The Energy Wars: Some Lessons Learned

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James J. Duderstadt
President Emeritus
University Professor of Science and Engineering
The University of Michigan

Ann Arbor, Michigan
February 11, 2007



So where do we stand 30 years later?
So Why Does This Happen?
Lessons Learned
So, what to do?

The nation’s energy crisis gets quite a bit of attention. Consider the headlines:

Actually, one of our faculty members, Jerry Mader, pulled these headlines from newspapers of 30 years ago…in the wake of the OPEC Oil Embargo and other energy shocks of the 1970s.

This brought back many of my own memories from the 1970s But with OPEC, long lines at the gas pump, and finally Three Mile Island, it was also increasingly clear that while every aspect of contemporary society is dependent upon the availability of clean and affordable energy resources, these were at considerable risk. Both Presidents Ford and Carter conveyed a sense of extreme urgency for the energy challenge (“we must deal with energy on a war footing”) and proposed major new programs to develop new energy sources.


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So where do we stand 30 years later?

At the National Level

1) The urgency of the 1970s soon disappeared as OPEC opened its pipelines and oil began to flow once again…and the efforts to develop new technologies faded away. In fact, over the past 30 years, the federal government has actually reduced energy R&D by 75%, the electrical utility industry down by 50% (EPRI), and shareholder pressure for short term earnings has eroded the capacity of great industrial research laboratories such as the Ford Scientific Laboratory and General Motors Research Laboratories.

• As one of my colleagues put it, when the OPEC crisis receded, the leaders of industry and government put their concerns and plans in their drawers, forgot about the crisis, and went out and started playing golf again.
2) Just as M. King Hubbert predicted, domestic U.S. petroleum production peaked in the mid 1970s, while demand continued to rise by 40% over the next two decades.
• As a consequence, today over 60% of our petroleum is now imported, with over 90% of it controlled by governments in politically unstable regions such as the Middle East.

• Rapid increases in gasoline prices have brought the American automobile industry to its knees, as a combination of burdensome labor costs and corporate myopia have inhibited their capacity to compete with the high fuel efficiency products of foreign companies.
3) Nuclear power has also been in a state of suspended animation, with no new plant orders after the late 1970s, even though the 103 plants currently in operation not only provide 20% of the nation’s electricity but do so at costs considerably below those of any other energy source including coal. (And Michigan today has only four nuclear plants, all approaching the end of their initial 40 year operating licenses.)

4) And despite what Big Oil tells you, global warming is real and it is likely here to stay. To quote the recent Intergovernmental Panel on Climate Change report:

5) And, throughout it all, our political and corporate leaders continue to back into the future, blind to the degree that our American addiction to increasingly expensive foreign petroleum is not only obliterating our national competitiveness in key industries such as automobile and airlines, but driving us into international conflict (Iraq), while putting future generations at great risk of global climate change.

Closer to Home in Michigan

Unfortunately, we see the consequences of the past three decades of neglect in our state. Welcome to the poster child for the “flat world”…

Michigan’s economy, just as the national economy, has been based on the availability of cheap energy. Furthermore, every aspect of life in our state is dependent upon the availability of clean, affordable, flexible, and sustainable energy resources.

The situation is almost as serious throughout the Great Lakes region,

Again, energy is a key factor, since the 20th century prosperity of this region was based on high energy industries such as manufacturing and high energy products such as cars and trucks.


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So Why Does This Happen?

So why did this happen? Why is the energy crisis even more serious today, some 30 years after the nation and its leaders claimed to recognize and address the challenge?

Of course, some of the reason for our failures in energy policy and action have to do with:

1. Downright foolishness and irresponsibility: Industry

2. Extraordinary myopia: Federal and State Government

EXAMPLE: DOE’s effort during the Clinton administration to kill nuclear power by zeroing out R&D.
3. Penny wise and pound foolish

4. And, of course, some of this was just the “not on my watch syndrome”

Characteristics of energy itself:

Both Gary Was and Nate Lewis highlighted the particular characteristics that make it so challenging: magnitude, timescale, and complexity. Timescales (generations) Complexity Little wonder then that one commonly hears the complaint that “The energy crisis is like the weather…everybody complains about it, but nobody is able to do much about it!”

While I certainly do not claim to have any new or profound wisdom on the subject, let me be so bold as to share with you several lessons I have learned from fighting the energy wars over the past four decades…


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Lessons Learned

Lesson One: To make any progress at all, you have to get serious about things. Simply ranting about it or making token investments will simply bounce off without a dent–although they might make things work.

Lesson Two: Today we need a much greater sense of urgency. Here I would only note two very large clouds on the horizon: Lesson Three: We simply must think and act far more boldly. Lesson Four: Brace yourself: We must be prepared for quite dramatic paradigm shifts.

Nate Lewis laid out the “experiment” we will be performing on Spaceship Earth over the next several decades–one that could determine the future of both the planet and of humanity itself.

But let me suggest another such paradigm shift–that in information and communications technology or “cyberinfrastructure”.

So, beyond the fact that such cyberinfrastructure is increasingly dependent on energy infrastructure (just witness the growing number of megawatt generators in the parking lot of Internet2 in south Ann Arbor), what else might this technology suggest?

Remember, while energy infrastructure evolves on timescales of a generation, the new technologies driving such profound changes in our world–technologies such as information technology, biotechnology, and soon nanotechnology–are characterized by exponential growth.

When applied to microprocessor chips, this remarkable property, known as Moore’s Law, implies that every 18 months computing power for a given price doubles. And for other elements of digital technology, such as memory and bandwidth, the doubling time is even shorter: 9 to 12 months. Scientists and engineers today believe that the exponential evolution of these microscopic technologies is not only likely to continue for the conceivable future, but in fact, the pace may be accelerating. (Computer engineers call this “riding the exponential”, since whichever parameter is increasing the most rapidly determines the characteristics of the technology.)

Put another way, digital technology is characterized by an exponential pace of evolution in which characteristics such as computing speed, memory, and network transmission speeds for a given price increase by a factor of 100 to 1000 every decade. Over the next decade, we will evolve from “giga” technology (in terms of computer operations per second, storage, or data transmission rates) to “tera” to “peta” and eventually “exo” technology (one billion-billion or 1018).

Put another way, in the 30 years that it will take to transform our energy infrastructure, info-bio-nano technology will increase in power a billion-fold!!

By 2020 the thousand-dollar notebook computer will have a data processing speed and memory capacity of petaherz, roughly comparable to the human brain (Kurzweil, 1999). Furthermore, it will be so tiny as to be almost invisible, and it will communicate with billions of other computers through wireless technology.

EXAMPLE: Intel’s recent announcement of a teraflop chip, requiring only 62 watts (rather than the megawatt required before this).

Compared to today’s technology, we can assume that within a decade we will have available infinite bandwidth and infinite processing power (at least compared to current capabilities). We will denominate the number of computer servers in the billions, digital sensors in the tens of billions, and software agents in the trillions. The number of people linked together by digital technology will grow from hundreds millions to billions. We will evolve from “e-commerce” and “e-government” and “e-learning” to “e-everything,” since digital devices will increasingly become predominant interfaces not only with our environment but with other people, groups, and social institutions.

Beyond acknowledging the extraordinary and unrelenting pace of evolution of this technology, it is important to recognize that it is disruptive in nature. The impact on social institutions such as corporations, governments, and learning institutions is profound, rapid, and quite unpredictable. As Clayton Christensen explains in The Innovators Dilemma, while many of these new technologies are at first inadequate to displace today’s technology in existing applications, they later explosively displace the application as they enable a new way of satisfying the underlying need.

While it may be difficult to imagine today’s digital technology replacing human interactions, as the power of this technology continues to evolve 100- to 1000-fold each decade, the capacity to reproduce all aspects of human interactions at a distance with arbitrarily high fidelity could well spell the death of distance–and perhaps even of today’s transportation technologies and the manner in which we utilize energy.

Remember, such profound developments are likely to occur on the same timescales that we now are planning for the transformation of our energy infrastucture!

Put another way, during one “tech turn” in energy, info-bio-nano technology will under truly explosive exponential change, increase in power a billion fold!

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So, what to do?

Well, let me tell you what we’re trying to do!

Fifty years ago, the University of Michigan made one of the most extraordinary commitments in the history of American higher education. In the aftermath of WWII, it sought to build a memorial to honor the 579 members of the University community who gave their lives for their country.

Interestingly enough it was students themselves, many of them veterans of the war, who proposed the appropriate memorial. Rather than building “a mound of stone, the purpose of which might be soon forgotten”, they proposed building as a living memorial, a research effort, known as the Michigan Memorial Phoenix Project, that would conduct research and education on the peaceful applications of atomic energy. Just as the atomic bomb had ended the war, the students sought to create from its ashes the tools that humankind could use for peace and prosperity.

When it was launched in 1948 to conduct research on peaceful uses of atomic energy, President Ruthven called the Phoenix Project “the most important undertaking in the University’s history.”

During the next half-century, the Phoenix Project had a remarkable impact both through its research on nuclear science and technology and its educational programs. As we begin a new century, the challenges facing our world have changed significantly. And in particular, energy today poses just as profound challenges and opportunities as atomic energy did a half-a-century ago. Today it seems altogether appropriate that the phoenix bird should rise from the ashes once again–that the Michigan Memorial Phoenix Project be rededicated to a new purpose, befitting its war memorial status and sustaining its impact, transforming it into the Michigan Memorial Phoenix Energy Institute.

The new mission approved in 2004 by the Regents, to conduct research on the development of energy sources and energy policies that will promote world peace, the responsible use of the environment, and economic prosperity, seems appropriate within this historical context.

So too does the proposed role of the Phoenix Project in coordinating the research activities from a variety of disciplines that are presently dispersed among multiple schools and colleges, including research on energy generation from sources such as nuclear, hydrogen, solar, wind, and geothermal, as well as energy storage, energy management, and energy policy.

The interdisciplinary nature of the Phoenix Project is intended to encompass perspectives from the natural and social sciences, engineering, medicine, and the arts and humanities.

The Michigan Memorial Phoenix Energy Institute is being created as an enabling rather than an operational or managing organization. Its functions would be The re-dedication of the Michigan Memorial Phoenix Project to this imperative by reconfiguring it as the Michigan Memorial Phoenix Energy Institute is a timely reminder of the sacrifices of previous generations of the University of Michigan community–and the responsibility of institutions such as ours to address the dominant issues of our times.

It is intended to enable the University to respond once again to the challenges of our era, “by charting the path to a clean, affordable, and sustainable energy future by applying our strengths in public policy, economics, business, and social sciences to lay the foundation for successful implementation of our scientific and technological achievements.”

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