one wave of techno-happiness with another," and somehow came away from my article with the impression that I believe economic growth and our current energy supply levels can be maintained as we transition to renewables.
I made no such assertion, but that kind of reaction was fairly consistent among my friends in the peak oil community. For some reason, they wanted to leap from my careful documentation of fossil fuels' challenges and renewables' improving economics (mainly in the context of grid power) to a much broader question about whether renewables can replace fossil fuels entirely in the not-too-distant future, in a smooth and untroubled fashion, leaving everybody happy with economic growth intact.
I have written so many articles over the past decade about the difficulty of energy transition and the very real risk that the decline of fossil fuels could take down the global economy (and ultimately the human population) in this century, that I really didn't think my credibility as a doomer could ever be called into question. I put a picture of a graveyard at the top of my last piece on collapse, for heaven's sake, and talked about death and grieving. I've certainly been far too doomerish for some (as the comment threads on many of my articles will attest) but apparently seeing any hope in the future is not doomerish enough for others.
So let me explain why I have very consciously chosen to downplay the risk of collapse, and (as the 1944 Johnny Mercer classic goes), "Ac-Cent-Tchu-Ate the Positive."
Very simply: While negative stories may be 100 percent true (as peak oil surely is), they just don't motivate people to action. In fact, they often motivate inaction.
Regarding peak oil specifically, we can simply look back to how the subject was treated in the 1970s, after M. King Hubbert's forecast for declining U.S. oil production came true, and America was groaning under high oil prices during the Arab oil embargo. A newly published interview that Mason Inman did with James Schlesinger in 2012 offers fascinating insights. (Schlesinger was the United States’ first Secretary of Energy and before that, the Director of Central Intelligence and Secretary of Defense. He died March 27.)
Schlesinger was well aware of the peak oil problem in the '70s. Although increasing global oil production over the intervening decades (primarily from unconventional sources) has been enough to convince some people that it is a false alarm, he never doubted peak oil would yet prove to be a serious challenge to humanity. But after 40 years of observing politics, Schlesinger learned that politicians will say anything to soothe the public (and themselves), and realized it's hard for the public "to distinguish between reality and what they are promised in political rhetoric." So after some decades, he stopped talking about peak oil, because "at some point you get tired of beating the drums" when people are willfully ignoring the message, and it's being drowned out by a blaring horn of industry propaganda repeated verbatim in the media.
Starting around 2003, I traveled that same path and discovered the same things as Schlesinger. After a decade, I also got tired of beating a drum nobody wanted to hear.
What I have found is that while people don't want to hear about problems, they do want to hear about solutions. They want to know what they can do. So once you've accepted the fact that positive stories can gain traction and motivate change, where negative stories can't, your path is clear.
You talk about what's working. You don't promise the moon. You don't try to paint a happy face over every possible ugly outcome. But you try to foment the change that's going in the right direction.
So to my friends and esteemed colleagues who want to focus on collapse, I say: Good luck with that.I'll be over here with the people putting steel in the ground to generate clean power, talking up the lifestyle benefits of greater efficiency, hanging a big flashing banner over the words of David Crane, and stoking the fires of hope.
It's the only path that makes sense to me anymore.