A 40year plan for energy Amory Lovins

[Music]

[Applause]

America’s public energy conversation

boils down to this question would you

rather die of a oil Wars or be climate

change or see nuclear holocaust or D all

of the above oh I missed one or e none

of the above that’s the one we’re not

normally offered what if we could make

energy do our work without working our

undoing

could we have fuel without fear could we

reinvent fire you see fire made us human

fossil fuels made us modern but now we

need a new fire that makes us safe

secure healthy and durable let’s see how

four-fifths of the world’s energy still

comes from burning each year four cubic

miles of the rotted remains of primeval

swamp goo those fossil fuels have built

our civilization they’ve created our

wealth they’ve enriched the lives of

billions but they also have rising costs

to our security economy health and

environment that are starting to erode

if not outweigh their benefits so we

need a new fire and switching from the

old fire to the new fire means changing

two big stories about oil and

electricity each of which puts two

fifths of the fossil carbon in the air

but they’re really quite distinct less

than 1% of our electricity is made from

oil although almost half is made from

coal their uses are quite concentrated

three-fourths of our oil fuels

transportation three-fourths of our

electricity powers buildings and the

rest of both runs factories so very

efficient vehicles buildings and

factories save oil and cold and also

natural gas that can displace both of

them but today’s energy system is not

just inefficient it is also in

disconnected aging dirty and insecure so

it needs refurbishment by 2050 though it

could become efficient connected

and distributed with elegantly frugal

autos factories and buildings all

relying on a modern secure and resilient

electricity system we can eliminate our

addiction to oil and coal by 2050 and

use one-third less natural gas while

switching to efficient use and renewable

supply this could cost by 2050 five

trillion dollars less in net present

value that is expressed as a lump sum

today then business as usual assuming

that carbon emissions and all other

hidden or external costs are worth zero

a conservatively low estimate yet this

cheaper energy system could support a

hundred fifty eight percent bigger u.s.

economy all without needing oil or coal

or for that matter nuclear energy

moreover this transition needs no new

inventions and no acts of Congress and

no new federal taxes mandate subsidies

or laws and running Washington gridlock

let me say that again I’m going to tell

you how to get the United States

completely off oil and coal five

trillion dollars cheaper with no act of

Congress led by business for profit in

other words we’re going to use our most

effective institutions private

enterprise Co evolving with civil

society and sped by military innovation

to go around our least effective

institutions and whether you care most

about profits and jobs and competitive

advantage or national security or

environmental stewardship and climate

protection and Public Health reinventing

fire makes sense and makes money General

Eisenhower reputedly said that enlarging

the boundaries of a tough problem makes

it soluble by encompassing more options

and more synergies so in reinventing

fire we integrated all four sectors that

use energy transportation buildings

industry and electricity and we

integrated four kinds of innovation not

just technology and policy but also

design and

business strategy those combinations

yield very much more than the sum of the

parts especially in creating deeply

disruptive business opportunities oil

costs our economy two billion dollars a

day plus another four billion dollars a

day in hidden economic and military

costs raising its total cost to over a

sixth of GDP our mobility fuel goes

three fifths to automobiles so let’s

start by making autos oil free

two-thirds of the energy it takes to

move a typical car is caused by its

weight and every unit of energy you save

at the wheels by taking out weight or

drag saves seven units at the tank is

you don’t have to waste six units

getting the energy to the wheels

unfortunately over the past quarter

century epidemic obesity has made our

two-ton steel cars gain weight twice as

fast as we have but today ultra light

ultra strong materials like carbon fiber

composites can make dramatic weight

savings snowball and can make cars

simpler and cheaper to build lighter and

more slippery autos need less force to

move them so their engines get smaller

indeed that sort of vehicle Fitness then

makes electric propulsion affordable

because the batteries or fuel cells also

get smaller and lighter and cheaper so

sticker prices will ultimately fall to

about the same as today while the

driving cost even from the start is very

much lower so these innovations together

can transform automakers from wringing

tiny savings out of Victorian engine and

steel stamping technologies to the

steeply falling costs of three linked

innovations that strongly reinforce each

other

namely ultralight materials making them

into structures and electric propulsion

the sails can grow and the prices fall

even faster with temporary fee baits

that is rebates for efficient new autos

paid for by fees on in

one’s and just in the first two years

the biggest of Europe’s five feeb eight

programs has tripled the speed of

improving automotive efficiency the

resulting shift to electric autos is

going to be as game-changing as shifting

from typewriters to the gains in

computers of course computers and

electronics are now America’s biggest

industry while typewriter makers have

vanished

so vehicle Fitness opens a new

automotive competitive strategy that can

double the oil savings over the next 40

years but then also make electrification

affordable and that displaces the rest

of the oil America could lead this next

automotive revolution currently the

leader is Germany last year Volkswagen

announced that by next year they’ll be

producing this carbon-fiber plug-in

hybrid getting 230 miles a gallon also

last year BMW announced this

carbon-fiber electric car they said that

its carbon fiber is paid for by needing

fewer batteries and they said we do not

intend to be a typewriter maker out he

claimed it’s going to beat them both by

year seven years ago and even faster and

cheaper American manufacturing

technology was used to make this little

carbon fiber test part which doubles as

a carbon cap in one minute and you can

tell from the sound how immensely stiff

and strong it is don’t worry about

dropping it it’s tougher than titanium

Tom Friedman actually who acted as hard

as he could with a sledgehammer without

even scuffing it but such manufacturing

techniques can scale to automotive speed

and cost with aerospace performance they

can save four-fifths of the capital

needed to make autos they can save lives

because this stuff can absorb up to 12

times as much crash energy per pound to

steel if we made our autos this way it

would save oil equivalent to finding one

and a half Saudi Arabia’s or half an

OPEC by drilling in the Detroit

formation a very perspective play and

all those

Detroit cost an average of 18 bucks a

barrel they are all American carbon free

and inexhaustible the same physics in

the same business logic also applied to

big vehicles in the five years ending at

2010 Walmart saved 60% of the fuel per

ton-mile in its giant fleet of heavy

trucks through better logistics and

design but just the technological

savings in heavy trucks can get to

two-thirds and combined with triple to

quintupled efficiency airplanes now on

the drawing board can save close to a

trillion dollars also today’s military

revolution in energy efficiency is going

to speed up all of these civilian

advances in much the same way that

military R&D has given us the Internet

the global positioning system and the

jet engine and microchip industries as

we design and build vehicles better we

can also use them smarter by harnessing

four powerful techniques for eliminating

needless driving instead of just seeing

the the travel grow we can use

innovative pricing charging for road

infrastructure by the mile not by the

gallon we can use some smart IT to

enhance transit and enable car sharing

and ride-sharing we can allow smart and

lucrative growth models that help people

already be near where they want to be so

they don’t need to go somewhere else and

we can use smart IT to make traffic

free-flowing

together those things can give us the

same or better access with 46 to 84

percent less driving saving another

point four trillion dollars plus 0.3

trillion dollars from using trucks more

productively so forty years hence when

you add it all up a far more mobile US

economy can use no oil saving or

displacing barrels for 25 bucks rather

than buying them for over 100 adds up to

a four trillion dollar net saving

counting all the hidden costs at zero so

to get mobility without oil to phase out

the oil we can get efficient and then

switch fuel

those hundred and twenty-five to 240

mile per gallon equivalent autos can use

any mixture of hydrogen fuel cells

electricity and advanced biofuels the

trucks and planes can realistically use

hydrogen or advanced biofuels the trucks

could even use natural gas but no

vehicles will need oil and the most

biofuel we might need just three million

barrels a day can be made 2/3 from waste

without displacing any cropland and

without harming soil or climate our team

speeds up these kinds of oil savings by

what we call institutional acupuncture

we figure out where the business logic

is congested and not flowing properly we

stick little needles in it to get it

flowing working with partners like Ford

and Walmart the Pentagon and the long

transition is already well underway in

fact three years ago mainstream analysts

were starting to see peak oil not in

supply but in demand and Deutsche Bank

even said world oil use could peek

around 2016

in other words oil is getting

uncompetitive even at low prices before

it becomes unavailable even at high

prices but the electrified vehicles

don’t need to burden the electricity

grid rather when smart autos exchange

electricity and information through

smart buildings with smart grids they’re

adding to the grid valuable flexibility

and storage that helped the grid

integrate varying solar solar and wind

power

so the electrified autos make the auto

and electricity problems easier to solve

together than separately and they also

converge the oil story with our second

big story saving electricity and then

making it differently and those twin

revolutions in electricity will bring to

that sector more numerous and profound

two diverse disruptions than any other

sector because we’ve got 21st century

technology and speed colliding head-on

with 20th and 19th century institutions

rules and cultures changing how we make

electricity gets easier if we need less

of it most of it now is wasted and the

technologies for saving

keep improving faster than we’re

installing them so the unbought

efficiency resource keeps getting ever

bigger and cheaper but as efficiency in

buildings in industry starts to grow

faster than the economy America’s

electricity use could actually shrink

even with the little extra use required

for those efficient electrified autos

and we can do this just by reasonably

accelerating existing trends over the

next 40 years buildings which use 3/4 of

the electricity can triple or quadruple

their energy productivity saving 1.4

trillion dollars net present value with

a 33 percent internal rate of return or

in English the savings are worth four

times what they cost an industry can

accelerate to doubling its energy

productivity with a 21 percent internal

rate of return

Nakia is a disruptive innovation that we

call integrative design that often makes

very big energy savings cost less than

small or no savings that is it can give

you expanding returns not diminishing

returns that is how our 2010 retrofit is

saving over two-fifths of the energy in

the Empire State Building

remanufacturing those six and a half

thousand windows on-site into Super

Windows that pass light but reflect heat

plus better lights and office equipment

and such cut the maximum cooling load by

a third and then renovating smaller

chillers instead of adding bigger ones

saved seventeen million dollars of

capital cost which helped pay for the

other improvements and reduce the

payback to just three years integrative

design can also increase energy savings

in industry dowas billion dollar

efficiency investment has already

returned nine billion dollars but

industry as a whole has another half

trillion dollars of energy still to save

for example three fifths of the world’s

electricity runs motors half of that

runs pumps and fans and those can all be

made more efficient and the motors

that turned them can have their system

efficiency roughly doubled by

integrating 35 improvements paying back

in about a year but first we ought to be

capturing bigger cheaper savings that

are normally ignored and are not in the

text books for example pumps the biggest

use of motors move liquid through pipes

but a standard industrial pumping loop

was redesigned to use at least 86

percent less energy not by getting

better pumps but just by replacing long

thin crooked pipes with fat short

straight pipes this is not about new

technology at just our rearranging our

metal furniture of course it also

shrinks the pumping equipment at its

capital costs so what does such savings

mean for the electricity that is 3/5

used in motors well from the coal burns

at the power plant through all these

compounding losses only a tenth of the

fuel energy actually ends up coming out

the pipe is float but now let’s turn

those compounding losses around

backwards and every unit of flow or

friction that we save in the pipe saves

10 units of fuel cost pollution and 100

levels cause global weirding back at the

power plant and of course as you go back

upstream the components get smaller and

therefore cheaper our team has lately

found such snowballing energy savings in

more than 30 billion dollars worth of

industrial redesigns everything from

data centers and chip fabs to mines and

refineries typically our retrofit design

and save about 30 to 60% of the energy

and payback in a few years while the new

facility design save 40 to 90 odd

percent with generally lower capital

cost now needing less electricity would

ease and speed the shift to new sources

of electricity chiefly renewables China

leads their explosive growth and their

plummeting cost in fact these solar

power module costs have just fallen off

the bottom of the chart and Germany now

has more solar workers than America has

Steelworkers already in about 20 states

private installers will come put those

cheap solar cells on your roof with no

money down and beat your utility bill

such unregulated products could

ultimately add up to a virtual utility

that bypasses your electric company just

as your cell phone bypass your wireline

phone company and the sort of thing

gives utility executives the

heebie-jeebies and it gives venture

capitalists sweet dreams in renewables

are no longer a fringe activity for each

of the past four years half of the

world’s new generating capacity has been

renewable mainly lately in developing

countries in 2010 renewables other than

big hydro particularly wind and solar

cells got a hundred and fifty 1 billion

dollars of private investment and they

actually surpassed the total installed

capacity of nuclear power in the world

by adding sixty billion watts in that

one year that happens to be the same

amount of solar cell capacity that the

world can now make every year a number

that goes up 60 or 70 percent a year

in contrast the net additions of nuclear

capacity and coal capacity in the orders

behind those keep fading because they

cost too much and they have too much

financial risk in fact in this country

no new nuclear power plant has been able

to raise any private construction

capital

despite seven years of hundred plus

percent subsidies so how else could we

replace the coal-fired power plants well

efficiency and gas can displace them all

at below just their operating costs and

combined with renewables can displace

them more than 23 times and less than

their replacement cost but we only need

to replace them once we’re often told

though that only : nuclear plants can

keep the lights on because they’re 24/7

whereas wind and solar power are

variable and hence supposedly unreliable

actually no generator is 24/7 they all

break and when a big plant goes down you

lose a thousand megawatts in

milliseconds often for weeks or months

often without warning

that is exactly why we’ve designed the

grid to backup failed plants with

working plants and in exactly the same

way the grid can handle window wind and

solar powers for castable variations our

early simulations show that largely or

wholly renewable grids can deliver

highly reliable power when they’re

forecasted integrated and diversified by

both type and location and that’s true

both for continental areas like the US

or Europe and for smaller areas embedded

within a larger grid that is how for

example for German States in 2010 were

43 to 52 percent when powered Portugal

was 45 percent renewable powered Denmark

36 and it’s how all of Europe can shift

to renewable electricity in America are

aging dirty and insecure power system

has to be replaced anyway by 2050 and

whatever we replace it with it’s got to

cost about the same about six trillion

dollars net present value whether we buy

more of what we’ve got or new nuclear

and so-called clean coal or renewables

that are or or less centralized but

those four futures at the same cost

differ profoundly in their risks around

national security fuel water finance

technology climate and health for

example our over centralized grid is

very vulnerable to cascading and

potentially economy shattering blackouts

caused by bad space weather or other

natural disasters or terrorist attack

but that blackout risk disappears and

all of the other risks are best managed

with distributed renewables organized

into local micro grids that normally

interconnect but can stand alone at need

that is they can disconnect fractally

and then reconnect seamlessly that

approach is exactly what the Pentagon is

adopting for its own power supply they

think they need that how about the rest

of us that they’re defending we want our

stuff to work too

and at about the same cost as

business-as-usual this would maximize

national security customer choice

entrepreneurial opportunity and

innovation together efficient use and

diverse dispersed renewable supply are

starting to transform the whole

electricity sector traditionally

utilities built a lot of giant : nuclear

plants and a bunch of big gas plants and

maybe a little bit of efficiency

renewables and those utilities were

rewarded as they still are in 34 states

for selling you more electricity however

especially where regulators are now

instead rewarding cutting your bills the

investments are shifting radically

toward efficiency demand response

cogeneration renewables and ways to knit

them all together reliably with less

transmission and little or no bulk

electricity storage so our energy future

is not fate but choice and that choice

is very flexible in 1976 for example

government and industry insisted that

the amount of energy needed to make a

dollar of GDP could never go down and I

heretic Lee suggested it could go down

several fold well that’s what’s actually

happened so far it’s fallen by half but

with today’s much better technologies

more mature delivery channels and

integrative design we can do far more

and even cheaper so to solve the energy

problem we just needed to enlarge it and

the results may at first seem incredible

but you know as Marshall McLuhan said

only puny secrets need protection big

discoveries are protected by public

incredulity now combine the electricity

in oil revolutions both driven by modern

efficiency and you get the really big

story reinventing fire

we’re business enabled and sped by smart

policies in mindful markets can lead the

United States completely off oil and

coal by 2050 saving 5 trillion dollars

growing the economy 2.6 fold

strengthening our national security oh

and by the way by getting rid of the oil

and coal reducing the fossil carbon

emissions

82 to 86 percent now if you like any of

those outcomes you can support

reinventing fire without needing to like

all of them and without needing to agree

about which of them is most important so

focusing on outcomes not motives can

turn gridlock and conflict into a

unifying solution to America’s energy

challenge this also turns out to be the

best way to cope with global challenges

climate change nuclear proliferation

energy insecurity energy poverty all of

which I’ll make us less safe now our

team at our my help smart companies to

get unstuck and speed this journey via

six sectoral initiatives with some more

hatching of course there’s still a lot

of old thinking out there to former

oilman Maurice strong said not all the

fossils are in the fuel but as Edgar

Willard who used to chair DuPont reminds

us in companies hampered by old thinking

won’t be a problem because he said they

simply won’t be around long term I’ve

described not just a once in a

civilization business opportunity but

one of the most profound transitions in

the history of our species we humans are

inventing a new fire not dug from below

but flowing from above not scarce but

bountiful not local but everywhere not

transient but permanent not costly but

free and but for a little transitional

tale of natural gas and a bit of biofuel

grown in ways that sustain and endure

this new fire is flameless efficiently

used it really can do our work without

working our undoing each of you owns a

piece of that five trillion dollar prize

and our new book reinventing fire

describes how you can capture it so with

the conversation just begun at

reinventing fire calm let me invite you

each to engage with us and with each

other and with everyone around you to

help make the world richer fairer cooler

and safer by together reinventing fire

thank you

[Applause]