This posting will provide the Introduction to Mark Mills report titled “New Energy Economy: An Exercise in Magical Thinking”.
Mills is a scientist. Most of the reports that say it is possible to eliminate fossil fuel’s use and replace them with wind and solar, seem to be written by economists. I have nothing against economists as my daughter and son are economists. It is just that I fear that the authors accept the alarmists visions then hang some economic words on that skeleton. Let’s look at Mills’ VC:
Mark P. Mills is a senior fellow at the Manhattan Institute and a faculty fellow at Northwestern University’s McCormick School of Engineering and Applied Science, where he co-directs an Institute on Manufacturing Science and Innovation. He is also a strategic partner with Cottonwood Venture Partners (an energy-tech venture fund). Previously, Mills cofounded Digital Power Capital, a boutique venture fund, and was chairman and CTO of ICx Technologies, helping take it public in 2007. Mills is a regular contributor to Forbes.com and is author of Work in the Age of Robots (2018). He is also coauthor of The Bottomless Well: The Twilight of Fuel, the Virtue of Waste, and Why We Will Never Run Out of Energy (2005). His articles have been published in the Wall Street Journal, USA Today, and Real Clear. Mills has appeared as a guest on CNN, Fox, NBC, PBS, and The Daily Show with Jon Stewart. In 2016, Mills was named “Energy Writer of the Year” by the American Energy Society.
Earlier, Mills was a technology advisor for Bank of America Securities and coauthor of the Huber-Mills Digital Power Report, a tech investment newsletter. He has testified before Congress and briefed numerous state public-service commissions and legislators. Mills served in the White House Science Office under President Reagan and subsequently provided science and technology policy counsel to numerous private-sector firms, the Department of Energy, and U.S. research laboratories.
Early in his career, Mills was an experimental physicist and development engineer at Bell Northern Research (Canada’s Bell Labs) and at the RCA David Sarnoff Research Center on microprocessors, fiber optics, missile guidance, earning several patents for his work. He holds a degree in physics from Queen’s University in Ontario, Canada.
A growing chorus of voices is exhorting the public, as well as government policymakers, to embrace the necessity— indeed, the inevitability—of society’s transition to a “new energy economy.” Advocates claim that rapid technological changes are becoming so disruptive and renewable energy is becoming so cheap and so fast that there is no economic risk in accelerating the move to—or even mandating—a post-hydrocarbon world that no longer needs to use much, if any, oil, natural gas, or coal. Central to that worldview is the proposition that the energy sector is undergoing the same kind of technology disruptions that Silicon Valley tech has brought to so many other markets. Indeed, “old economy” energy companies are a poor choice for investors, according to proponents of the new energy economy, because the assets of hydrocarbon companies will soon become worthless, or “stranded.”1 Betting on hydrocarbon companies today is like betting on Sears instead of Amazon a decade ago. “Mission Possible,” a 2018 report by an international Energy Transitions Commission, crystallized this growing body of opinion on both sides of the Atlantic.2 To “decarbonize” energy use, the report calls for the world to engage in three “complementary” actions: aggressively deploy renewables or so-called clean tech, improve energy efficiency, and limit energy demand. This prescription should sound familiar, as it is identical to a nearly universal energy-policy consensus that coalesced following the 1973–74 Arab oil embargo that shocked the world. But while the past half-century’s energy policies were animated by fears of resource depletion, the fear now is that burning the world’s abundant hydrocarbons releases dangerous amounts of carbon dioxide into the atmosphere. To be sure, history shows that grand energy transitions are possible. The key question today is whether the world is on the cusp of another. The short answer is no. There are two core flaws with the thesis that the world can soon abandon hydrocarbons. The first: physics realities do not allow energy domains to undergo the kind of revolutionary change experienced on the digital frontiers. The second: no fundamentally new energy technology has been discovered or invented in nearly a century—certainly, nothing analogous to the invention of the transistor or the Internet. Before these flaws are explained, it is best to understand the contours of today’s hydrocarbon-based energy economy and why replacing it would be a monumental, if not an impossible, undertaking.
The next installment of Mills’ report will be “Moonshot Policies and the Challenge of Scale”. That will be followed by “The Physics—Driven Cost Realities of Wind and Solar.
The numbers that appear at the end of some sentences are references. I will publish all those at the end of serialized report.