Presented by Jonathan Ford and Neil Collins.
With Michael Shellenberger.
Produced and edited by Nick Hilton for Podot.
Hosted on Acast. See acast.com/privacy for more information.
Jonathan Ford 00:06
Hello, and welcome to a long time in finance with Jonathan Ford and Neil Collins, in partnership with briefcase dot news, the service that brings intelligent curation and analysis to your media monitoring.
What with the COP 27 Climate Conference, Just Stop Oil protesters glueing themselves to roads and bridges across the UK, and a continuing debate about how Europe weans itself off Russian fossil fuels, it’s hard to avoid the energy transition. So we thought we’d lean in and do something about it, in particular, the renewables industry. Now, what are renewables? Basically, we’re focusing on two main technologies: wind and solar. The idea is quite old in origin. The first person to suggest we could power a prosperous society entirely by wind was John Etzler, who proposed the idea in 1833. But it’s taken a while for technology to catch up with the polemics only in recent years has renewable energy formed a meaningful chunk of an electricity production in 2020, when it accounted for about 10% globally, according to BP statistical review of energy. Obviously, as a proportion of total energy, it’s considerably less than that maybe 3%. But getting there has cost developed countries a shedload of money. So Germany has spent around $500 billion on renewables over the last decade but perplexingly its carbon emissions remain well above the average in Europe. There are still those who argue that such investments are desirable partly because fossil fuel prices have surged in the wake of Russia’s Ukraine invasion. Ed Miliband, Labour’s energy spokesman in the UK, recently said that Britain could move to a 100% renewable nuclear grid by 2030, and cut prices. We’re delighted to be joined today to discuss all these issues by environmental and social campaigner, and all-round energy guru Michael Shellenberger founder of Environmental Progress. Welcome, Michael, very good to have you here.
Michael Shellenberger 02:09
Thanks for having me.
Jonathan Ford 02:10
I thought we’d start by talking a little bit about COP 27, which has multiple themes, but part of it’s getting countries to explain how they’re going to meet their targets to keep global temperatures from rising. So let’s talk a bit about renewables. How much can wind and solar and I guess hydro realistically do to help?
Michael Shellenberger 02:29
Sure. I mean, I think the short answer is very little, and certainly a lot less than people think. You know, to give you a sense of it, California, which is my home state is by far the biggest renewable energy deployer in the United States. It has about 20% of its electricity from solar. We have by far some of the best solar in the country because it’s so sunny. And in the year 2011, we received basically 101,000-gigawatt hours of zero-carbon electricity and about 93,000-gigawatt hours of carbon electricity. In 2021 10 years later, that amount of zero-carbon electricity had actually declined by 10% to around 90,000-gigawatt hours. Well, why was that? Well, that was during a period when solar went from close to zero to 20% of our electricity. So something had to offset it. It was two things. The first is that we shut down a single nuclear plant, and it was a drought year so we didn’t have very much hydroelectricity. I give you the example because I think when you unpack it, you see the problems with solar and wind in particular: they are not able to generate reliable electricity 24 hours a day, 365 days a year. Obviously, they can’t when the sun is not shining, and the wind is not blowing. And so we are in a situation in California we have to pay Arizona to take the excess solar electricity on sunny days when demand is low, and then we have to import large amounts of electricity on days when the sun is not shining and demand is high. Or as we saw in late August, we came close to having blackouts for the third year in a row because so many of the neighbouring states were also needing to import electricity to deal with the hot temperatures which made people use air conditioners more, and when the sun was setting in the evening is when demand is increasing. You know the weather-dependent nature of solar and wind are insurmountable obstacles. People say well, we can do batteries. Well, batteries if you were to back up the entire US electrical grid for four hours, it would cost three-quarters of a trillion dollars and that was before lithium prices increased sevenfold as they have. So what we see around the world is this trend of even as solar panels and wind turbines have become cheaper to manufacture and the electricity from them has become cheaper. Everywhere solar and wind are deployed at scale, they increase the price of electricity. So California’s electricity prices rose seven fold more than the rest of United States. Germany has the most expensive electricity in Europe, Denmark has the second most expensive and these are the two biggest renewable electricity countries. Now you might say, well, that’s okay. Because Germany and Denmark have clean electricity, low carbon electricity. In fact, you know, Germany produces six times more carbon per unit of electricity than France. And the reason is because Germany has been moving away from nuclear towards renewables and fossil fuels, while France is mostly nuclear. And the similar story when you compare Sweden to Denmark, and the same thing holds up with the cost. So France spends about 75% as much on its electricity as Germany does. Sweden spends half as much.
Neil Collins 05:52
Before we move away from California. You’ve talked about brownouts and blackouts, what is the general feeling of the population? Do they think that this is just part of the price of progress? Or is there any pushback at all?
Michael Shellenberger 06:08
Jonathan Ford 07:33
Yeah, it’s an interesting idea, that idea of a sort of secular religion. But of course, this kind of lost world in which people did indeed, as you say, depend on the wind and the sun for what energy they could scrape together was, of course, the world with a tiny fraction of the number of people in it that there are today.
Neil Collins 07:52
And pitiful life expectancy and no medicine, and starvation.
Jonathan Ford 07:59
Neil Collins 08:00
All these other excitements! Just the point you make about California’s last nuclear station, does the swing back towards nuclear extend as far as allowing the commission of another one?
Michael Shellenberger 08:15
Probably not, if you have a courageous politician – if you had a kind of elite consensus, it’s not inconceivable. You know, we do have a second nuclear plant site in Southern California, it was shut down in 2011. It should have been retrofitted. But it could get new reactors. When it comes to nuclear, the strongest support is to keep existing plants operating. You may have noticed that Greta Thunberg even said that the Germans should keep the nuclear plants operating. Yeah. And so I think then the second most popular is the retrofit of an older plant. And probably the third most popular is building new plants.
Jonathan Ford 08:52
Yeah. And you see, and you see very much the same thing in Europe, where obviously, there’s been huge pressure in places like Belgium and Germany, which both have programmes to essentially shut down their nuclear industry. And both are, of course, ruled rather, interestingly, by Green parties who have been at the forefront of trying to shut the whole nuclear industry down. And in both cases, they have at least I would say, partially accepted reality by retrieving some of their existing reactors. But in the case of Germany, they’ve been extremely reluctant to do that, even more than as a very temporary measure, and there’s absolutely no plan to build anything in the future.
Neil Collins 09:33
No, and also, Germany’s alternative is burning more brown coal, which is the worst possible fuel for co2 emissions. The central puzzle here is people’s determination not to see any of this when they’re advocating more renewables. They’re almost Messianic in terms of we must do without to oil and gas, and it’ll all be wonderful. As soon as you start looking at the numbers, it’s actually impossible.
Michael Shellenberger 10:08
It’s absolutely it’s a religion, I think it provides a substitute religion. It’s the idea that we need to make ourselves right by God, we need to make ourselves right by nature. This comes out of Heidegger, the great German philosopher, but also the Nazi philosopher of post-war era, he wrote an essay called the ‘question of technology’, where he says, you know, civilization should be dependent on weather-dependent energy sources. It’s a view of harmony, it’s a view of immortality, of sustainability. Even the word renewable is such a seductive word. And the idea is that fossil fuels are bad because they allow us to be separate from nature. This was Heidegger, by the way, too. And I think it’s a kind of displacement, you know, in the sense that obviously, climate change is not going to stop, even if you stopped all emissions. I mean, the world is getting warmer, we’re not going to get away from it. It’s really just a matter of how much climate change you have. And the biggest driver of reduced emissions in the United States and in Europe, is the transition from coal to natural gas. And yet these climate campaigners right now in Britain and elsewhere are saying no to gas, which is crazy.
Jonathan Ford 11:18
Yeah, I just want to jump in to say we’re not saying that all people who are in favour of renewables are Nazis. But I believe, but I think the analogy I would use it’s probably one of the great English divine who believed that we were all going to overpopulate the world and starve to death, Thomas Malthus, and there is definitely a trend in the whole history of the renewable movement of a feeling that basically liberal democracies’ attachment to economic growth is actually just destructive of the natural environment, and there’s something that somehow needs to be curbed. That idea in itself isn’t very persuasive, if you’re the average consumer on the street being told that you should make do with less. But if you’re told that it can be done in a kind of harmless way by erecting wind turbines, it seems much more palatable.
Michael Shellenberger 12:10
Yeah, no, I mean, I think the Malthusianism is that, you know, you would sort of say, if you have resource scarcity or climate change, you would say, well, let’s just do a lot of nuclear power. Or let’s just use a lot of natural gas to replace the coal but the Malthusians say, no, no, we can’t do those things. And they make up reasons why. So you get a sense that, well, what you’re really after is scarcity. You’re actually advocating scarcity. And that’s the similarity with Malthus, is that Malthus, when people objected to Malthus his basic argument by saying, ‘well, you can have family planning, so you don’t have as many kids or we can produce more food’, Malthus would say, oh, no, no, you can’t do those things. And he would just make up reasons.
Jonathan Ford 12:47
Having dealt, I think, with the kind of philosophical King, which drives this movement, perhaps we could talk a little bit about those reasons why, you know, one would argue that it has limits. And I suppose one, I think is a pretty strong argument is, is essentially, the argument about backup, because as you say, intermittency means something has to step in when these things aren’t producing. And at the moment, it pretty much is natural gas in Europe, and I’d guess quite a lot of that in the States. And some nuclear, can we ever get beyond that?
Michael Shellenberger 13:22
Well, you know, keep in mind that to some extent, there’s always going to be some need for storage in the sense that demand for electricity is not constant, you know, we just use a lot less electricity on the weekends, at night. And so you know, when we built nuclear plants in the 60s, we often built these pumps storage, which is the cheapest way to store large amounts of electricity is just pumping water uphill, when you don’t need it, and rolling it back over a turbine. When you do that, I think the basic principle of why electricity is such a cheap form of energy – the reason we make electricity so cheap is that you minimise the number of energy conversions, meaning you minimise the amount of needing to turn electricity into pumped storage or into chemicals in the form of batteries, and then re-discharge it. So you know, any energy conversion is going to cost you know, it’s going to be an energy penalty of somewhere between 10 and 20%. You’re just increasing the cost of electricity every time you have to turn the electricity into something else and put it back on. So you want to minimise that.
Neil Collins 14:22
It’s also the central weakness of the electric car.
Michael Shellenberger 14:25
Yeah. Which is in fact, the more rapid charging, we now know, degrades the batteries much more quickly. So you know, and then the other thing is that if you care about the environment, you don’t want a lot of storage for other reasons, meaning you don’t want a lot of hydroelectric dams. You don’t want to transform the natural environment that much you don’t want to do a lot of mining. The punchline would be no, there’s no way that we are going to move to a grid that is heavily reliant on lithium batteries. They’re just too expensive. They’re too environmentally degrading.
Neil Collins 14:56
Yeah, certainly from a UK perspective. the demonisation of the oil companies, and the oil and gas companies, is rather depressing to behold because they are actually responding by cutting back their exploration and production in the face of the pressure from the environmental groups. Are they going to cut it back sufficiently to restrict the supply of gas globally, assuming that in the end, that the Ukraine war ends, and that some sort of normality returns?
Michael Shellenberger 15:35
I totally agree with you, by the way, the demonization of the oil and gas industry is global, it’s a global phenomenon. I mean, it’s in South America, it’s in Africa. It’s absolutely bonkers. Natural gas is obviously a superior fuel to coal. Yes, there’s methane leakage. No, the methane leakage does not outweigh the reduction in carbon from coal to gas. Everybody knows gas is the best fossil fuel. Intuitively, even if you knew nothing about energy it’s the only one you want to burn in your kitchen. We have a huge scarcity of gas. And look, part of the reason is that we had this huge abundance of gas thanks to the fracking revolution, as well as offshore drilling, about a decade ago. But really, the investment in oil and gas declined by half over the last decade. Now part of that, it’s true, was due to the oversupply and the desire from oil and gas companies to make more money. But another part of it was due to the campaigning against the oil and gas companies ostensibly in the name of climate change. But not the real reason, in my view, because gas was reducing carbon emissions – was the main event in terms of reducing carbon emissions – I was disappointed to see that the new Prime Minister of Britain reversed the decision by the last Prime Minister, who was Prime Minister there for I guess, five minutes, who had said that she was going to frack. And the new Minister says, ‘no, we’re not going to frack for gas.’ This is crazy. I mean, Britain is having the worst energy crisis, perhaps in its history, certainly, since the early 70s. Maybe worse than that people are going to suffer from lack of heat, you’re going to lose your industries due to shortage of natural gas, you’re gonna get a lot more gas in the next three to five years in response to high demand and the building of liquefaction terminals. But I mean, I think you’re looking at a significant economic recession, significantly impacting all of Europe, certainly Britain, I think deindustrialization is inevitable in Europe. You get these governments now saying, oh, we have enough gas to make it through the winter. That means they have enough gas to keep people warm. It’s not enough gas to maintain the industries, and people need to understand that.
Jonathan Ford 17:36
Can we loop back for a second to the meetings that are taking place this week in Sharm el Sheikh? One of the things that they’re talking about is this question of making everyone stand behind their targets, obviously, that ranges from developed countries to those who’ve made what might be described as looser targets. But do you think those targets that the developed nations have made are indeed realistic?
Michael Shellenberger 18:03
Well, there’s no relationship between the targets that government sets and what they do in terms of emissions. There is a direct relationship between how much natural gas nuclear countries build and how much they reduce their emissions – to a much lesser extent how much solar and wind they build. So for me, I find these conferences dishonest in that they are premised on the idea that nations are going to decide their energy policy. Energy, which is fundamental, as we’ve been reminded, to national security. You know, if you are overly dependent on Russia, you can’t deter Russia from invading Ukraine. So what I object to about these climate conferences is the idea, first of all, that these things are going to be negotiated by a bunch of bureaucrats who are not accountable to the public or their industries in terms of the economics. I also object to the fact that the idea that you could discuss climate policy separately from economic policy or national security policy – that’s obviously wrong. These targets are just a kind of posturing. It’s a kind of public relations by governments they can make, they can say all sorts of outrageous things, crazy claims, and never have to achieve them.
Neil Collins 19:15
But I come back to the point I asked you earlier, and why do you think that this argument gets so little traction? Because it seems to me to be absolutely clear and obvious. The war in Ukraine has made it even more so. But the idea that somehow we can all get together and put down wonderful targets, probably not the bureaucrats, but the politicians – but the politicians of course know they won’t be in power at the time when these targets are supposed to be met. But why is it we are so taken in by all this?
Michael Shellenberger 19:50
Well, because it’s an apocalyptic religion, and the United Nations is the main church of that religion. Now the specifics of targets as you may know comes out of a different religious movement, but one also overseen by the United Nations, which was around nuclear weapons disarmament. You may remember, of course, you both remember, there was this fantasy that the countries with nuclear weapons were all going to get together and give them up. It feels like ancient history. But there was this idea that they would all get together and give up their weapons. And there would be these targets and timetables perfect for you and bureaucrats to oversee, as nuclear as a plausible apocalyptic threat went down in the late 80s, early 90s, climate change emerges to take its place as a new apocalyptic religion. There’s nothing different about the science, nothing changed in the science, it really emerges as a cultural force.
Jonathan Ford 20:47
Interesting stuff. I’ve gotta yank it back from the philosophical plane to a couple of practical questions. One, a very practical one about renewables, what proportion of a grid does it make sense, if any, to have as renewable energy? And the second, given your comments on nuclear power and gas – how many reactors do you think the United States will have ordered or commissioned by 2040?
Michael Shellenberger 21:14
There are questions of prediction. And then there’s issues of what do we want? Experts are famously as bad at prediction as non-experts, some experts are better than others. You know, right now, the United States has a little under 100 reactors, providing 20% of our electricity. I would like to see a goal of 50% of our electricity from nuclear by 2050. And so that would simply mean 250 nuclear reactors rather than 100.
Jonathan Ford 21:42
250 reactors by 2050. I think America is so high on cheap gas, that there is literally no incentive to build anything. What percentage of renewables would you say was the maximum, if any, you could stick on the grid?
Michael Shellenberger 21:59
You know, some colleagues of mine came up with a rule of thumb that I think is pretty interesting; which is that they can’t, you know, reach a percentage of the grid higher than their capacity factor. So if you kind of go solar and winds capacity factor is somewhere around 30%. Yeah, makes sense. You get to California, and solar is at around 20%. And we have big problems with it.
Jonathan Ford 22:22
When you talk about the capacity factor, that means the percentage of the time that a wind turbine or a solar panel can produce electricity at full power. And what you’re saying I think, is that 30% of the grid is the absolute maximum for renewables. That’s the maximum it can bear, at least in the US where you come from.
Michael Shellenberger 22:48
For me, solar panels are great in my backyard. They’re a wonderful niche technology. They’re hugely problematic when you scale them up beyond the niche. They take up so much land, people say, ‘well, you put them on your rooftop,’ okay, well, that’s twice as expensive as having them on land. There’s no solution to the waste byproduct. If they actually had to account for the waste, the electricity would be four times as expensive, according to the Harvard Business Review. And they’re being made by incarcerated Uighur Muslims in China, using the dirtiest coal in the world. And that’s simply untenable, you know, and I think there’s a reason why those costs came down, not because the solar panels became more efficient in converting sunlight to electricity, but because the Chinese made them using slave labour. Yeah, so that’s going to come to an end. And, you know, the Biden administration, you know, gave the Chinese two years and this, there’s nothing that’s going to change in those two years to make their product any better. So I think we’re nearing the end of the big renewables deployment that we saw over the last couple of decades.
Jonathan Ford 23:48
So it’s pretty rare, I think, for someone to actually out-sceptic Neil on this subject, the energy transition, and he’s gotten rather quiet over here.
Neil Collins 24:00
Yeah, well, I’m very impressed and sort of rather encouraged that somebody who really knows what they’re talking about, unlike me, has come to sort of similar sorts of conclusions. So I think we just have to keep fighting the fight against the all-consuming religion.
Jonathan Ford 24:20
That was a long time in finance with Jonathan Ford and Neil Collins, editing and production by Nick Hilton. And our sponsorship partner is briefcase dot news. Join us again next week.