The Grand Energy Transition E-Book

Robert A. Hefner

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Sprache: Englisch

Seitenzahl: 463

Veröffentlichungsjahr: 2009

Beschreibung

A groundbreaking book on solving our growing energy problems In this visionary book, leading energy industry executive RobertHefner puts forth a convincing case about how the world can movebeyond its current dependence on oil and toward a new era of clean,renewable energy. Written with the knowledge and authority of a major player inthis industry, Hefner relates how misguided government policies andvested industry interests have contributed to our current energyproblems and proposes a variety of measures that could encouragethe use of natural gas, solar, wind, and hydrogen. * Convincingly makes the case that natural gas is the essentialbridge fuel to a new era of clean, renewable energy sources * Details how natural gas can help break our oil and coaldependency * Offers a sweeping, historic picture of the world energysituation * Presents a compelling and provocative case that natural gas iskey to our short-term energy problems A well-written and engaging book that mixes personal anecdotesand experiences with insightful analysis, The GrandEnergy Transition is a powerful argument about how we can bestsolve our toughest energy problems.

Leseprobe

Table of Contents

Praise

Title Page

Copyright Page

Dedication

Acknowledgements

Introduction

Author’s Note

Chapter 1 - The Beginning

Chapter 2 - The Grand Energy Transition

Chapter 3 - The Conception of the GET and How It Works

Forces of Energy Transitions

Need for Creative Destruction of Coal and Oil

Summary

Chapter 4 - Rise of the Age of Energy Gases, Decarbonization, and Slowing of ...

Chapter 5 - How the 1970s Misconception of Natural Gas Scarcity Changed ...

Testimony before Congress

Why I Believed in Natural Gas Abundance

How America Created Natural Gas Shortages in the Midst of Abundance

Natural Gas Deregulation and the Prohibition of Its Use

Confronting the Oil Mind-Set Once Again

Intolerable Economic, National Security, and Climate Risks Rise to the Forefront

We Can’t Afford the Same Mistakes about Natural Gas

Chapter 6 - Natural Gas—The Bridge Fuel to Our Sustainable Future

Natural Gas Is Not Oil

Differences between Natural Gas and Oil

Chapter 7 - Natural Gas Abundance

Mother Nature: Cookin’ with Gas

Deepest Wells in the World

Ubiquitous Natural Gas

No Peak Natural Gas

Unconventional Is Conventional

More Natural Gas than the Market Can Use

In the Search for Oil We Find More Natural Gas

More Proven Natural Gas than Is Estimated

Earth’s Vast Supplies of Undeveloped Natural Gas

To the Open Mind

A Case That Earth’s Attainable Natural Gas Supplies Are Equal to or Larger than ...

America’s Attainable Natural Gas Supplies May Equal or Exceed Minable Coal Supplies

Natgas Ascends; Coal Declines

A Call for More Natural Gas Education

A Plea to the World’s Journalists

Chapter 8 - My Historical Grounds for Natural Gas Abundance

How the “#1 Green” Became a Historic Landmark in the Natural Gas Industry

Working to Overcome America’s Regulatory Pricing System That Kept Natural Gas ...

Going to Washington to Tell My Natural Gas Story

Taking on the American Gas Association

Political Infighting over Natural Gas

Meeting with the First Secretary of Energy, James R. Schlesinger

The Great Energy War

Chapter 9 - The Real Inconvenient Truth

The Disease Is Subsidies

Coal’s External Costs

Oil’s External Costs

Macroeconomic Distortion of Subsidies

Good Subsidies, Bad Subsidies

Creative Destruction

Chapter 10 - Our Energy and Climate Challenge—Los Angeles, A Case Study

Chapter 11 - What Won’t Work; What Will Work

The Myth of Clean Coal

Coal to Liquids

Coal to Gas

Oil

Oil Shales and Tar Sands

Biofuels

Hydro and Oceans

Nuclear

Hydrothermal

Natural Gas

Wind

Solar

Hydrogen and Fusion

Chapter 12 - Policies to Accelerate the GET

Decouple the Electric Grid

Policies for Energy Efficiency

Overarching Macro Policy Objectives

A Green Consumption-Based Tax System

A Call for a Twenty-First-Century Energy and Industrial Recovery Plan

Low-Hanging Fruit in the Transportation Sector

Energy Independence and Climate Progress by 2015

How Natural Gas, Wind, and Solar Will Meet This New Demand

Conclusion

Chapter 13 - The Age of Energy Gases: America’s and China’s Opportunity

The Silver Path

Twenty-First-Century Winners

The Hydrogen Economy

America’s Politically Difficult Opportunity

China’s and Asia’s Opportunity

Chapter 14 - Crisis and Opportunity

Notes

Glossary

Recommended Reading

About the Author

Index

More Praise forThe Grand Energy Transition

“Robert Hefner’s excellent book is an important contribution to today’s historic debate on our energy future. It is even more valuable coming from a longstanding practitioner.”

—JON M. HUNTSMAN, JR., Governor of Utah

“I first met Robert Hefner in 1994. We talked about his conviction that natural gas was the energy source of the future and that left a deep impression on me. It was then a minority view, one might even say, a fringe view. He has since been proved right. He saw ahead of most others a trend that has a far-reaching impact on how human society is organized. Like all living things, access to abundant energy and the efficient use of that energy decide which society will succeed in war and peace. Societies which respond earliest enjoy a major advantage.”

—GEORGE Y.B.YEO, Minister of Foreign Affairs, Singapore

“How do we get from dirty, finite, and unsustainable fuels to sustainable life and growth on Planet Earth? Robert Hefner makes a fascinating and readable case for gas as our bridge fuel to a sustainable future. As he argues, energy use will bring civilization together or tear it apart.”

—JOSEPH S. NYE, JR., University Distinguished Service Professor, Harvard and author of The Powers to Lead

“Robert Hefner has been right over the years on gas supply while many energy ‘experts’ have been suspicious, wrong, and not adequately attentive to the data and technical possibilities. Accordingly, his vision about the future role of natural gas deserves serious consideration. He is almost certainly right that natural gas will play a much larger role than previously thought.”

—JOHN DEUTCH, Professor, Department of Chemistry, MIT; and former director CIA, Deputy Secretary of Defense, and Director of Energy Research, Department of Energy

“In The Grand Energy Transition, Robert Hefner describes how the world can make a one-time evolutionary step from the unsustainable current and projected global energy mix to ‘virtually limitless clean gaseous energy sources.’ Some energy experts might be dismissive about Hefner’s vision, but this author did not arrive at his conclusion in a vacuum. A third-generation successful wildcatter and natural gas producer, Hefner has a history of proving the skeptics in the industry wrong. For decades, he argued against the U.S. government and industry pessimism about the future of U.S. natural gas production capacity and once again he has proved his critics wrong. I know of no other person who has consistently been so right about natural gas abundance. U.S. natural gas production has grown an astonishing 20 percent in the past five years due to the development of nonconventional natural gas at half the landed price of LNG in Asia. This well-written book, laced with interesting quotations from scholars, statesmen, and philosophers, should be read by open-minded energy experts, policy makers, and the public at large.”

—HERMAN FRANSSEN, President, International Energy Associates Inc; and past Chief Economist of the International Energy Agency (IEA) in Paris

“The Grand Energy Transition is a timely and thoughtfully written book from one of the world’s leading energy entrepreneurs.The first decade of the twenty-first century may go down in history as the moment when the world woke up to the fact that the political, economic, and environmental costs of its 150-year addiction to coal and oil could no longer be sustained and that a wholesale switch to an abundant and readily available alternative, natural gas, was the only viable way forward. This book provides the wake up call.”

—KISHORE MAHBUBANI, Dean of the Lee Kuan Yew (LKY) School of Public Policy, NUS and author of The New Asian Hemisphere

Copyright © 2009 by Robert A. Hefner III. All rights reserved.

Published by John Wiley & Sons, Inc., Hoboken, New Jersey.

Published simultaneously in Canada.

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Library of Congress Cataloging-in-Publication Data:

Hefner, Robert A., 1935-

The grand energy transition : the rise of energy gases, sustainable life and growth, and the next great economic expansion / Robert A. Hefner, III.

p. cm.

Includes index.

Summary: “A groundbreaking book on solving our growing energy problems. In this visionary book, leading energy industry executive Robert Hefner puts forth a convincing case about how the world can move beyond its current dependence on oil and toward a new era of clean, renewable energy. Written with the knowledge and authority of a major player in this industry, Hefner relates how misguided government policies and vested industry interests have contributed to our current energy problems and proposes a variety of measures that could encourage the use of natural gas, solar, wind, and hydrogen. Convincingly makes the case that natural gas is the essential bridge fuel to a new era of clean, renewable energy sources. Details how natural gas can help break our oil and coal dependency. Offers a sweeping, historic picture of the world energy situation. Presents a compelling and provocative case that natural gas is key to our short-term energy problems. A well-written and engaging book that mixes personal anecdotes and experiences with insightful analysis,The Grand Energy Transition is a powerful argument about how we can best solve our toughest energy problems”—Provided by publisher.

eISBN : 978-0-470-54988-9

1. Renewable energy sources. 2. Energy policy. I.Title.

TJ808.H44 2009

333.79—dc22 2009023129

I dedicate this book to my wife, MeiLi, who was the constant,driving force that propelled it to completion, and to mygrandchildren, especially Steven, the scientist, and their generation,who must work to jet the GET.

Acknowledgments

First, this book would not have been possible without the tireless help of my trusted and superbly capable assistants, Jane Rider, for the transcription of innumerable drafts, and Janet Brewer, for research and accuracy, a particularly difficult job when dealing with energy statistics. Also, thanks to our GHK Team, who kept the company moving forward while I wrote about my life’s work in energy and what I have learned.

Kurt Campbell, the co-founder of the Center for a New American Security, gave me important doses of encouragement, and two of his formidable associates, Sharon Burke and Christine Parthemore, helped me sort through and clarify decades of thoughts.

The Logistical Substitution Models for Energy Use, produced by my great friend and mentor Cesare Marchetti, and long-time energy associate Nebojsa Nakicenovic, were fundamental to the foundation of my GET hypothesis.

My friend and sometimes neighbor, Irwin Stelzer, was the first to encourage me to write. His encouragement led to a series of papers beginning in 1990 on energy and economics that I called the Hefner Reports and a series of papers called the Age of Energy Gases. For more than 30 years, Amory Lovins has described to me the macroeconomic inefficiencies of energy use in the United States and proposed simple, profitable ways to wring these inefficiencies out of our economy. Amory’s works have had a profound influence upon my thinking. I also wish to acknowledge my good friend Peter Krogh, who has always taught big ideas and pushed his students and friends to have big ideas and was the first person to use the motto of this book, “Jet the GET.”

Andrew Cleary and Pat McGuigan provided great help with the manuscript. I must also acknowledge my first mentor, Ray Alf, who challenged me to go through life with a mind that always searched “beyond the limits,” and Ed Schmidt and especially another friend and mentor Tommy Gold, who kept me on that path. Finally, Laurie Glover and David Kennedy, my first partners, who had faith in a very young man and helped jump-start GHK fifty years ago in 1959.

Introduction

The Inextricable Link between Energy and the Economy

This generation of Americans, led by President Barrack Obama, will have unprecedented challenges and opportunities. The challenges will be to resist overregulation of the banking and financial sectors and the constriction of free trade, both of which happened following the 1929 market crash and collapse of the banking system. The opportunities will be to use these times of great change to come together hand-in-hand with our government, just as we did following Pearl Harbor, to industrialize and produce the materials necessary to win World War II, this time to transform our energy systems, regain our energy independence, and lead the world toward the resolution of climate change.

We have overleveraged both our economy and our energy use. We are all now aware how U.S. banks and financial institutions overleveraged our financial system and have seen the costs of bailing out the system in daily headlines. But few people are aware that since the 1970s, we have also been leveraging our economic growth by consuming energy at less than the full-cycle cost. These often-hidden costs are the costs that economists call externalities. These include costs such as the largest part of our trade deficit, which is attributable to oil imports, the military costs of protecting the free flow of oil, the cost of oil-related wars, the cost of gasoline pollution in all our towns and cities, and the related health costs, and the near- and long-term costs of coal’s toxic emissions, such as mercury, acid rain, and particulate emissions, with their related pulmonary health costs. Plus, the hundreds of billions of dollars or, if some scientists and economists are correct, multiple trillions of dollars of future costs attributable to climate change as a result of the buildup of CO2 emissions in the atmosphere, mostly the result of energy consumption, 80 percent of which is from coal and oil use. When energy consumers don’t pay these real full-cycle costs, we are sustaining economic growth by burdening the taxpayer, society, and future generations with these costs, which are eventually paid by the individuals directly affected, by the general taxpayer, or are accruing as additional government debt.

Our economic system and our energy system are inextricably connected because, unlike money, the expenditure (use) of energy is required for the production and consumption of all goods and services. Both our financial system and our energy system must now be deleveraged and rebuilt on sound economic principles. To do so in the energy sector, we can and must accelerate the Grand Energy Transition, the GET, so we can build toward an economic system of sustainable growth and, while doing so, unleash the next unprecedented economic expansion.

Our ongoing financial bailout is organized to create stability in the banking and financial system and is not a plan focused on the creation of sustained economic growth and new jobs. We need not freeze further government spending; rather, we must immediately eliminate all stupid spending. What is now needed is smart spending for an Energy and Industrial Recovery Plan financed and guaranteed by government, similar to the industrialization needed to win World War II. What is needed is a policy organized to restore America’s confidence, regain our energy independence, and place us on the path not only to sustainable, clean energy consumption but to sustainable economic expansion. As the old saying goes, at this critical economic juncture in America’s history, we must “spend money to make money.”

President Obama has the bully pulpit and must use his abundant talent to rally the American people behind an Energy and Industrial Recovery Plan to, among other things discussed in this book, convert at least half of America’s vehicle fleet to compressed natural gas (CNG) by 2015. To do so would reduce our oil imports by over 5 million barrels per day and save Americans tens of trillions of dollars in payments to foreign oil producers over the coming decades. To do so would ensure that when global “peak oil” occurs, America will have dodged that deadly bullet. To do so would unlock hundreds of billions of dollars in new capital expenditures by America’s automobile and energy industries, as well as their collateral industries. To do so would result in tens of billions in new annual payments to American farmers and landowners as domestic natural gas producers develop and produce new natgas supplies. To do so could create a million new American jobs. To do so would regain our energy independence. And to do so would unleash America’s next unprecedented and sustained economic expansion.

No one likes deficit spending, but a $1 trillion Energy and Industrial Recovery Plan, as presented in Chapter 12, to ensure America’s economic resurgence is what is now needed to regain American confidence in our own economic system, to create new, well-paying jobs so Americans can begin paying off their personal debts, and to jumpstart the next sustained economic expansion so America can also pay off its national debt and put our government’s financial house in order.

Some might fear that higher deficit spending could spur a run on the U.S. dollar, but I say no. I say no because a well-formulated Energy and Industrial Recovery Plan for the long-term, designed to regain our energy independence, significantly reduce payments to foreign oil producers, and stimulate domestic growth in our unprecedentedly powerful economic system, will show the world that America is back on track. I contend that no other policy could instill such confidence in our currency. The U.S. dollar would regain and maintain its status as the most important global currency. Global faith in the U.S. economy would be restored and the United States would once again become the “go-to” economy for global capital. And not least, the United States will have taken a giant step forward in restoring our global soft power.

I am the third generation in the energy business. I have spent my entire life exploring and producing natural gas and studying energy use in society. I have experienced firsthand the politics of formulating energy policy and the booms and busts that have come to America’s domestic energy producers as a result of our past start-and-stop, largely erratic, and mostly short-term energy policies. This is why I took up the challenge to write this book, because I wanted to share with the American public, our Congress, and President Obama and his administration my own unique experience and theories on how we can and must move the GET forward.

This book describes my theory that we must think about our energy sources not as individual fuels such as coal, oil, or natural gas but rather by their state of matter, either as a solid, a liquid, or a gas. By doing so, the complexity of the energy sector is eliminated to reveal the elegant simplicity of our ongoing Grand Energy Transition. The GET is civilization’s continuing technological energy evolution, which is leading us away from solid and liquid fuels and toward the Age of Energy Gases (natural gas, wind, solar, and hydrogen). This book shows how the GET is creating a clear and irrevocable energy path forward, and how the GET itself, driven by the developments of civilization, reveals the most likely energy winners and losers. This book makes the case that North America is blessed with abundant supplies of natural gas that can be scaled up in the near-term to become the bridge fuel to our energy-sustainable future and that these supplies, supplemented by Alaskan natural gas and the world’s liquefied natural gas (LNG), are adequate to fuel at least half of our vehicle fleet for decades to come, as well as much of our existing power generation and all new electric power needs not met by wind, solar, and nuclear.

As I write this in the spring of 2009, America’s natural gas exploration and production industry is once again going through a bust following a boom. This is because such large supplies of new natural gas have been recently developed that our domestic market has been overwhelmed. Over recent years, America’s superbly capable independent natural gas producers have been so successful in deploying new technologies and innovations to produce America’s natural gas supplies at prices about half that of oil that we have developed a supply glut, and once again, the bottom has dropped out of natural gas prices. For instance, in the Midcontinent and Rocky Mountain regions, natural gas spot prices have dropped from over $10 per Mcf ($60 per barrel oil equivalent) to, in some cases, less than $2 per Mcf ($12 per barrel oil equivalent). As a result, just as we are entering an economic downturn and are desperate for new economic growth and new jobs, tens of billions in annual revenues are being lost to millions of American farmers and landowners, independent natural gas producers, their shareholders, and energy service companies, unnecessarily adding to our ongoing economic contraction. Tens of billions of dollars of capital expenditure reductions have been announced, and multitudes of drilling rigs are stopping their work and their crews are being laid off. Tens of thousands of jobs are being lost once again, adding to America’s joblessness and exacerbating the problem of people shortages in our industry, and all because America has no policy to use its clean, abundant natural gas instead of dirty coal and imported oil.

Without such an Energy and Industrial Recovery Plan, instead of the benefit of a million or more future new jobs in the energy and automotive sectors and the follow-on benefit of the economic multiplier here at home, Americans will go on sending to foreign producers trillions of dollars each decade for the oil to run our cars and trucks, all to the detriment of our economy and our trade deficit.

It is my belief that this book describes a clear energy path forward that can be accelerated by the policies I have recommended—policies that, if boldly embraced by the Obama administration and Congress, will not only accelerate our economic recovery but also lead to America’s next great and unprecedented economic expansion.

Robert A. Hefner III March 2009

Author’s Note

This book was written over a period of two years; the ongoing 2008-2009 global financial crisis and its impact on energy and the economy may have altered some numbers.

Chapter 1

The Beginning

Sit down before fact as a little child, be prepared to give up every preconceived notion, follow humbly wherever and to whatever abyss nature leads—or you shall learn nothing.

—THOMAS HENRY HUXLEY

My long road to understanding the Grand Energy Transition, the GET, began on September 14, 1950. I was a 15-year-old student at Webb School in Claremont, California. On that day, my biology teacher, Dr. Ray Alf, changed my life forevermore. It was on that day that I had my first Eureka! moment. Dr. Alf took us out to a small pond on campus where we collected a bucket of pond water. He had said that a microcosm of all life was in one drop of pond water. We brought it into our basement laboratory where he taught how to make slides with one drop of his treasured pond water to view under high-powered microscopes.The depths of that life-changing experience evoked within me a message far beyond my 15 years. It has served to guide me in my quest for the understanding of energy within civilization.

That evening, I wrote the following in my biology notebook:

On Thursday, September 14, I reached a new pinnacle of experience. It was on this day that I bridged time and space with my microscope and saw with my own eyes a whole new world unfold before me. The hustle and bustle of the world we know was there. The age-old law of “survival of the fittest” was there also. What was different about this tiny world, contained in one drop of pond water, was what made the 45 minutes so memorable to me. That difference was the amazing animal life, so small and every bit as capable to cope with the problems of its world as I am in mine. Here was a time for philosophical thought, for I had always considered myself superior to protozoa. What I had neglected to consider was the relativity of the protozoa to myself. It was not the mere view of this minute world that was amazing, but it was the questions it raised in my mind. Here among the parameciums, rotifers, and cyclops, I found what I considered a truly great experience and perhaps an answer to some of life’s great problems.

In this book, you will see that the roots of my understanding of how energy evolves within civilization are grounded in the survival of the fittest and the natural selection of intelligent beings to seek growth within quality of life.

The man who opened my eyes to the mystery of energy and evolution, Ray Alf, was born in 1905 in Canton, China, to missionary parents. His second language was Cantonese, and he often recited the Lord’s Prayer in Cantonese. He was a small, wiry man, full of energy and passion. One of his passions was to teach—particularly concepts about the origin of life, evolution, and how humans have only been around for the last few seconds relative to the history of life on Earth. He always believed that only through teaching could one leave behind a meaningful heritage for humanity. He certainly accomplished that with me.

At the time, he had a unique way of teaching evolution that has since gained much more scientific stature. He believed evolution would work through natural selection as Darwin taught, with small adaptations to local environmental changes over geologically long periods. But, as he was also a renowned paleontologist, he understood that evolution always seemed to suddenly make great leaps forward. He called this crisis “the crisis of change.” Ray Alf became my first mentor and revealed to me the hidden universe that led me to a life in science. He was an unbounded thinker, and by example taught us to go beyond the limits.

Ray Alf opened the door through which I passed into a lifetime of energy exploration and thinking about energy, relativity, the origin of life, and evolution. It was from this foundation that I pushed myself forward, always keeping in my heart Ray’s guiding principle to be an unbounded thinker and to go beyond the apparent limits.

It is my belief that it is humanity’s God-given, inherent right to achieve sustainable life and growth on Earth. This book is about how I believe civilization will achieve this destiny.

Energy is a natural, hidden, and invisible system within civilization. Civilization cannot exist as we know it without the consumption of vast quantities of energy. Therefore, energy consumption is a moral good. It is fundamental to the creation and functioning of societies. Although economists argue with me, I believe energy is more fundamental to the functioning of an economy than is money. There cannot be an economic system without the consumption of energy. The production and provision of all goods and services and their consumption requires the use, or I would prefer to say expenditure, of energy. In economics, energy quickly exhibits fundamental pervasiveness, for it has a significant and continual relationship to all economic and demographic variables. The gross domestic product (GDP), employment levels, inflation, economic growth, and even the amount of spendable income available to the individual, the family, or local, state, and federal governments all relate to the use, availability, and price of energy.

Today, humanity is in an energy and climate crisis of our own making. We have altered and placed in grave danger our economy, environment, and the security of our societies by the energy we use. Indeed, the magnitude of the crisis—even the crisis itself—has been hidden from our view. The world does in fact operate as Ray Alf taught. There is always more going on than we can see or have yet envisioned. It will be the awareness of this economic, environmental, and societal crisis that will become the driving force of civilization’s next evolutionary step, the one taking us to sustainable life and growth on Earth.

I hope this book about my concepts and ideas will add to energy solutions that will accelerate us through the Grand Energy Transition, the GET, to a sustainable destiny. This book is not intended to answer the millions of good questions about energy use and our energy future, nor is it a text about the details of energy production and consumption. Rather, it introduces a new way of thinking about energy and looking at the evolution of energy within civilization and, with this understanding, of forecasting the best possible comprehensive solution to today’s formidable energy problems and a clear path forward to a new era of sustainable life and growth on Earth. So, most important in these times of limited monetary and human resources, the development of civilization itself and the evolution of the GET are showing us, our leaders, and policymakers the most likely energy winners and losers. At this point in history, we don’t have time for the losers, so we all must take heed. Also, I am sure that along the way, this book will accomplish my other goal of sparking controversy and creativity that have always and will forevermore lead us forward.

Chapter 2

The Grand Energy Transition

The helmsman must guide the boat by using the waves, otherwise the boat will be submerged by the waves.

—CHOU EN-LAI

The GET

The Grand Energy Transition (GET) is based upon my theory that in order to best understand humanity’s energy past, present, and future, we must think about all the energy sources in their form of matter, solids, liquids, and gases, rather than individual fuels such as coal, a solid, oil, a liquid, or natural gas, a gas. By doing so, we see a natural evolution of energy within the development of civilization. What is revealed by this concept is a transition of elegant simplicity that cuts through the complexity of energy use, policy, and politics.The GET or, more accurately, civilization itself through trillions of energy choices based upon economic utility is showing us the way forward and determining the future’s most likely energy winners and losers.

The GET should be understood as a one-time, evolutionary step forward for humankind. The GET is the liquid transition between the unsustainable solid energy sources of our past and the virtually limitless, clean, sustainable energy sources of our future. Energy gases will provide civilization with what I believe to be its destiny: sustainable life and growth on Earth. The GET will transform humanity’s energy use from dirty, solid fuels to clean, environmentally sustainable gaseous fuels. The GET is the liquid transition; after all, liquid is a transitional state of matter, between these millennia-long solid and gaseous energy epochs of human civilization. The GET is a largely invisible transition that will have a larger long-term impact on how societies live on Earth than either the War on Terror, the Rise of Asia, World War II, or the Cold War. The acceleration of the GET will be civilization’s most important challenge during the twenty-first century.

The GET is driven forward by the cumulative result of all human activities. It is derived from the natural human imperative to seek higher levels of economic standing and quality of life through creativity, innovation, and invention. The GET can be compared to Charles Darwin’s theory of natural selection for the evolution of life. Just as Darwin compared natural changes in nature with societal changes within countries, I compare the energy changes of the GET to natural selection, driven by hundreds of trillions of individual energy choices each year.

The GET began near the middle of the 1800s, with liquids beginning to replace solids, and will take some 200 years to transition to its final stage: the Age of Energy Gases. Luckily, in the scale of history, most of the GET is behind us, so now all we need to do is finish the job. Setting politics aside, this could be achieved by 2050 because it does not require Star Wars technology. Indeed, most of the technology is in-hand and we live in the time of history’s most rapid rate of technological accomplishment. By the middle of this century, most of the world’s people, depending on their individual governments, can be living in an environmentally sustainable economy that is no longer producing increasingly intolerable pollution nor CO2 emissions sufficient to drive global climate change. But in order to accomplish this goal in a timely way, we must come together as one human population behind energy-enlightened leaders and begin now to accelerate the GET. Our motto will be “Jet the GET.”

Although the GET is the overarching liquid transition from unsustainable solid to sustainable gaseous fuels, within each transitional phase, cyclical energy substitutions also take place. For instance, within solids, coal displaced wood as a principal energy source; within liquids, whale oil was displaced by petroleum oil; and today, biofuels are being substituted for petroleum products. Although natural gas will continue to displace growing quantities of both solid and liquid fuels, it is already being challenged for market share by its sister fuels, wind and solar, in the wave of energy gases.

Civilization fueled its growing energy needs for millennia with solid fuels, mostly wood, grasses, dung, and coal. And just as the solid fuel era lasted for millennia, so, too, will the gaseous fuel era that I call the Age of Energy Gases that is the subject of Chapter 13. Let me say at the outset that, in addition to natural gas, the Age of Energy Gases includes all the energy gases—wind, solar, hydrogen, and, when it arrives, nuclear fusion, which is best described as the “sun in a box.” The Earth’s atmosphere is a gas, and wind is driven by the Earth’s daily heat from the sun. The sun is mostly burning hydrogen gas (actually, the fusion of hydrogen), and each day the Earth is bathed in virtually limitless solar energy. The sun is our solar system’s public power plant. Hydrogen itself is a gas and is the universe’s most abundant element. On Earth, hydrogen is a potentially vast, virtually unlimited source of energy. When hydrogen is used as a fuel, it turns into heat and water and is, therefore, totally clean energy. So if hydrogen gas is separated from water by electrolysis or in other environmentally benign ways, it becomes a virtually limitless and totally clean energy that, in synergy with solar and eventually nuclear fusion energy, can sustain population and economic growth on Earth for millennia to come. The final phase of the Age of Energy Gases will be the hydrogen-based economy, running principally on hydrogen, solar, wind, and eventually nuclear fusion.

Carbon-light natural gas, which contains only one carbon atom with four hydrogen atoms, is already growing to become our first major step toward hydrogen. Natural gas will continue to rapidly grow in the energy mix and become our principal bridge fuel to humanity’s ultimate sustainable energy goal.You will see in Chapter 3 how the GET has been decarbonizing and cleaning up our energy system since it began over 100 years ago.

Throughout the history of civilization, each new fuel that has been introduced has been a better, more capable fuel that enhanced society in many ways. Each new fuel initially brings to society a large measure of new efficiencies and a burst of new technologies that lead to a new pulse of previously unimaginable economic growth, as well as environmental improvement and better quality of life in a more modern and sophisticated world.

But each new fuel also brings with it the seeds of its own demise. Each fuel is phased away not because we have run out, but because its costs to society as a whole, including economic, environmental, and security costs, become so high and bring risks so large that the fuel loses utility to consumers and the nations within which they live. In the case of carbon-based fuels, particularly carbon-heavy coal and oil, their very success created their own limits because the quantities of their use became incompatible with the growth of society. This is why our sustainable destiny must be the hydrogen economy, as hydrogen fuels create no limits to life and growth on Earth.

Civilization began around the wood fire, and wood and bronze-iron-based technologies, along with human and animal labor, remained our principal energy technology system for thousands of years until they began to be replaced by coal in the late 1700s. By the time coal got a foothold in the energy market and began its rapid growth, forests in England, Europe, and Asia had been ravaged. Initially, coal’s more modern technologies not only improved energy efficiency many times and helped create economic growth never before experienced, but they also improved the quality of life for the general society. Even the environment improved as the use of coal slowed down the loss of great natural forests. Coal is a better fuel than wood because it packs a larger energy punch in a smaller and more transportable package. Coal was many more times efficient in providing heat for industrial uses, such as making steel.

Because each new fuel is in so many ways better, more versatile, and more efficient, each new fuel gives rise to a burst of new technologies that grow up around that fuel to power expanding innovation and new inventions. In 1769, James Watt invented the steam engine that, in turn, gave birth to an explosion of new and improved technologies. The coal-fired steam engine brought with it factories, mass production, and, because of coal’s high energy mobility, manyfold improvements in the transportation sector, including larger and faster railroad engines and steam-powered ships. Trade and travel were greatly expanded and industrial production proliferated, such that together they brought the then-largest economic pulse ever experienced in human history, the Industrial Revolution.

The Industrial Revolution began in England, with its large coal deposits. England rode coal’s energy and technology wave to the heights of the global British Empire upon which “the sun never set.” But coal’s success became its limits. At the height of the Industrial Revolution, the harmful side effects of dirty coal had affected everyone’s life, rich or poor. Coal is dirty, mostly carbon, often radioactive, and when burned it emits CO2, sulphur fumes, mercury, arsenic, and large amounts of heavy carbon dust and particulates. England, the very heart of the Industrial Revolution, became highly polluted, and homes, furniture, and clothes were coated in carbon dust.This became a significant factor in the nation’s general health problems. Coal and all that surrounds its use became a principal contributor to the conditions of Charles Dickens’s London. London’s glorious buildings eventually turned black from so much carbon dust and particulates in the air. The heavy humidity of the British climate often turned this airborne pollution to dense fogs described at the time as being as thick as pea soup. These fogs were so dense that transportation slowed to a crawl during the fogs, which had the follow-on effect of a large negative impact on the economy. At the peak of the Industrial Revolution, coal had created the conditions of its own eventual demise—conditions that would impede Britain’s technological progress for decades. Yet because an energy system is like one’s life blood, its use goes on, and its vested interest in both industry and politics run so deep that it requires either a great, enlightened, and powerful leader; catastrophic disaster; or war to accelerate the evolutionary change to the next energy wave.

Although I do not say that the demise of the British Empire was entirely linked to the use of coal well beyond its most effective and efficient limits, I do believe the depth of the coal infrastructure, the size of its external costs to society, and its vested economic and political interests slowed England’s economic and technological progress for decades during the twentieth century. Unfortunately, what was originally a better energy technology was left in place too long following the peak of the Industrial Revolution. Coal’s deeply vested economic and political interests slowed the GET and impeded economic and technological progress. This is precisely what Harvard’s renowned Austrian economist Joseph Schumpeter meant when he postulated that progress always requires “creative destruction.”1 Our energy system is deeply embedded within our economy and equally deeply vested within our political system. In order to overthrow the energy status quo and release the next burst of energy invention and innovation, large measures of creative destruction must take place.

Coal is a solid and is more cumbersome to transport than liquid oil and oil fuels that pack more energy punch per pound. By the beginning of the twentieth century, for both environmental and technological reasons as well as competitive prices, oil fuels were beginning to make headway by displacing coal. Oil, with less dirty carbon and more clean hydrogen, was a more efficient, more versatile modern technology. Oil soon began to command a larger share of the energy market. Winston Churchill had the foresight to see oil as a better, more mobile fuel with more bang for the buck for the British Navy in 1912,2 but it was World War II that accelerated oil’s use.

Still, coal’s vested interests ran so deep that it took Lady Margaret Thatcher, the most powerful prime minister since Churchill, to break coal’s ironhanded grip on the British economy in the 1980s. Since then, natural-gas-fired electric generation has grown from virtually nothing in the early 1990s to producing nearly one-third of the United Kingdom’s 2006 output.3 In an energy sense, England has leapfrogged the United States because it is farther along in the Age of Energy Gases. The pea-soup fogs that lasted well into the 1950s are now gone. London has since cleansed itself, and its glorious buildings are once again sparkling white. Today, London stands as one of the great jewels of global cities. By throwing off the coal yoke, London and the British economy transformed themselves, and the great city once again offers its citizens a world-class quality of life.

Oil became the next great energy wave and America rode oil’s great wave to what some call the American Empire. Oil provided the life blood for post-war expansion to the modern economy and now the globalized, connected world. The transportation sector was revolutionized by the use of oil and its principal technologies, the automobile and the airplane. These two innovations of transportation radically changed how people lived and how far and fast they traveled. The turbine engine took air travel a step further, and airlines began carrying millions of people to all points of the globe. Oil’s wave was accelerated by the necessity to pursue and win World War II. Great innovations came out of that effort—principally, the transport and chemical technologies surrounding oil and the development of the computer and the Internet that for the first time provided civilization with the ability to live in and benefit from a truly globalized economy and a globalized, modern transportation and communication system.

The tearing down of the Berlin Wall and the collapse of the Soviet Union, coupled with Deng Xiaoping’s opening of China, created the political circumstances for civilization to become a global society for the first time, connected to each other and to virtually all of accumulated human knowledge at nearly the speed of light. But today, oil has also created its own limits. Coal’s story of glory and decline is now being repeated by oil.

Several factors have resulted in a major reduction in the economic utility of oil:

• Oil contributes to pollution and global climate change.

• The oil industry’s difficulties in meeting current and near-term consumer demand.

• Prices fluctuate wildly, sometimes rising rapidly. Recently, for example, they reached levels that brought the entire world great hardship and economic instability that exacerbated the ongoing global economic contraction.

• Building geostrategic tensions are often related to oil use, particularly for the United States, which bears the greatest burden in policing oil’s free global flows.

• There are macroeconomic consequences to enormous, unbalanced concentrations of wealth in oil-rich countries, which contribute to U.S. trade deficits and diminished value of the U.S. dollar.

Oil has indeed begun its twilight years. In the long view of world history, liquid oil will become a short-term transition between the two-millennia-long energy epochs of unsustainable, finite solids and sustainable, virtually unlimited gases. This time, it is America’s turn to deal with not only one but two deeply embedded, out-of-date energy technologies—coal and oil—that, barring enormous political will—tantamount to a “man on the moon” commitment to change—are likely to inhibit America’s future for at least the first half of the twenty-first century. I fear that America’s coal and oil infrastructure and their deeply embedded economic and political interests will again slow the GET within the U.S. economy and contribute to America’s relative decline, as compared to the rise of countries already committed to major twenty-first-century energy changes.Those countries committed to the acceleration of the GET into the Age of Energy Gases and creative destruction in the energy sector will be the twenty-first-century winners.

Exhibit 2.1 puts the GET in the scale of history.

In Chapter 3, I will describe what brought me to conceive the idea of the GET and how it is driven by the evolution of civilization itself.

Exhibit 2.1 Earth Energies for the Millennia

Chapter 3

The Conception of the GET and How It Works

To the extent humankind is eternal, resources are infinite.

—ROBERT A. HEFNER III

My father and grandfather (who started his career in 1903 at Spindletop, Texas’s first giant oil field) taught me about the oil industry and much of its history. My education at the University of Oklahoma hooked me into a lifetime fascination with exploring the Earth’s geology and a desire to learn more about how the Earth is “alive” with constant motion and change. Intensive study of natural gas led me to the realization that natural gas is not really part of the oil industry, but only a by-product of oil exploration. That forced me to think about why, how, and where natural gas (natgas, as modern traders call it) could be put to better use and achieve a price equal to oil, or even a premium based on its environmental superiority and its domestic security advantage.

My friendship with cosmologist Tommy Gold, one of those out-of-the-box thinkers, expanded my thinking beyond Earth and the solar system to the universe itself.1 My later friendship with Cesare Marchetti and his associate Nebojsa Nakicenovic, at the International Institute for Applied Systems Analysis (a think tank located south of Vienna, Austria), introduced me to “the dynamics of energy systems and the logistic substitution model,”2 upon which I have based much of my work on energy trends. Their work showed me that in order to best view energy trends, one must not look simply at past, present, and estimated future levels of consumption and potential energy resources, but, rather, at the percentage that each energy source is able to supply in the global energy mix over time. The next question is why each energy source gains or loses its percentage of the energy mix.

These decades of work led to another Eureka! moment, as I looked at energy in what may be a revolutionary way. Instead of attempting to think about each fuel source based upon its individual attributes, such as whether it is dirty or clean, domestic or foreign, renewable or not, virtually unlimited or constrained, or even at trends in its quantity of consumption, we must first look beyond each fuel, to reveal the elegant simplicity of transitions that I now call the Grand Energy Transition, the GET.

By viewing energy in its principal state of matter—either a gas or a solid or the transitional state of matter, a liquid—trends emerge that I believe clearly show how humanity has adapted energy sources for its needs through natural selection and how trends from the past show a clear way forward to our energy end goal for millennia to come. As Caltech’s Carver Mead says, by “listening to the technology,” we are pointed in a clear direction forward.3 Human adaptation to daily life has created constantly changing, slow-moving, and powerful waves of energy consumption that always point us in the direction of a cleaner and greener environment, and enhanced economic efficiency for accelerating growth that is more affordable to society as a whole.

The GET is transforming energy use, its technologies, and fuels from:

• Solid and liquid sources to gaseous sources

• Dirty fuels to clean fuels

• Largely carbon-based to largely hydrogen-based fuels

• Chemically complex to chemically simple

• Inefficient technologies to highly efficient technologies

• Large, capital-intensive, centrally located energy plants and facilities to small, distributed facilities

• Nineteenth- and twentieth-century energy systems to twenty-first-century energy systems

• Low-tech dumb systems to high-tech smart systems

• Finite fuels to virtually infinite fuels

Exhibit 3.1 shows the elegant simplicity of the GET—the transition from high-carbon solid and liquid fuels to hydrogen-based gaseous fuels, from unsustainable to sustainable life and growth on Earth.

Exhibit 3.1 GET Waves

Forces of Energy Transitions

Energy transitions are so powerful because they emanate from each individual, family, business, and government’s daily energy consumption and are so slow moving because they are the net result of each individual’s daily habits, and habits are hard to change. Energy transitions are moved forward by three forces, listed in order of their increasing importance:

1. Government intervention

2. Leadership

3. Individual behavior

The first and least powerful is government intervention that works well when policies are put in place that facilitate the direction of the GET. Unfortunately, because government policies too often are the result of deeply vested interests and effective lobbying, they often work in the opposite direction and slow down an ongoing energy transition. We see the result of a period of massive government intervention—largely in the wrong direction—beginning in the 1970s.

The second is leadership, which has often been a powerful force of change. However, no matter how charismatic, enlightened, and powerful a great leader may be, in the case of energy transitions, the timing of history must also work as a catalyst for such great change. Luckily for our world today, I believe the accelerating global awareness of our great energy and climate problems have brought humankind to that threshold through which such a leader or leaders may soon step.

The third and by far most powerful and fundamental driving force of an energy transition is each individual’s actions and reactions to the perception of both the short- and long-term price of energy, its availability, and its effect on their standard of living and quality of life.

The forces that create energy transitions are incredibly complex, but when viewed in the context of energy’s form of matter—gas, solid, or liquid—they reveal themselves in elegant simplicity, and in so doing have always carried us in the direction of a more sustainable energy future. Indeed, I believe that if we “listen to the technology,” it will always point toward humanity’s ultimate energy goal of sustainable life and growth on Earth.

Evolutionary waves of energy consumption are created by the cumulative choices and habits of each individual within the economy. There are energy expenditures imbedded in all goods and services.This process was best described in 1776 by the moral philosopher Adam Smith in his treatise The Wealth of Nations, as the working of society’s “invisible hand.” Our invisible hands drive the slow-moving, long-term process of energy evolution.

Each individual is continuously making either conscious choices about how to consume energy based on the momentary interaction of the price signal and human need, as well as a possible environmental or moral consideration, or largely unconscious energy choices based simply on daily personal habits. For example, how often one goes to the supermarket, whether one sleeps with the window open or the air conditioner on, whether one shops online or at the mall, drives oneself to and from work, carpools, or uses mass transit, and whether one drinks bottled water or tap water are all energy decisions. Human choices and habits are generally based on the classic economic definition of utility and are changed by the recognition that costs have become too high for our pocketbook or that our pattern of life is no longer beneficial for our long-term well-being. Well-being is the interaction between our drive for a higher standard of living and quality of life. It is the balancing of all life choices by each individual at a precise moment in time that creates the utility of choice. It is the cumulative effect of each individual’s choice that determines our global energy consumption.