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It’s About China, Stupid

by Richard T. Stuebi

In the energy sector, it’s becoming increasingly clear that the name of the game — whatever game you wanna talk about — is China.

My favorite recent contribution to this strain of literature was a blog entry from late August written by the Center for Geoeconomic Studies at the Council on Foreign Relations
called “China Will Force the World Off Oil”. Here’s the eye-popping core of this short post:

“As a country’s per capita income increases, its per capita oil consumption increases. Consumption growth tends to be modest up until $15,000 income per head, but then accelerates rapidly. China is quickly approaching this point…Were China’s per capita oil consumption be brought up to South Korea’s, its share of global consumption would increase from today’s 10% to over 70%. In order to cap China’s share at 22%, which is the U.S. share today, global oil output would have to increase by a massive 13% per annum over ten years — well beyond the 1% growth averaged since 1975. This rate of growth is inconceivable, even if vastly more expensive sources of supply…were developed at breakneck speed.”

And, of course, this is why China is leading the pack on advanced energy technologies of all sorts to move off of oil and other fossil fuels. Take batteries, for instance: as Thomas Friedman noted in his late September New York Times editorial “Their Moon Shot and Ours”, China will be “providing $15 billion in seed money for the country’s leading auto and battery companies to create an electric car industry.”

Note the choice of words: Beijing is not aiming to merely build companies, but to create entire industries. (Of course, that’s easier said than done, and top-down command-and-control economic dictates don’t necessarily produce success.)

And, note the magnitude of dollars: $15 billion of them, just for electric vehicles (not to mention investments in solar energy, wind energy, etc.). In contrast, according to some comments made at the Cleantech Forum in New York earlier this month by Dr. Arun Majumdar, Director of ARPA-E, the U.S. spends more each year on potato chips than it does on energy sector R&D.

Here in the U.S., we don’t have a lot of disposable dollars either in public or private coffers, and we aren’t inclined to allocate a large share of the little we have to our energy challenges. China has lots of bucks — primarily from U.S. purchases of consumer products — and is flowing a large portion of them to energy technologies. The Chinese can see, as apparently we Americans can’t, that the current energy paradigm isn’t sustainable — even if we loved it and didn’t want it to change. Even though status quo isn’t an option, we Americans seem to think our current system of energy supplies, technologies and economics is a destiny or a right that must be defended.

Why, then, do we need to ask what ABC World News did a few months ago with their story “Clean Energy: Why Is China Ahead of the U.S.?” Why, then, is anyone surprised when they learn about examples such as New Jersey-based solar company Natcore Technology being lured by sizable financial inducements to set up operations in China?

If you want to be at the tip of the spear in advanced energy over the coming decades, you will need a major presence in China. It’s really that simple.

Richard T. Stuebi is a founding principal of NorTech Energy Enterprise, the advanced energy initiative at NorTech, where he is on loan from The Cleveland Foundation as its Fellow of Energy and Environmental Advancement. He is also a Managing Director in charge of cleantech investment activities at Early Stage Partners, a Cleveland-based venture capital firm.

Real Security after 9/11

Op-Ed by John Addison (9/11/08). My ninth trip to teach a workshop at Two World Trade Center never happened because of the great tragedy 9/11. For years Sun Microsystems, my former employer, had invited me to conduct a series of workshops about technology and strategy. Much of the Wall Street ran on Sun servers, Java applications, and Sun network technology. Reliability, performance, and the ability to recover from disaster were reasons that New York continued to run after the disaster. Sun’s tagline was reality – “The Network is the Computer.”

On September 11, 2001, thanks to heroes like Avel Villanueva the hundreds of people working for Sun Microsystems in Two World Trade Center all quickly evacuated the building and survived. When Avel saw the damage and fire at One World Trade Center, he paged everyone at Sun to leave Two World Trade Center as quickly, “Please, with calmness, go to the nearest exit. This is not a drill. Get out.” He repeated this from the reception area several times. Only after several pages and inspecting the vast 25th and 26th floors did Avel personally leave. Three minutes later the second plane hit Two World Trade Center.

Although it must have been difficult to continue working after such a tragedy, the people at Sun understood that New York depended on their ability to keep working. Within 24 hours almost all Sun employees were doing their jobs at other Sun locations, homes, even nearby cafes. Sun effectively used its own networking technology with an iWork program that enables employees to work at home, at an office near their home, or be highly productive anywhere with a mobile device and wireless network connection.

Flexwork is one way that we are now more secure. The vital work of millions can continue even if a building cannot be accessed or part of a city is closed. Wireless and Web 2 enable collaboration, communication, and knowledge work to continue anytime and anywhere. People are most effective working some days at one location, other times at home, others at a customer or supplier location. We can take advantage of the new flexible workplace solutions to annually save millions of wasted hours and billions of dollars of fuel. Flexible Work Article

Every time that we go through an airport, we are aware that important steps have been created to make U.S. entry and travel more secure. Yes, despite the hassle and loss of some privacy, Homeland Security has been valuable in keeping terrorism at bay.

As our current president reminds us, “We are addicted to oil.” As we continue to spend billions for oil for countries hostile to our way of life, we continue in the words of Thomas Friedman to “finance both sides of the war on terror.” In his new book, Hot, Flat, and Crowded, the Pulitzer Prize winning author shows us how to be free of this addiction.

Americans are not waiting ten years to replace a fraction of our foreign oil with new oil from Alaska. Americans are reducing our oil use now. Confronted with high prices at the pump, U.S. citizens drove 12 billion fewer miles in one month. People are taking advantage of flexwork, public transit, car pooling, sharing rides and sharing vehicles. Two car households are buying fuel efficient cars and increasingly keeping their gas guzzlers parked. 40,000 Americans now drive electric vehicles that do not use a drop of oil. In ten years, we will be driving millions of electric vehicles. EV Reports

Twenty-three percent of our increased supply of electricity in 2007 was from renewable energy. We have enough wind to power the nation including transportation. We have enough solar. Scientific American Article Yes, it will take time, money, high-voltage lines to major markets, and added jobs. Green is producing green. While many areas of our economy are currently suffering, renewable energy and energy efficiency are growing rapidly creating jobs and corporate profits. Global Trends in Sustainable Energy Investment 2008

Real security requires more than airport checks, less foreign oil, and cleaner transportation. Real security starts with the commitment to give our children a better world. Future generations deserve nourishing food, clean water, and protection from disease. Global warming has now put over one billion at risk of not getting enough water and food. Glaciers are disappearing. Water systems are stressed as oceans rise and water tables deplete. Hurricanes attack our coastal cities with increased intensity. Draughts weaken our ability to grow food at affordable prices.

Yes, there are those in Congress who are chanting “drill, drill, drill,” but we cannot end our addiction to oil with more oil. Elected to represent their people, not special interests, these legislators threaten to stop funding renewable energy unless Big Oil can drill anywhere it pleases. Others want to undermine states rights, removing their ability to regulate greenhouse gas emissions within their state.

Fortunately there are wise leaders in both parties committed to put a limit on our greenhouse gas emissions, encourage conservation, put us on a path to a sustainable future that is more secure for our children.

In Mr. Friedman’s new book he recalls a Chinese proverb, “When the wind changes direction, there are those who build walls and those who build windmills.” America can renew its world leadership with innovative solutions to an emerging climate crisis. We can lead in wind power, solar, geothermal, building efficiency, materials that are lighter and stronger, zero emission cars and zero emission cities. From information technology to clean technology, from flexwork to sustainable communities, let’s build windmills not walls.

We can be inspired by heroes like Avel Villanueva who got everyone to safety. We can also celebrate the millions of ordinary heroes who are building a more secure future for our children by living a more sustainable life today.

Copyright 2008 © John Addison. Permission to reproduce on the web with preservation of this notice. Portions of this article will be included in John Addison’s upcoming book.