Robert Bryce: Want to live in Stone-Age Poverty? Then tie your future to Wind Power

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Robert Bryce picked the wind power fraud for what it is from the very beginning.

In his 2010 book “Power Hungry: The Myths of “Green” Energy and the Real Fuels of the Future” (Public Affairs), Bryce skewered every one of the myths relied upon by the wind industry to peddle its wares; and went on to predict the massive benefits of the US shale gas revolution – in terms of both cheap energy – operating as a boost to a flagging economy – and as a method of reducing CO2 emissions in the electricity sector.

We’ve covered some of his recent writings on US energy policy and the wind power fraud (see our posts here and here and here). Bryce recently published another cracking book “Smaller Faster Lighter Denser Cheaper: How Innovation Keeps Proving the Catastrophists Wrong” (Public Affairs) that loads up on the nonsense that is US energy policy today: we covered a review of Bryce’s latest by the New York Times in this post.

In this video, Robert lays out the key arguments as to why cheap, reliable sparks are critical to the growth, wealth and development of Nations. While access to power is something we – in the developed world – smugly take for granted, for the billion or so at the bottom of the development heap it is the ONLY path out of poverty. And for those struggling to escape deprivation and darkness, the answer is most certainly not insanely expensive and unreliable wind power. To the contrary, reliable and affordable power is a guarantee of both wealth and freedom.

Energy policy has been over-run by “green” ideologues who are determined to ensure that the poorest remain that way by wedding the world to the fiction that wind power provides a meaningful answer to growing energy demand, while “solving” the climate change “problem”. Tune in to Robert as he skewers that – and other – wind industry myths.

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Transcript of the 2014 Institute of Public Affairs HV McKay Lecture delivered by Robert Bryce

Good evening. My title for my remarks tonight is “More energy please: How increasing energy use promotes a richer, freer world”. I’m going to make five main points and I’m going to make them in about 45 minutes:

1. Scale (and I’m going to spend a fair amount of time talking about scale);

2. Electricity, wealth and freedom;

3. Coal;

4. The big fib;

5. Iteration means innovation.

So my first point, ‘scale’. And I’m going to start with a pop quiz. Hope you studied. Who here can name the country which, since 1985, has had the biggest percentage increase in CO2 emissions? Anyone? Go ahead shout it out.

It’s Thailand. Up 600% since 1985.

Another quiz: Who can name the country which, since 1985, has had the biggest percentage increase in electricity generation? Any guesses?

It’s Vietnam. Up nearly 2,500%.

Final part of the quiz. And you’re doing badly so far.

Which country, since 1985, has had the biggest percentage increase in coal consumption?

It’s Indonesia. Up nearly 6,000%.

Now, if you were to guess China or India or Chindia and you were to guess those numbers in absolute terms, you would probably be right, or close to right.

But why do I bring these three countries up at the beginning? Because they go to the heart of the points that I’m making this evening. Those three countries, Thailand, Vietnam and Indonesia, have a combined population of roughly 400 million people and they have an average per capita GDP of about $6,000.

That’s half of the average per capita GDP globally, which about $12,000, and it is less than 1/10th of the per capita GDP here in Australia which is roughly $67,000.

The residents of Thailand, Indonesia and Vietnam and other developing countries don’t need less energy, they need more. They need a lot more.

I want to drive home this point on scale because it goes to the heart of this entire discussion about what do we do today when we talk about CO2 emissions, climate change etc. while we have so many, not millions, not hundreds of millions but more than a billion people living without electricity.

1.2 billion people today on the planet living without access to electricity. And according to the World Bank another 2.8 billion people are relying on solid fuels and poor cook stoves in their homes for cooking and heating.
That’s 40% of the world’s population today living in energy poverty.

Over the past decade we have been inundated with media stories about the possibility of catastrophic climate change due to carbon dioxide emissions. I’m not here to argue that point one way or another. I’m a resolute agnostic when it comes to the issues of climate change and CO2.

Tell me CO2 is good, tell me CO2 is bad, tell me and do it slowly because I’m from Oklahoma…

Tell me what you’re going to do. Tell me, if you think CO2 is bad, what is your alternative to hydrocarbons? And therein lies the crux of the entire discussion. And you will never hear, and I do mean never, from Greenpeace, Sierra Club, Friends of the Earth etc. discussion about the scale of global energy use because they know to discuss it is a losing argument for them.

Over the last decade we’ve had climate change meetings in Copenhagen, Bonn, Durban, Cancun. There is another UN climate meeting scheduled for September 23rd in New York. China and India, by the way, have said they won’t be attending. Neither will the representatives from the German government.

The problem, fundamentally, when we talk about CO2, climate change etc. is the tyranny of big numbers. And Thailand, Vietnam and Indonesia are part of this tyranny of big numbers.

Over the past decade alone global energy consumption has increased by 28%. That percentage increase means 56 million barrels of oil equivalent increase in global energy consumption. That’s an increase of roughly seven Saudi Arabias of daily oil output.

Since the 1970s the Saudis have been producing about 8.3 million barrels of oil per day. Total global energy use today is roughly 256 million barrels of oil equivalent, that’s 1.5 exajoules. Now how many in the audience, and raise your hand honestly if you have an idea about what an exajoule is. There’s one out of roughly 300. I normalise my energy data around oil because the public has a better understanding of oil than they do any other form of energy. We hear all kinds of different energy terms: BTUs, quadrillion BTUs, joules, exajoules, therms, gallons, thousand cubic feet, tons of oil equivalent, gigajoules, kilowatt hours, megawatt hours, and the public understands none of them.

But many of them buy gasoline, or petrol as you call it here in Australia. And in terms of energy, what is the marker that we always hear on the nightly news or in the newspaper? We have the marker of the global price of oil, roughly $100 per barrel. The public understands that energy metric better than any other energy metric that I know of. So I normalise around oil.

So back to this issue of scale. 256 million barrels of oil equivalent per day is global energy consumption today from everything. Coal, oil, natural gas, nuclear, hydro, biomass, solar, wind etc.

And we get 87% – 222 million barrels of oil equivalent a day – from hydrocarbons: Coal, oil and natural gas. That’s 27 Saudi Arabias of energy per day from coal, oil and natural gas.

We get 10 Saudi Arabias in the form of oil, nine in the form of coal, seven from natural gas, two from hydro, one and half from nuclear and 0.7 Saudi Arabias from the political darlings of the moment: Solar, wind, biomass, geothermal. 0.7.

So we can stay here and we can have this discussion all night, all day, all decade about whether CO2 is good, or CO2 is bad, and what we should be doing about it. But the reality is, and the question that we do not grapple with, and that the green left never wants to discuss is ‘if you think CO2 is bad, tell us where you will get that 27 Saudi Arabias of carbon-free energy that you can deliver every day at a cost that consumers can afford?’

And instead of looking at the scale, instead of addressing head-on the math, the entire discussion has been ‘which side are you on?’ Which side are you on, are you a catastrophist or a denier? With denier smacking of somehow holocaust denial and stupidity.

Which side you are on has been the entire discussion instead of ‘if you think CO2 is bad, then what are you going to do about it?’

I read an article just a few hours ago by Bill McKibbon, the darling of the green left. He’s an American, the leader of 350.org, which has a fairly strong component here in Australia. And it was a long article published in the American press and all of it was how bad natural gas is and how we can’t use natural gas because it’s not a viable fuel, but not one suggestion in the entire article about what his suggestion is for the way forward.

I’m bored with the nastiness of the issue. I’m bored with the tribalism of the issue. The job that I have, largely what I do, is to bring these numbers forward and say ‘OK, we can talk about CO2, we can talk about solar, we can talk about wind. Let’s talk about the numbers, let’s talk about the scale.’

And by the way it is a theme, thank you John, for mentioning, in my new book Smaller, Faster Lighter, Denser, Cheaper: How Innovation Keeps Proving the Catastrophists Wrong. Yes, you knew this was coming.
Tell your friends, tell your neighbours, tell all your co-workers. You don’t have to read it, you just have to buy it. Hugh Morgan was saying that he annually throws out a hundred books that he buys but doesn’t read, Hugh you can have this one.

By the way I’ve written 5 books, collect them all, they make great gifts. If you buy it for your Kindle, I make a better royalty. Alright commercial is over now, you can relax.

So, CO2 and climate change have been the issue of the last decade. And yet what happened over the last decade? Global CO2 emissions increased by 29%. Why? Because of countries like Thailand, Vietnam, Indonesia, China, India, Malaysia, South Korea, the list goes on.

CO2 emissions in the Middle East in the last decade grew by 58%, in Asia up 74%, in Africa up 30%, in Europe down 4%, in the US down 6.5%, in Australia down 1%. The hard reality, and it is the reality, is that for countries all over the world the path to electrification, the path to wealth, depends on hydrocarbons, and that will remain true for decades to come.

My second point: Electricity, wealth and freedom.

The essentiality of electricity to modernity is incontrovertible. The countries that can produce cheap, abundant, reliable flows of electrons – the kind of electrons that we take for granted in the developed world – are the countries that can bring their people out of the dark. These are the countries that can create modern economies, create manufacturing sectors, create export economies. And the countries that can’t, can’t. Period, full stop, end of story, Elvis has left the building.

The story of the modern economy in the world today is the story of electrification. The International Energy Agency says, and I’m quoting here, ‘electricity is crucial to human development’. It says ’the availability of electricity is one of the most clear and undistorted indications of a country’s energy poverty status’.

We can see this again by looking at Indonesia, I mentioned it earlier. Indonesia, over the last three decades, has seen its coal use grow faster, on a percentage basis, than any other country. Between 1990 and 2010, 100 million Indonesians gained access to electricity, and coal provided more than half of that incremental growth in electricity availability.

Over that same 20 year period Indonesia’s per capita GDP rose by 442%, life expectancy increased by eight years, infant mortality fell by 45%, child malnutrition fell by 65%, illiteracy declined by 77%. This is not a coincidence.

And yet today, the average Indonesian uses around 630 kilowatt hours of electricity per year. The average American uses that much when they go camping. It’s a slight exaggeration. The average American uses that much electricity in roughly three weeks. The average Australian now uses roughly 9,600 kilowatt hours of electricity per year, that’s four times of the average resident of Thailand, eight times more than the average resident of Vietnam and 15 times more than the average resident of Indonesia.

Australia’s GDP is roughly $1.5 trillion. Indonesia’s, $828 billion. Indonesia has 247 million people, Australia, 23 million. You have 1/10th of the population of Indonesia and you have nearly twice the GDP of Indonesia. Now I know you’re all smart, good-looking and hard working, but it is no coincidence that electricity is cheap, abundant and reliable here in Australia.

Last year, Australia generated about 245 terawatt hours of electricity, Indonesia produced about 216. Electricity is, in fact, a reliable proxy for wealth and wealth creation.

I don’t use PowerPoint, it gives me a rash. If I were to show your one slide, I’d show you a slide from my fourth book, Power Hungry. The top 20 countries ranked by GDP and the top 20 ranked by electricity generation, and the correlation is almost 1 to 1.

Given the dire need for more electricity, it is no surprise that Indonesia is building more electricity generation capacity. And what are they using? It’s not solar, it’s not wind turbines, it’s coal. They’re planning at least 4 gigawatts of new coal fired capacity.

Let’s look at Pakistan, a country that has been torn by conflict for decades. Pakistan has 193 million people and yet it has less than 24 gigawatts of capacity. I live in Texas. Texas has 110 gigawatts ofelectric generation capacity with a population of 26 million. Texas has 1/7th of Pakistan’s population, and yet it has four times as much generation capacity. Texas’ GDP, roughly $1.4 trillion. Pakistan’s GDP, about $140 billion. Texas has 1/7th of Pakistan’s population and ten times its GDP. Little known fact, in 2009, Hillary Clinton, as Secretary of State of the United States, went to Pakistan, met with business people in Lahore, and what did she tell them to do? Build coal-fired power plants.

Let’s look at Africa. Africa is the dark continent, why? Because it’s dark. 1.1 billion Africans use about the same amount of electricity as 35 million Canadians. The GDP of Africa as a whole, roughly $2.3 trillion. Canada’s GDP about $1.8 trillion. Africa has 30 times the population of Canada, and yet Canada’s GDP is nearly as large as that of Africa.

Let’s move beyond electricity. Let’s look at what is happening in Ukraine. In April, Gazprom, the Russian gas monopoly, announced it was raising prices on the gas it delivers into Ukraine. The new price, nearly $11 per million BTU, roughly $11 per gigajoule. Per capita GDP of Ukraine is less than $4,000. In Panama it’s $9,500, in Poland it’s $13,000 and Russia, $14,000, and in the U.S., $52,000. Ukraine is one of the poorest members of the former Soviet Bloc and Putin and his band of kleptocrats in the Kremlin aim to keep the Ukrainians poor by making their energy expensive.

Meanwhile, Germany, inexplicably, has hitched its economic wagon to Vladimir Putin and Gazprom at the same time that they have implemented a renewable energy strategy that could well cripple its industrial economy. Europe needs more energy, more specifically, it needs more cheap energy if it wants to remain competitive. But instead it is largely doing the opposite.

Now let me move on to the point of freedom. And this point seems so obvious that it doesn’t need making, but what happened with Newcomen and Watt? What happened when they began creating the engines that we could then use to convert coal into useful power? To convert the heat energy in hydrocarbons into motion and that motion then into wealth producing activities?

That innovation that came with the first engines, the first viable engines that we continue to improve upon today, that ability to tap hydrocarbons freed humans from the vagaries of the sun and the wind and the rain.

For millennia, we humans were beasts of burden. What did we have to tap? We could tap the wind, we could tap the sun, and the biomass that grew. We could feed the grass and the oats to oxen and horses. Or we could do it ourselves. We had to take in the food to farm and to hunt. But by using hydrocarbons we freed ourselves from the back-breaking labour that came from simply trying to exist.

We humans today are prospering like never before. By any objective measure, today more people are living longer, freer and healthier lives than at any time in human history.

In 1950, about half of all the adults on the planet were literate, today it is roughly 90%. A century ago, few women were allowed to vote. Today, women in nearly every country, with Saudi Arabia and a few of the backward Islamic countries being the obvious exceptions, women are voting in every country and women are, in fact, in politics and leading in politics, and well they should.

In the 2012 Summer Olympics in London, for the first time, women competed on every team that was at the Olympics. Why has this happened? I think it is clear. It is the clear result of increasing energy and power availability. We have perfected the ability to turn energy into useful power, whether it’s lighting power, whether it’s communications power, motive power.

Our ability to tap hydrocarbons has been at the core of being able to create wealth and prosperity and that wealth and prosperity has led to more freedom. I can use this phone and in theory contact nearly any other person on the planet. That has never happened before.

With this phone or a computer with an internet connection any child in Africa can read The New York Times, or The Australian, or The Guardian. They can go on Khan Academy. My son, who is 14, uses the Khan Academy, it’s a free program, and he takes everything from elementary arithmetic to differential equations. For free.

The ability to spread knowledge, to share knowledge, has never been easier and it fundamentally is about our ability to turn energy into useful power and that is based on the hydrocarbon economy. I’m just getting all worked up here; I’m going to have to go all Joel Osteen on you. Save the applause till the end.

Okay let me move on to coal.

In the US, we are focused on the shale revolution and rightly so. Shale oil and shale gas has changed the fortune of the United States dramatically – adding roughly three percentage points to US GDP – roughly $500 billion in new economic activity to the United States – due to this improving technology of horizontal drilling and hydraulic fracturing. Remarkable development.

But the global energy story of today, in fact, the global energy story since 1973, is coal. In absolute terms, coal consumption has grown faster than oil and natural gas, and it continues to grow at a remarkable clip. Why? Because the world wants electricity.

No other energy form is as versatile or as powerful in terms of economic growth, and countries will use whatever fuel they have available that will allow them to get large quantities of electrons flowing. Last year alone, 2013, coal use globally grew by two million barrels of oil equivalent per day. That was 50% more than the growth in oil and nearly three times the growth in natural gas last year.

Further, and this is a fact – these aren’t my facts, these are verifiable facts that have been statistically reviewed, you can look at them yourself – last year, the growth in the coal market globally was equal to more than three times the contribution of all global solar.

I’m bullish on solar. The prices for solar are coming down rapidly. I live in Austin, Texas. I have 3,200 watts of solar panels on the roof of my house. Solar is going to grow rapidly, and for the record I am opposed to all energy subsidies unless I’m getting them.

Why do I have solar panels on the roof of my house? Because, what am I, stupid? I got the big fat subsidy from the city of Austin. My neighbours come by and ‘we love your solar panels’, I say ‘thank you, you paid for them’.

All global solar today – all global solar today including the 3,200 watts of solar on the roof of my house – the productivity from all of that is 600,000 barrels of oil equivalent per day.

Last year the coal market globally grew by two million barrels of oil equivalent per day.

This is a fact. This is the reality of the global energy story today.

I’m adamantly pro natural gas, I’m adamantly pro nuclear but the global story is coal and it has been for decades. Last December the IEA in Paris, the International Energy Agency, released a report which said coal demand knows only one direction – up. By 2018, The IEA is projecting that global coal use could exceed global oil consumption on a BTU or joule basis.

This is a remarkable projection. The last time coal consumption exceeded oil consumption in the US was 1949. Coal consumption is booming because electricity demand is booming. Coal demand is booming because the fuel is abundant, deposits are widely distributed geographically, supplies are not affected by any OPEC-like entity and, more than any other factor, it’s low cost.

The United States, I mentioned earlier, has dramatically reduced its CO2 emissions. Why? Because we’ve displaced large amounts of coal with natural gas. It was relatively easy for the United States to do that, with a very mature infrastructure both in terms of pipelines and in terms of existing gas wells. Hundreds of thousands of existing gas wells now in the United States.

It is not an option in Thailand. It is not an option in Indonesia, or Vietnam, or China, where there have only been roughly 200 shale wells drilled.

I recently completed a paper for Manhattan Institute that will be published next month, and I looked at the coal market, and I looked at the 20 year period between 1990 and 2010. In that 20 year period, about 1.7 billion people, according to the World Bank, gained access to electricity and of that number, by my calculations using estimates from Peabody and from another analyst, about 800 million people globally gained access to electricity due to coal. About 65 million gained access due to wind and solar.

Put another way, for every one person that gained access due to solar and wind in that 20 year period, four gained access due to hydro, six gained access due to natural gas and 13 – 13 – gained access due to coal.

So what are we going to do going forward? Coal is fuel that is easily demonised, and it is routinely demonised. The Sierra Club in the US has a ‘Beyond Coal’ campaign. The recently retired mayor of New York, Michael Bloomberg, gave the Sierra Club $50 million to fund their ‘Beyond Coal’ campaign.

Coal is in the crosshairs of environmental groups worldwide. But coal is a fact and coal is going to remain a fact in the global energy mix for decades to come.

So what is the logical way forward given the fact of coal?

I think it’s clear for bilateral lending institutions, multilateral lending institutions like the World Bank – we need to be encouraging the most advanced combustion technologies: Super-critical, ultra-super-critical and other technologies that bring more effective power out of the energy we feed into our power plants.

The punch line here is obvious, ladies and gentleman. We cannot rely on renewable energy to supply the vast quantities of electricity that are needed in the developed world, nor can we rely on renewable energy to bring the tens of millions, in fact, hundreds of millions of people today who are living in the dark.

We cannot rely on renewable energy to bring them out of the dark.

That takes me to the big fib.

And that big fib, my fourth point, is this repeated claim by environmental groups that renewable energy is enough. That we don’t need hydrocarbons. Greenpeace claims, and I’m quoting ‘renewable energy smartly used’, whatever that means – smartly used, it means Terry McCrann doesn’t get any energy – ‘smartly used can and will meet our demands. No oil spills, no climate change, no radiation danger, no nuclear waste’. Sierra Club in the US has a campaign, ‘Beyond Coal’, and another ‘Beyond Oil’ and another ‘Beyond Natural Gas’.

350.org has recently launched a campaign called ‘Fossil Free’. It’s aiming to convince colleges, universities and institutes that have pension funds – you call them superannuation here? Is that right? – to divest their portfolios of hydrocarbon entities and hydrocarbon equities.

350.org Australia is targeting Australian banks, particularly including ANZ, and trying to convince depositors to take their money out of those banks because those banks are lending money to hydrocarbon companies.

These green groups and leftist groups are welcome to push that agenda but the reality is that renewables cannot even keep pace with the growth in electricity demand, much less displace significant quantities of hydrocarbons.

Let me run you through the math. Electricity demand globally since 1985 has been growing by roughly 450 terawatt hours per year – 450 trillion watt hours per year.

Put it another away, since 1985 we’ve been adding roughly one Brazil per year of new electricity demand globally. And when you look at the projections from the International Energy Agency, Energy Information Administration in the U.S., Exxon Mobil, other forecasters, BP, they’re pretty uniform in their projections and they’re projecting roughly 450 – 500 terawatt hours of new electricity demand for the next 20 to 30 years.

Okay, so the incremental demand growth is roughly one Brazil per year, 450 terawatt hours. So if we want to turn to wind alone to meet this incremental demand – we didn’t use coal and we didn’t use any other of these nasty hydrocarbons – to meet that incremental demand what would it require in terms of wind?

Remember the metric is 450 terawatt hours. If we were to meet that demand growth with wind energy it would require us to cover a land area of roughly 240,000 square kilometres every year with nothing but wind turbines. Why is that?

Because of the power density of wind energy. Power density is a basic metric in physics – power density is a measure of energy flow that can be harnessed from a given area volume or mass, so we have aerial power density measured in watts per square metre, and the aerial power density of wind energy is 1 watt per square metre. You also have volume metric power density, gravimetric power density but I’m not going to discuss it.

Aerial power density is 1 watt per square metre, and I can show you in this book – and I have the facts – six different analyses that prove the point that with 1 watt per square metre, just to meet that incremental demand growth with wind energy would require 240,000 square kilometres – that’s a land area roughly the size of the United Kingdom – covered every year in nothing but wind turbines.

Put another way, in order merely to keep pace with the growth in global electricity use, the global wind industry would have to cover nearly 660 square kilometres – or 11 Manhattan islands – with wind turbines, it would have to do so every day.

Scale and solar. I told you I’m bullish on solar, I am. Solar is growing rapidly, and that is going to disrupt incumbent utilities in Australia, in Germany and the United States and it’s going to be a big issue. And it’s going to be a big issue for years to come.

But nevertheless, remember 450 terawatt hours is the target. How much solar would we have to install just to meet that incremental growth in electricity demand? With solar?

Let’s look at Germany. Germany has installed more solar capacity than any other country and now has about 36,000 megawatts – 36 gigawatts – of installed solar capacity. Last year all that solar capacity produced 30 terawatt hours of electricity.

The math is simple. Grade school simple. 450 divided by 30 is 15. Just to keep pace with the growth in global electricity demand with solar would require us to install 15 times as much PV capacity as now exists in Germany, and we would have to do so every year.

My fifth point, iteration means innovation.

To get better at something you have to do it a lot, and it doesn’t matter whether it’s swimming or a serve in tennis or a golf swing or making mobile phones, making engines, the more you do something – the more you iterate – the better you get at it. The better you innovate.

Why did the shale revolution happen in the United States? Well, I could tell you it couldn’t have happened anywhere else because, a brief aside, we have the rigs, the rednecks and the pipes and the rest of the world doesn’t. We’re drilling more wells in the United States than any other country. We’re drilling 40,000 wells a year in the United States. That’s far more than any other country in the world.

And with each well that’s drilled, the company that’s drilling it learns a little a bit. And they apply that learning to the next well, and the company that’s competing with them does the very same thing. The more you iterate the more you are able to innovate.

Shale is the most abundant form of sedimentary rock on the planet. The United States doesn’t have a monopoly on shale, not by a long shot. China, Argentina, Algeria, Canada, Mexico, Australia; huge shale resources in all of those countries. But, they are not iterating in terms of drilling into that shale. Therefore, they are not innovating, they are not getting the opportunity to learn how to do it better.

The rest of the world is a decade behind, or maybe two decades, maybe even three decades behind the US when it comes to tapping shale oil and shale gas. Why? Rigs, rednecks and pipes, but also mineral rights – another discussion that would take me a long time to go into, I won’t at the moment.

But the coal business. You look at the coal business – why has it been able to increase productivity? It’s a business that’s been doing the same thing for a very long time, and they’re figuring out how to make their processes better. How to do it faster and cheaper.

I’m adamantly pro-nuclear. Why aren’t we seeing more innovation in nuclear? We’re not building reactors. In the United States, this is a remarkable story, the Tennessee Valley Authority is a federally owned entity. In 1973 they began work on a reactor called the Watts bar no.2. In 1988, work on the project was stopped. Bechtel, the big construction firm, restarted work on the reactor in 2007 with a projected cost of $4.2 billion. The aim is to finish that reactor by the end of 2015. From start to finish, that will be 42 years on one reactor.

There are four other reactors underway in the United States at Plant Vogtle and Summer in the south-eastern US. So thus, in the next four or five years – and if we count Watts bar – in that timespan of four decades the US will complete five reactors. Over that same time period the US will drill, roughly, in that five year period, 200,000 gas wells.

Iteration means innovation.

The more we do something the better we get at it. And that’s why the oil and gas industry continues to do remarkable things – onshore, offshore. The first oil well drilled out of the sight of land was the Kermac no.16, it was drilled in 1947. It was drilled in 20ft of water.

Today, BP is working in the Great Australian Bite off South Australia. They are exploring in nearly 5,000 metres of water. Will they be able to produce oil and gas at that depth? We don’t know yet.

But already today, companies are routinely producing oil and gas in 3,000 metres of water. In 1947 that oil and gas might as well have been on the dark side of the moon. It did not exist because our technology did not allow that oil and gas to even have the prospect of being produced.

Now let me move on, I’m not going to spend much time talking about wind and biofuels. I’ve given you my opinion on wind – it’s one of the great scams of the modern age.

Biofuels, I feel the same way, except, more passionately.

I’m a long-time critic of the corn ethanol scam, and it is a scam. The fundamental problem with biofuels, besides the fact that their production means taking farm land out of food production, is their low power density. Power density of wind energy is roughly 1 watt per square metre, the power density of bio density is measured in fractions of a watt per square metre.

But set that aside, the fact that we are burning food – the fact that we are burning food – to make motor fuel is morally objectionable.

The biofuel boom is over.

Innovation in oil and gas, innovation in coal, innovation in hydrocarbons, we’re seeing innovation in solar, we’re seeing innovation in batteries. Going forward, where will we see this innovation, where do we need the innovation?

Well, if we’re serious about addressing the issue of carbon dioxide, we have to be serious about iteration in nuclear, and therein is a big challenge.

I am pro-nuclear, and I am pro-nuclear in the wake of Fukushima. In my view, if you are anti-carbon dioxide and you are anti-nuclear you are pro-blackout. I am adamantly anti-blackout.

My energy policy is very simple. I am in favour of cold beer and air-conditioning for everyone. But there are key problems with nuclear. We are not iterating, we are not building nearly enough reactors.

But second, the reactors are way too expensive. The cost is staggering for utilities around the world to build reactors unless they’re in China or in India or if they’re government sponsored utilities. It’s a bet the company can’t wager. But we have a multitude of promising designs: Molten salt reactors, modular reactors, thorium-fuelled reactors, integral fast reactors.

And we’re seeing new venture capital investment in the nuclear sector even in the wake of Fukushima, with companies like TerraPower, NewScale and Transatomic. We need more iteration in this sector because the power density of nuclear is unsurpassed. The power density inside the core of a nuclear reactor is measured in megawatts, in fact hundreds of megawatts per square metre.

That’s why nuclear is so attractive.

Small footprints are the environmental ideal. Nuclear energy is green, because it has a small footprint.

Now let me move onto solar and batteries. This is where the game is when it comes to renewables and the stakes are enormous. If solar panel prices can continue to be made cheaper and batteries get far cheaper and more reliable, then the deployment of electricity to energy poor countries will be accelerated, and that is incredibly positive prospect, particularly for southern Asia and Africa.

As I said I’m bullish on solar. I’m not bullish on energy subsidies, but nevertheless. Solar is being deployed and the growth in solar is remarkable. Bloomberg New Energy Finance recently projected that solar will be the fastest growing form of generation capacity through 2030. Bloomberg New Energy Finance expects some $2.5 trillion will be spent on renewables globally by 2030.

And the vast majority of that will be going to solar. Asia alone will add 800 gigawatts, they expect, of new solar PV. The cost of photovoltaic cells has gone from about $20 per watt in 1980 to less than $1 a watt today, and by 2017, First Solar, an American company, projects their cost to be about 40 cents.

This iteration in new solar installations is leading to more innovation. It’s leading to lower cost. So what about iteration, then, in batteries? We use batteries every day; we use them by the billions. But batteries are still too finicky; their energy density is too low. They don’t like it too hot, they don’t like too cold. They’re like Goldilocks, they have to have it just right.

We can store large amounts of coal easily, we can do the same with oil and we can do the same with relative ease with gas, but our ability to store electricity is laughably small.

Globally, we now consume roughly 22,000 terawatt hours of electricity per year. If we could somehow – a little thought experiment – if you could collect all the world’s car batteries, of roughly one billion automobiles on the planet, string them all together and charge them all up they could hold about 30 minutes worth of global electricity demand.

It’s not much.

But there are promising developments and there is a huge amount of capital going into the battery market. Not necessarily for batteries for your phones and electronics, but for grid storage. And this could be mean huge changes, again, for rural areas, for island economies in particular.

In my new book Smaller, Faster, I profile a company called Aquion. Aquion Energy, based in Pittsburgh, Pennsylvania in the US. They’re ignoring the transportation market. The founder of the company, Jay Whitacre, is a former rocket scientist, he’s never believed in electric cars, neither do I.

Electric cars are the next big thing, and they always will be.

Aquion is trading high energy density for low energy density. The energy density of the battery that Aquion is now deploying is roughly 1/8th of the energy density that is found in the Nissan Leaf, their new electric vehicle.
The global market for batteries is enormous, because the global market for electricity is enormous. Global electricity sales are worth at least $1.8 trillion per year. The US market alone is $370 billion per year.

So given the value of storing relatively small amounts of electricity, we can see a lot of iteration potential in the battery market. And again, this has tremendous potential for bringing people in rural areas out of the dark.

Aquion, when I asked them ‘what’s the business model?’, they said ‘we’re looking first at island economies’ and I said ‘why?’ and they said ‘simple, it’s where energy costs are the highest’.

In island economies, they don’t have coal-fired stations, generally speaking, they use diesel or fuel oil. So what’s their plan? To twin diesel generators with solar panels and batteries, and using those three different sources, they can hopefully bring the cost of electricity down. So let me conclude. Over the past few years we have been inundated by these ongoing claims that we are using too much energy, and in doing that we’re affecting the climate.

The fundamental problem with this is that it ignores the vast numbers of people who are living in dire energy poverty.
If we are interested in promoting wealth and freedom we should focus on providing more energy to more people everywhere.

This point was made just last month by the Indian economist Amartya Sen. In an essay published in The New Republic, Sen, who won the Nobel Prize in economics – he is Indian born, he’s now at Harvard – wrote ‘in thinking about expanding human freedom today, and sustaining it in the future, we have to take fuller note of the need for greater energy use for a large number of deprived people in the world.

The focus has to be shifted from a single-minded concentration on reducing emissions to a broader understanding of the range of needs of people, and the demands that come from expanding and sustaining their substantive freedoms to live reasonably good lives.’

That is it exactly. We have to move beyond this single-minded concentration on reducing emissions to one which recognises and honours the fact that energy availability is the key to human fulfilment and freedom. Thank you kindly.

Robert Bryce