John Constable: Speech At The Financial Times Energy Summit
Last week, on the 14th of June, I spoke in the Lex Debate at the Financial Times Energy Transitions Summit, opposing the motion that “Fossil Fuels are Doomed”, but did not succeed.
The text of my debate speech follows. I attended the Summit from 08.45 to 15.30, and was the only platform speaker to use the terms “physics”, “entropy”, or “thermodynamics”, or to raise these matters as relevant to the feasibility and pace of energy transitions. Economics, of all subjects, appears to have become a very spiritual matter.
John Constable: Speech to FT Energy Summit, Lex Debate, 14 June 2018: “Investors in the fossil fuel sector. Are they doomed?”
- Energy transitions are intrinsically slow and the incoming energy system is necessarily and unavoidably created by the previous one.
- Think of the history. The transition from the organically fuelled economy of the late Medieval period to the mineral based economy of the twentieth century took something like five hundred years in Europe and North America, and even today has not yet reached the whole world.
- Of course, the next transition might be quicker, but it won’t happen within a decade, or two. If fossil fuels are “doomed” it is in a timeframe well beyond the investment horizon.
- And that will be true even assuming that the policy-induced transition to renewables is actually viable. In fact, not all of us think it will succeed, and for my own part I suspect renewables really are doomed, on physical grounds, and that the axe of thermodynamic reality is already falling. Time will tell.
- But for the sake of argument, let’s suppose renewables are indeed the long term future. Nonetheless, they will have to be created out of the fossil economy, and that will take decades at the least.
- Renewable energy output is still small in volume, and the technologies have such a low energy return that they are a very long way from being autocatalytic, self-reinforcing. Never mind the fact that they cannot support or maintain the wider economy, they aren’t even yet able to create, support and maintain themselves. Modern renewables are a dependent output of the conventional energy system.
- Some people look at a wind turbine and claim to see the future. I see one of the achievements of the fossil-fuelled present. Here is a machine that can take a low grade, high entropy, chaotic energy source like the wind and make it into just about usable electricity.
- Remarkable in a way. But the truth is that in spite of two decades of coerced resource input from fossil-fuelled wealth, renewables and their systems are still relatively unproductive; low load factor generators with short lives, greatly expanded but underutilised networks, and numerous complex and expensive system management tools, from computer controlled demand to batteries as big as the Ritz. Without fossil fuels this elaborate edifice would never have been created, and without the ongoing support of fossil fuels it would come crashing to the ground.
- How quickly could that change? The history suggests slowly at best. Coal converters became autocatalytic quite rapidly, but the resulting energy transition was still slow. Even with primitive mining techniques and at poor thermal efficiencies coal yielded a high energy return that quickly produced technologies that improved the steam engines themselves and opened the way for other fuels. And by quickly, we mean just over 150 years, from the Newcomen engines of the early eighteenth century to the mature high pressure Trevithick engines of the latter half of the nineteenth, and the Parsons turbines that are with us today, driven by a variety of fuels, coal still amongst them.
- Energy transitions are unavoidably slow. When the incoming energy source and its conversion devices are autocatalytic, yes, there will be progress but it will still take time for significant levels of self-reproducing deployment. And renewables aren’t yet autocatalytic.
- So there is a hazard in driving fossil fuels prematurely from the economy. If we were to cut the throat of the fossil fuel sector at this instant the modern economy would disappear taking the renewables sector with it. Modern renewables rely, as we all do, on the timely provision of complex material structures that can be generated only by conventional energy, and mostly by fossil fuels. Cut the umbilical cord too soon and the foetus dies.
- If there is a viable climate policy in the long term it will be just one more complex and timely state of matter created by the fossil economy. Gas, oil, even coal are with us for the long term; they remain essential to current prosperity and social progress, and, paradoxical as it may seem, they alone can deliver whatever kind of low carbon, self-reproducing and climate friendly economy lies ahead. We just have to be patient.