Adults only announcement on energy

It is with great sadness that I have to make an announcement. The solar and wind energy dream is over.

It is my responsibility to make this announcement because nobody else can.

The last time I felt like this was when I had to fess up to my children that there is no Santa Claus – it was always just me and your mum. Those nasty kids at school who teased you for believing, I’m afraid, where right all along. “I’m really sorry honey for not telling you earlier, but I didn’t have the heart. You so wanted to believe it’s true.”

It’s the same with society’s love affair with solar and wind energy.

All the major energy corporations of the world have known this for a long time. But whenever they try to say it they just become the “nasty kids at school”. Saying hurtful things like: “Solar is the energy of the future – and always will be.”

All the politicians who have known this for some time can’t say it, because if they did you wouldn’t believe them and they would just be voted out of office. As the global financial crisis bites our politicians are trying to quietly creep away from all the grandiose solar promises they made.

The major institutional investment firms that underwrite the energy industry have known, but why should they tell, it’s none of their business. They just go on investing our pension funds in fossil fuels like they always have.

This doesn’t mean to say that we won’t see wind turbines or solar panels anymore, we will. Wind and solar is beautiful, clean energy and we should use as much as we can afford. But it’s time we realised it is not the panacea for the imperative problems facing civilization today.

Wind and solar will always be to energy what bicycles are to transport.

It all has to do with one word – capacity. Those mentioned above – and engineers everywhere – understand the importance of this word. But the rest of us in the egosphere are easily confused by it.

For example, I can ride my bicycle down a steep hill at probably 100 kilometres an hour (60 miles per hour). So the speed capacity of my bike is 100kmh. But that doesn’t mean that I can ride my bike 100 kilometres in one hour. In fact I don’t think I could ride 100 kilometres in a week.

A little motorbike, on the other hand, that has a top speed of 100kmh, has the same speed capacity as my bike. However, it could feasibly travel 100 kilometres in one hour.

My bike and a motorbike can have the same speed capacity – 100kmh – but very different “capacity ratios”.

Over any 100 kilometre stretch the capacity ratio of me on my bike – that is the percentage of the journey I could do at my speed capacity of 100kmh – would be about 1 to 2 percent provided there were some really steep downhills. Whereas the capacity ratio of the motorbike would be closer to 100 percent.

A 100kmh-capacity bicycle is not the equivalent of a 100kmh motorbike, and for the same reasons a 100 megawatt windfarm is not the same as a 100 megawatt gas turbine.

Bicycle technology keeps getting better. Today’s bicycles are significantly faster and lighter than bikes 20 years ago.  In fact, bike speed capacity has reached 220kmh (Eric Barone, downhill on snow, in 2000). But this doesn’t mean that it’s only a matter of time before bicycles will be competing in the motorcycle Grand Prix.

In the same way wind and solar technology is getting better and better, but, sadly, it will never be competing with fossil fuels.

Politicians have long been playing to delusions about energy promising to deliver a “clean energy future” based on renewable energy. Here in Australia we have one of the, if not the, most conducive environments for solar energy.

Politicians here have no problem getting the public, journalists and even academics to believe we are about to switch over to a “Solar Dawn” any day soon – a “Clean Energy Future”.

But in its current Draft Energy White Paper it gazes into a crystal ball to model what we could have in the year 2050. The best it could dream up for solar is 3 percent of our electricity by 2050. Three percent, and only if there are some technology breakthroughs.

I’m really sorry kids, but there you have it.

The competition in the motorcycle market is between names like Ducati, Honda, Suzuki and Yamaha. There will never be bicycles competing here.

Competing in the power generation market is coal, gas and nuclear. Right now there is no viable alternative. There will never be wind and solar in this league. There is some renewable energy making a marginal contribution, but this is almost entirely hydroelectricity and biomass, essentially wood-fired power generation.

Yes, there will have to be a new energy frontier sometime. But there is no way of predicting what that will be or when. In the meantime we have to work with what we’ve got. Wind and solar are not new energy sources for the future – they’re old energy sources. They have both been around longer than bicycles and we have tried so hard, particularly in the past 30 years, to make them work. But they just can’t do it.

Once again, it really saddens me to have to announce that this dream is over. And the ones I feel the most for are the Greens.

I know how much of their platform relies on, particularly, their solar energy vision, and I hate to have to tell them that the big corporations – those “nasty kids in the playground” – were right all along. There is no Santa and there is no solar energy future.

So why am I doing this? Why am I bursting their balloon?

Because I am a big admirer of the Greens and the environmental movement as a whole. I have been voting Greens for as long as Australian Governments have been throwing refugees into jail.

As far as I’m concerned, the Greens are the only party with a grown-up approach to the many social issues that are important to me. I want to see them adopt this same grown-up approach to energy.

We face some very serious energy challenges today and solar dreamers are poisoning the debates and preventing the discussions we really need to have.

The Greens have been a powerful political force in Germany since 1980. Germany has adopted one of the most aggressive attempts to make solar power generation work. It has spent billions over the years and yet today it only gets about 1 percent of its electricity from solar.

Greens have done a lot over the years to improve our environment and raise environmental awareness. Now we need them championing rational approaches to the huge problem of supplying the world’s growing need for real energy while, at the same time, reducing our emissions.

PM is right. We are being fed crap on climate change

The most effective way for me to reduce my domestic greenhouse gas emissions would be to kick my family out of the house and live alone. Then I could walk up and down the street waving my greatly reduced energy bills and proclaiming what a wonderful greenie I am.

It would be a fraud, of course, just like most of Australia’s attempts to tackle climate change.

Australia is shirking its responsibility in this global challenge because our policies are dominated be ignorant egotists who have deluded themselves into believing they are greenies.

We are not leading the world on climate change – far from it.

Ignorant, loud-mouthed, egotistical ‘greenies’ and deluded journalists and politicians are keeping this country splashing around in the kiddies paddling pool instead of assisting with the big issues in the deep end.

The climate change policies of both major parties are stuck in our domestic electorate. Climate change is a global problem. Australia is a minor energy consumer in this world, but we are a major energy producer and this is where our efforts should focus.

We are a major energy producer in the fastest growing region of the globe – Asia Pacific. There are hundreds of millions of people living in poverty across the Asia Pacific region.

I recently visited communities that have infant mortality rates that make even our worst Aboriginal communities seem like Shangri La. The reason is even remote Aboriginal communities have access to medical care when their children get really sick. In many communities in our region of the world there is no medical care, there is no Flying Doctor, no ambulance, no ‘intervention’. So parents regularly bury children, who die of routine illnesses like pneumonia, diarrhoea, or malaria.

But, the good news is things are improving. Countries are working hard to raise their living standards to levels we take for granted. The bad news is achieving this requires capital and energy – lots of it. As a result Asia’s energy demand is growing at roughly the equivalent of a new ‘Australia’ joining the region every 18 months.

Naturally these countries are going for the most affordable energy and that is coal. Australia, being the world’s largest coal exporter, is therefore doing OK out of all this humanitarian endeavour. It helped us dodge the GFC.

When I hear the Australian Government pledge to reducing our domestic greenhouse emissions by five per cent, I say ‘so what.’

We are going to increase the amount of renewable energy in our power generation to 20 per cent – big deal. We might as well pour money into Morris Dancing – at least it would create more jobs.

If we really believed that climate change was serious, if we really believed that it required urgent action, we would stop wasting money on mirrors and propellers and instead concentrate on trying to improve coal-fired power generation.

If we could develop a one percent improvement in the world’s future coal-fired power generation this would dwarf anything Australia did in our puny domestic market. Yet the Gillard Government’s latest climate-change policy had nothing in this area.

And when a company in Victoria, HRL, embarked on an ambitious project to build a pilot-plant to attempt to prove technology with the potential to reduce emissions from coal-fired power by 30 per cent, so-called “environmentalists” turned on them like rabid dogs. Where were our politicians or journalists who could have put this outrageous attack into perspective?

If this project has been killed, then it is not beyond credibility to say that those responsible have dealt a severe blow to the world’s efforts to combat climate change. They clearly believe that their own egotistical agenda is more important than truly tackling climate change. They have no awareness of the real challenge and are quite content to just ‘kick their family out of the house’.

Climate change exposes a fundamental flaw in our democratic system – policies are formed by egotists. However, tackling climate change requires technically sophisticated collaborators – engineers.

They are essentially excluded from the debate.

This is a multi-faceted, complex, technical problem -- we won’t get the answers from focus groups.

The Solar Energy Mirage

I have a torch at home that doesn’t need batteries yet never runs out of electricity. It is made from durable plastics and inside has a copper coil with a loose magnet that slides back and forward through the coil when you shake the torch.

It transforms the chemical energy stored in my muscles (and fat) into electrical energy that allows me to see in the dark. How amazing is that?

But this wonderful, perpetual, renewable energy source is not the answer to all my energy problems. It has not led me to unplug my house from the power grid, tear up my electricity bills and throw my car keys over the fence.

The solar energy industry is in the same position as my torch. It’s also an amazing, wonderful source of energy when it is used in the right situations, such as locations far from conventional electricity infrastructure, like in the outback, or powering the remote-control systems on gas platforms out in the South China Sea. But it is not the answer to the world’s energy problems and it won’t be in my lifetime and probably the lifetime of anyone reading this article.

Solar’s problem is the economics don’t add up. For example, we all dream of having cars that run on solar power. Yet if I produced such a car today, I would find it hard to sell. It would be ideal as a summer beach patrol vehicle, but it would never cut it as the family sedan. We need our cars day and night, rain, hail or shine and very few people can afford the capital expense of a second car just to use on sunny days.

These are the same problems with solar power generators – they are expensive and unreliable.

That’s why almost all the solar energy in our urban areas is there because it’s on the dole – whether that's in Australia, Germany or California. It’s paid for by taxpayers’ money, because our politicians are forced to pander to the misconceptions of the community. The community wants solar energy to be the answer to all our energy needs, so our politicians are very keen to give it to them. That’s why there is so much fuss about Environment Minister Peter Garrett’s axing of the solar rebate.

Meanwhile the real energy problems are mounting up – and they are formidable problems.

There are three fundamental principles that govern the energy industry – how much, how much and timing. How much energy can you deliver? How much will it cost? When can you deliver it? Scale, cost and timing.

These crucial principles are ignored by many who speak out on energy issues and as a result the general public has naive, impossible expectations based on a grossly distorted picture of the energy market.

Timing is important to understand because the energy industry runs on very different time-lines to the political election cycles that have such an influence on our policy decisions.

Our whole way of life, our quality of life, is determined by our access to energy. Wow betide the Government if our daily energy supply is curtailed in anyway, or if the cost of that energy goes up dramatically. We saw an example of this with the spike in petrol costs last year and the power outages in the Victorian heatwave.

But the energy we rely on today – to keep our milk and chops cold, to run our lights, air conditioners and tellies, and to get to and from work and pick up the kids – is the result of major capital investments in energy infrastructure five, 10, 20, even 30 years ago. If our energy system fails, chances are that's not down to the current Energy Minister, Martin Fergurson, it's more likely to be thanks to his predecessor or his predecessor's predecessors. In the same way our children and even our grandchildren will be relying on the energy investments we make today, under the current Rudd Government.

The problem is that in the current economic climate investment capital is very hard to come by. On top of all this, according to the Government's ABARE forecasts, our future generations are going to rely on a lot more energy than we are currently using, just as we today are using a lot more than our parents' did.

Which brings me to the scale of the problem.

Twenty years ago Australians consumed about 4000 petajoules (4000PJ) of energy per annum. Bearing in mind that one PJ is the energy equivalent of about 29 million litres of petrol. Today we demand about 6000PJ. According to Australian Bureau of Agriculture and Resource Economics (ABARE), if we become far more fuel efficient and implement our fuel conservation measures, we will require a bit more than 8000PJ in 20 years time.

So how much does solar contribute? Of the 6000PJ we consume today, solar energy contributes about 3PJ. I’ll write that again in case you think it’s a misprint. Solar contributes about 3PJ. This is almost entirely made up of the energy produced by all the solar hot-water heaters across the nation.

According to ABARE’s forecasts that figure is going to grow rapidly over the next 20 years to 4PJ. Meanwhile our annual demand will increase by 2000PJ over the same time.

The fact is the greatest responsibility for meeting our energy needs while at the same time cutting our greenhouse gas emissions falls heavily on the shoulders of the scientists, engineers, technicians and operators in the fossil fuel industry, who provide about 95 per cent of our energy. Without them we haven’t got a chance.

Slandering these dedicated individuals as “big polluters” or part of the “Carbon Mafia”, and comparing their organisations to tobacco companies just makes the task of recruiting the crucial next generation of young minds to this mammoth task so much harder.

Climate Change versus Poverty Alleviation

The world is playing tug-of-war with itself at the moment. At one end of the rope is the climate change industry, at the other end is world poverty. The arena is the world’s media and the winner is the cause that can attract the most media attention.

So far the climate change industry is winning hands down. It has proven to be spectacularly successful at playing the media game.

It’s so successful in fact it has even seduced some of the world’s leading anti-poverty campaigners, such as Oxfam, World Vision and Unicef, to come over and pull for its side.

In its Policy Position on Climate Change, World Vision Australia declares that it is prepared to refuse funds for the world’s poor in the interests of supporting its climate change policy. It states that it “will decline offers of funds, goods-in-kind, or services-in-kind from companies” that it believes do not support its position on climate change.

Frankly I find this deeply disturbing. It is an alarming sign of today’s omnipotent media.

As the UN IPCC makes clear, climate change is a very real problem. But it's not the only real problem. That fact that it is so pervasive in today’s news is a credit to its spin doctors.

There is no question that our daily news industry is of vital importance to a healthy democracy, but it is not the font of knowledge that some believe it to be. News organizations are in the business of selling stories. As Evelyn Waugh put it in Scoop, it's only news until it's read – "after that it's dead”. So good spinners know that the same message has to be constantly renewed – "more urgent", "more dire" – in order to make it into the papers.

The most important news doesn’t always make it into the daily media – the best stories do.

Tomorrow there will be a catastrophic international incident that will kill more than 20,000 children. The reason they will die is because the doctors and the ambulances will be too late in getting to them. But that's not news, because it also happened yesterday, and again today – in fact it happens every day, including Christmas and holidays.

Not one of these children will be killed by climate change. Their biggest cause of death is pneumonia, followed by other easily treatable conditions including diarrhea, malaria and malnutrition.

Ending world poverty is urgent – tackling climate change is important, but not urgent.

The good news is that progress is being made. According to UN Millennium Development Goal 2007 Report, the proportion of people living in extreme poverty in the world fell from nearly a third to less than one fifth between 1990 and 2004. As a result the Millennium Goal of halving the number of people living in extreme poverty by 2015 is likely to be met.

Unfortunately this progress is almost entirely due to the rapid economic expansion in Asia, most obviously China. China is eradicating its poverty and raising living standards the same way we did in the West, by burning fossil fuels. As a result its CO2 emissions are projected to be greater than those of Europe and the US combined in the next quarter of a century. China is big enough and powerful enough to politely tell Western climate change lobbyists to get stuffed. Yes, it recognizes that reducing emissions is important, but it has made it clear that economic growth comes first.

Low-cost, high-yield energy brought us the industrial revolution. This did not just give us what we have today in our modern world, it formed who we are.

As neuroscientist Professor Susan Greenfield points out in The Quest for Identity in the 21st Century, it changed us from "a cog in the machine of a feudal society" into the free-thinking individuals we are today. It made each of us "Someone". When manual labor became more mechanized, we got more leisure time to just think. At the same time the new manufacturing age was "desperate to draw on diverse types of individual talents". This, of course, sparked the need for education and innovation and before you know it, here we are.

Well now it's time for the Third World.

But this won’t happen without the low-cost, high-yield fossil fuel energy we rely on. Yet some in the climate change industry say developing countries should instead be encouraged to adopt high-cost, low-yield renewable energy. Make no mistake about it, to push this line is to pull the rope away from poverty alleviation.

The industrial revolution unlocked our brain power. Education of the masses delivered brilliant scientists, doctors and engineers who rapidly improved our technology and standard of living. But most of our human brain power is still locked away in the Third World struggling just to survive. 

Climate change is a global issue and a personal one. It's not a national issue – it can't be solved by politicians or corporations. It's up to us. We the consumers are the big polluters.

The only effective way to unite the world behind this cause is to adopt a long-term global per-capita target.

Then we work hard to get ourselves down to that target, but more importantly, we work hard to get everyone in the developing world up to that target.

One of the most significant factors driving global emissions growth is population growth. History has proven that as living standards increase birth rates decline.

The major global issues plaguing the world today – climate change, terrorism and poverty – are all linked.

Who knows, the person capable of providing a vital clue to our search for low-cost, high-yield sustainable energy technology could be toiling away today in some field in Africa.

Our challenge is to get her through school and into a university urgently.  

A Clash of Two Ministers

The Federal Government’s green paper on emission trading highlights the dichotomies that plague many of our public policy decisions. It’s the differences between facts and beliefs, between those who promise and those who have to deliver, perceptions and reality, leadership and politics, what we would like to achieve and what we can achieve.
Australia faces two major challenges that are certainly not complementary. One is how are we going to attract the massive long-term investments we will need, particularly in the energy industry, to maintain our economy in face of rapidly growing international competition? The other is how are we going to reduce our carbon footprint?
The green paper shows that, for the time being at least, the Rudd Government wants to remain in “Opposition” mode and keep these issues away from each other.
While Energy Minister Martin Ferguson's report, Energy in Australia 2008, outlines the energy challenge and pays little attention to the emissions challenge, Climate Change Minister Penny Wong’s paper deals with the emissions by dancing around the energy challenge.
The language of the green paper reeks of the tired old assumptions that we will have to jettison if we are going to make any attempt to seriously tackle global climate change.
Number one is this concept that society is divided between big (bad) corporations on the one hand and the community, the battlers, working families on the other.
The green paper encourages the deluded view that significant emissions cuts can be achieved without major costs to the community. It’s a dream where our way of life will be saved by propellers and mirrors and petrol we can practically grow in our gardens. Emissions trading will force the “big polluters” – the carbon mafia, the bastards in the boardrooms – to switch over to the alternative, clean energy sources that up until now they have been conspiring to suppress.
In reality is there is no conspiracy. As Fergusons’s report makes clear, there are no quick-fix clean energy alternatives to switch to.
Furthermore we do not live in a divided society. We are all in this together.
You see, maintaining our standard of living requires major long-term investments. Business leaders make their investment decisions in the interests of their shareholders. To a rapidly increasing extent, those shareholders are "working families". Workers' super funds account for almost a quarter of the wealth on the Australian stock market. But these funds are not restricted to Australia. We have about $450 billion in funds under management invested here and around the world.
When business leaders make their investment decisions, it is helpful to remember they are investing to maximise our retirement income. Major corporations invest for long-term sustainable returns, rather than trying to make a quick buck.
This green paper seems to miss this point entirely. It is a document built around election-cycle timelines rather than investment outlooks. It has short-term provisions to assist some companies that have already made investments in energy and manufacturing, but it has very little to encourage the new, long-term capital investments we are going to rely on for our future economic growth.
The energy we are using today is provided as a result of major capital investments five, 10, even 20 years ago.
According to Ferguson's report we are going to need almost 40 per cent more energy than we currently use by 2030, despite dramatic improvements in efficiency, and fossil fuels are projected to account “for around 94 per cent of primary energy consumption in 2029-30".
Meeting this demand is going to require billions of dollars in investments in fossil fuels starting from now. There is no recognition of this in the green paper.
The green paper makes several references to the need for investments in "clean energy". But it does not say what this clean energy is. It comes close on page 72 where it says: "Carbon capture and storage, solar and geothermal technologies have been identified as strategic priorities for Australia." But none of these even rate a mention in Ferguson’s forecast to 2030.
The fact is that right now "alternative" energies are about as prepared to take over the role of fossil fuels as alternative medicines are to take over the emergency rooms in our major hospitals.
You see, when it comes to understanding the energy industry you really only need to know two things – how much, and how much? How much can you reliably provide, and how much will it cost?
With so-called clean energy alternatives the answer to the former is inevitably "very little" and the answer to the latter is "heaps".
For example, the fastest growing alternative source of power generation is wind. Yet, providing the energy needs of our aluminum industry alone would require a one kilometer-wide windfarm stretching from Melbourne to Brisbane.
It’s all about scale and cost. Minister Ferguson's report says our electricity demand will increase by more than 60 percent by 2030. Wind, it says, will be providing just 1.3 per cent of electricity 20 years from now. Coal, on the other hand will have to provide 70 per cent. In the absence of carbon capture and storage in that timeframe this is going to dramatically increase our carbon dioxide emissions from energy.
It will be interesting to see Ferguson and Wong united when the Government finally releases its projections for emissions. Projections have to be based on facts, whereas targets can be whatever you want them to be. That fact is the politicians setting the targets won’t be around to answer for the fact they will not be achieved.
So the question for us is, should business leaders be investing our super funds to get the best return, or should they forgo our profits and invest in Australia for the good of the nation? Those in favor of investing for the best returns say aye, those against nay – I think the ayes have it.

Leonard McDonnell is a freelance journalist and speech writer. His clients include major oil companies.