So long as “clean energy” remains a political question it will be controversial. So long as global warming is seen as a problem solutions will be opposed. (Picture from Change.org.)
Fact is clean energy and global warming should be business questions, not political ones. We have a variety of ways to produce energy without carbon.
Each has strengths and weaknesses, but they can’t start competing with each other until the market is organized in a way that gives executives “visibility,” a clear idea of costs and risks.
Almost 80 years ago a man named Robert Woodruff faced a similar problem. Fluctuating prices for sugar meant there were constant fights between his company, which produced soft drink syrup, and the companies bottling the product.
He saved the day by changing the subject. Instead of worrying about the price of sugar and shares of profit, he asked, how do we make certain each Coca-Cola you buy tastes just like every other Coca-Cola, anywhere in the world.
The clean energy debate can be transformed in the same way. We can focus on the opportunities rather than the problems by answering these five questions:
- What price can assure clean energy a market?
- How do we make clean energy portable?
- How do we create a global market for clean energy technology?
- How do we pay for all energy externalities?
- How do we organize a global market for all energy?
Of these questions the first is the most important. The answer will determine a floor price for energy, which in turn will enable executives to plan and price their investments.
The second question is the key to the three which follow. We know how to transport coal, natural gas and oil. We know what that costs, and thus we know the price these commodities must meet to be profitable.
My personal answer to this question has always been hydrogen. That is, build a global market for hydrogen, and price clean energy based on the cost of converting that energy to hydrogen and back again.
But I’m perfectly happy to see us use another commodity if hydrogen won’t work. How about ammonia, which combines hydrogen with nitrogen into a liquid you can load into a tanker and transport at room temperature?
By focusing on what stands in the way of growing the market, rather than what may happen if we don’t do what global warming activists want, the energy debate can be transformed. It can be taken out of the hands of the politicians and put into the hands of the entrepreneurs.
Once that happens everyone wins.
