Bill Gates: Energy Visionary? (energy Manhattan project, yet again)
“If America can put a man on the moon, why should we stay in servitude to the first and second laws of thermodynamics? What we plainly need is a Manhattan Project–like the one that gave us the atomic bomb but not like the one that narrowly missed finding a cure for cancer.”
- Paul Samuelson, “Tragicomedy of the Energy Crisis,” Newsweek, July 2, 1979, p. 62.
“A group of industry leaders, including Microsoft chairman Bill Gates and General Electric boss Jeff Immelt, stepped up calls for a Manhattan project for low carbon energy last week urging the US government to significantly increase investment in energy research and development.”
- Danny Bradbury, “Gates and Co Demand Manhattan Project for Energy.” BusinessGreen.com, June 14, 2010.
Just as as the polls start finding that nobody thinks global warming matters much, and just as hockey stick predictions of catastrophe fall apart in a scientific scandal, guess who turns up at the White House?
Bill Gates! And the billionaire wants your money to federally fund research on “breakthrough” energy technologies to cope with carbon, an increase between $3 billion and $16 billion a year, possibly forever. The Wall Street Journal apparently lost its secret decoder ring and quotes him: “It’s the only way you’re going to get to the goal of not driving extreme climate change without extreme pain.”
In a video clip he says that ten years of research would mean that by 2030 “we’d be in a position to change the transportation infrastructure to zero carbon,” and likewise for electricity. Red ink in Washington a problem? No problem with “a modest energy tax,” or “cutting subsidies to fossil fuels.”
Subsidies? The U.S. Energy Information Administration defines them and finds that in 2007 coal got $932 million and gas and petroleum liquids got $2.1 billion. Even if your Congressman votes to kill them totally, that’s still only $3 billion. But before even hoping for any of this recall that your Congressman is the person who put the subsidies in place. Since $3 billion is rock bottom in Bill’s wish book, we are probably talking taxes or bonds for the rest.
Meet the New Energy Experts
Bill Gates didn’t go to Washington alone. He is a member of the American Energy Innovation Council (AEIC), made up of:
- A retired Lockheed Martin executive (share price down 27% since Oct. 2007, S&P down 31%);
- The CEO of Xerox (down 48%);
- Bank of America’s Chairman (down 70%); and, of course;
- Jeff Immelt of GE (down 61%).
As for the other members’ firms, Microsoft is down 22 percent and Cummins Diesel is unchanged. The final member is renewables venture capitalist John Doerr, whose firm counts Al Gore as a partner.
Got it? A group of executives who have helped destroy billions of shareholder wealth (even relative to the market decline) have decided they know how to save America and the world. Oh, and it has to be done with your money rather than theirs. Note that the AEIC contains no one remotely related to the production of real energy, not even some exhibitionist CEO of a regulated utility wailing his concern for the planet as long as his carbon allowances come for free.
And the Council’s advisors? Lots of scientists, not a single economist.
National Energy Plan Redux
Best to sit down before learning that the Council’s first recommendation is for an “Independent National Energy Strategy Board,” a “small, politically-neutral high-level group with a lean operating budget and a focused mandate.” Exactly who appoints them is unstated. They will make up a “National Energy Plan” that’s “ambitious but achievable,” and its nice that they can make a call on the latter in advance.
The Plan would “also assess political path dependence questions” like “[c]an the utility industries be reformed to align with the nation’s 21st century aspirations.” The aspirations are not further specified, but I’ll bet mine are racier than yours. We start from an “in depth assessment of end uses” and their “potential for improvement,” after which things go to “special federally chartered corporation to develop and demonstrate large-scale energy technologies.”
Enthusiastic yet? We haven’t even gotten to the creation of “Centers of Excellence” in research, along with an energy equivalent of the Defense Department’s Advanced Research Projects Agency. The payoff will come with a “New Energy Challenge” program that will build large-scale pilot projects. Your money, their choices.
Yo, Mr. Gates. Do you remember what you did after leaving Harvard? You and some friends went down to Albuquerque to spend several months sleeping in shifts in a motel room near an industrial park. You came with nothing but an absurd expectation that something big might happen if you could figure out how to program a stone age computer called the Altair, whose manufacturer was belly up a couple of years later. You lived with a belief that what you were doing might just someday transform the world, and you lived to see it as reality.
Can you imagine where you would be now had there been a National Computing Strategy Board to coordinate research and investments? None of us really want to know what might have happened, although there is a chance we would have gotten something better than Windows Vista.
Private Innovation, Thank You
We already had a program a lot like AEIC’s back in the Jimmy Carter days–you can see the remnants of worthless coal gasification plants to this day. They were built in expectation of the imminent exhaustion of the nation’s natural gas, and along with them came thousands of pages of laws and regulations to maintain a just price for what little gas was left.
The biggest energy breakthrough of our lifetimes is happening right now, and without a National Energy Strategy Board. Shale gas is already reshaping the world’s politics and economics. It will do so for the next century, be largely beyond the control of governments, and most of this will be good.
All quotes and video are reachable from the AEIC site.