Greetings. Welcome to the inaugural
episode of Reality Round Table, which is going to be a monthly discussion with
mostly former guests on The Great Simplification, maybe some new people. We're going to run
these the second Sunday of every month. This first episode is with my colleagues Simon
Michaux, Pedro Prieto, and Arthur Berman, on the topic of electric vehicles. We've got many
of these scheduled in upcoming months with lots of former guests, and I think there's a different
dynamic wh
en three or four or five people, who have different perspectives on the same issue,
interrelate, cross pollinate their ideas. This was a great discussion on the opportunities
and constraints of electric vehicles as it pertains to our upcoming energy, economic,
cultural transition. I hope you enjoy the show. Greetings, my biophysical
colleagues and good friends. Hi, Nate. Hello.
Hello. With us today is Art Berman, Pedro Prieto and
Simon Michaux. Missing this inaugural Reality Round Table is
Olivia Lazard, who is one of
six of my friends who, in the last couple days, had their flights canceled or delayed to
and from Europe, she couldn't make it. I will briefly speak in her stead on what
I expect she would've presented here. We have a lot of repeat guests on the Great
Simplification. This is a deep and complex story. I would like to start doing these group
conversations more often. This is the first one and there's many topics that these three gentlemen
could speak to. The one
we've chosen for today is, what's the real biophysical story, the limits,
constraints, opportunities, challenges, and eventual roadmap, for electric vehicles?
So I think the format that we'd like to do is each of the three of you will have five minutes
to present a slide, or tell a story of something that is perhaps misunderstood by the general
public about scaling EVs to replace internal combustion engines. And then, we'll just have an
open conversation. So I'm really looking forward to thi
s. I should point out that the three of
you have been friends of mine for a long time, and two of you have never actually seen
each other face-to-face, although we've probably shared thousands of emails.
Okay, let's kick it over to Simon, who, you have the mic, and can you explain
to us the numbers on your slides? Okay. So there are four slides. On slide one is
a graph, and what I've done is a calculation that looks at the amount of metal that we will need
for the complete phasing out of fo
ssil fuels, this is the global calculation. In this
calculation, there is the number of vehicles, with an understanding of how many of them are electric
vehicles, and some are hydrogen fuel cells, how big they are, how much work they did, how much
extra electrical power is needed. Also included in this calculation is the number of solar panels
and wind turbines and stationary power storage. Now, on this graph, it's a log scale,
the red is the total metal needed, including a 28-day buffer, f
or wind and solar.
The blue is the same, but now we're going to cut the buffer back to 48 hours plus 10%.
The yellow is the stated global reserves, and the black is the global metal production
in 2019. Now, this is a log scale, so what this is showing is the needed metal that we have far
exceeds the reserves that we have in the ground, and it also far exceeds the mining production
that is possible. So you're actually looking at the ability for the mining industry
to deliver on the green tr
ansition. So we're going to take this a
step further now, slide two, if Europe was to achieve a 30% market share by
2030. Now, this is something they've already agreed upon. It's actually described in the
next slide, we'll get to that in a moment. But if they were to have a 30% phase out of fossil
fuels by 2030, as they have already promised, by 2030, six years and six months away, the
graph now shows just what Europe has to do. Only now, I've actually included in pink
a six-hour buffer fo
r stationary storage, and this still shows material shortfalls for
copper, nickel, lithium, cobalt and vanadium. If we were to do this, in Europe alone,
in the next six years and six months, 76.6 million EVs will be constructed,
with 3.4 terawatt hours of batteries. 1.7 hydrogen fuel cell trucks will be
constructed. The capacity to annually produce, transport, and store 2.94 million
tons of hydrogen will be produced. An extra annual 892.1 terawatt hours of non-fossil
fuel electrical power
generation will be created, and stationary power storage will be developed.
Now, if it's 28 days, that's 52.46 terawatt hours, which I believe is actually too small. So if
we were to do this, and apply an energy split that was put out by the IEA for what they believe
2050 would be, we're talking about, we're going to build 14,941 average sized power stations,
in Europe alone, or an installed capacity of 565 gigawatt hours in the next six months. Slide three. The reason I've actually picked t
his
target of 2030, 30%, in 2016, the Paris Accords were signed, and the IEA put out a sustainable
development scenario, what would happen if we were to meet that Paris Accord. And they would suggest
that by 2030, there'd be a 30% market penetration for electric vehicles, and 30% of the power grid
would also be electrified. If we were to do this, again, we've got the graph, but now we've also
got some numbers about how much metal we need. There are three scenarios, 28 days for the buffer,
48 hours for the buffer, and six hours for the buffer, up against global mental production in
the year 2019. And 2019 was the last year before COVID, so it's the last sensible year of data
we'll see for some time. If we were to do this, we're talking about five, this is for the 28-day
buffer, five years of global copper production, 17 years of global nickel production, 280
years of lithium global production, 60 years of cobalt production, and 175 years of global
production, but this is just
a resource Europe. Slide four. So they have actually made it a stated
target. The 10% of what we need will be actual be mined by European minds, 40% will be smelted and
refined in European territory, and 15% will be recycled. So this fourth slide now has the graph,
but now it's got three tables. If 10% of the metals that we would need was mined in European
territory, that doesn't do any mining at all, and looking at the 28-day buffer, in the
interest of saving time, 28 years of global lith
ium production has got to happen on
European soil, the equivalent of 28 years of global production of lithium, just in Europe.
If 40% of this was refined on European territory, 112 years of lithium global production
would have to be refined, just in Europe, and we would have to recycle four years of
global lithium production, just in Europe. I thought that we would now
all ask Simon questions about his presentation. I'll start with two.
Why is the 28-day buffer what you assumed, and is tha
t reasonable, and do other reasonable
people agree with you, or why is that important? So as it turns out, no one agrees
with me. So in the literature- Not no one, Simon, I agree with you. I
provided you data to support your perspective. Actually, yes. Now that you mention it, you
did actually, yes. So in the literature, they have got five to seven days of power buffer,
and they've come to that conclusion by looking at the differences between peaks and troughs, supply
and demand, on a day-
to-day basis. And they found that, looking at data over the last 50 years,
five to seven hours, plus some other technologies, is all that's needed. They did not look at
the difference between seasonal variation. Now, this is a very controversial statement: the
sun in summer is stronger than the sun in winter. Wow. Oh, no. So the massive difference between
summer and winter has not been included in that calculation. Now, the way we balance our
power systems at the moment is we balance them e
xternally, as in we just dial up more power from
an external power system, usually fossil fuels. Like in Spain, they use coal and gas, in Europe,
they use mainly gas. If they need more power, they just send more power. A solar and wind system will
not be able to do that because we won't have those fossil fuels to use. But also, they're so massive
that they can't actually be balanced off something else, they have to be internally self-sufficient.
So I found a reference that said one month buf
fer was all that was needed to actually balance
the system through the seasonal variations. It wasn't a very sophisticated study, but it was
a reference. Looking at the solar radiance of somewhere like Germany, one month is not going
to be enough. Now, the US Department of Energy did an internal audit based on my work, and
they found that wind and solar did indeed underperform four months of the year, at the
seasonally worst and most inconvenient time. So we will need a buffer of some sort,
it will
be much, much more than five or six hours. Now, I picked 28 days, it was a conservative
estimate, but it's not the real one. So follow up question to that is, I could
imagine for a hospital or for a factory, we need uninterrupted power, and
that's why you chose a 28-day thing. Yes.
But what if the sun was weaker or there were low output of intermittent renewable energy,
that there could be carpooling rules, or no one's allowed to drive by themselves,
or demand side issues, meaning
that we wouldn't really need 28 days of buffer, and
therefore we wouldn't really need orders of magnitude more metals that you presented? Is
something like that a middle path feasible? Nope. Why not? So our technology requires clean sinusoidal power
to be smooth, same frequency, the same voltage, the same current, 100% of the time. Our whole
technology is based around that, so that's why we need to do this. The size of the buffer at 28 days
is something like 2,192 terawatt hours a year. Co
mpared to the electric vehicle fleet, that
is about 30 times the size of the electric vehicle fleet, assuming all the heavy vehicles
are actually going to be hydrogen fuel cells. So the problem is so large that if you actually
co-opted all electric vehicles into such a scheme, it still would not be enough. So I have one more question, and then
I'm going to let Pedro and Art ask you some things. Do the people planning
the 30% EV penetration in Europe truly believe that? Do you have
any evid
ence to that effect? No. Or is it a story that has to be told because it
matches up with some other political initiatives, et cetera? You have to remember that everyone is still
operating like fossil fuels are still here. Everyone attends this conference on an
airplane, they'll drive there in a car, they'll use computers. All of it is run by
fossil fuels, and so the whole thing of the green transition so far has been ideological,
it is not tethered to reality at all. What they believe is wh
en their arm waving is
finished, that this is someone else's problem. So by the way, sorry, one last question, the
impetus for electric vehicles in Europe and globally isn't because we're passing peak oil and
because of fossil fuel depletion, it's because of decarbonization of our transportation
system. So the goal itself is reducing CO2, not having a replacement alternative when
fossil fuels begin their inexorable decline. Correct. They're not prepared to discuss out
loud the dependency o
n fossil fuels at all, let alone anything like peak oil or what peak oil
might become. It is all about decarbonization. Right. Art, Pedro, would you like to
follow up with Simon's presentation? Yes. I've heard that Simon has been talking
also about hydrogen vehicles and hydrogen fleet. I don't know how much, or how did you
balance hydrogen with electric vehicles in itself? Because hydrogen vehicles could be both
electric, from the conversion of hydrogen into electricity within the same car,
or could
be also thermal vehicles from hydrogen. I don't know because we are talking about just
how many angels are able to stand on the top of a pin. This is still very unrealistic, but
how did you make this balance of resources? I looked at a number of scenarios. In my original
report, there were six scenarios. One scenario was a complete electric vehicle system, another
scenario was a complete hydrogen system, and I was able to compare like-with-like,
and I found something unexpected.
What I found was the mass of the electric vehicle
battery was 3.2 times the mass of the hydrogen fuel tank of the equivalent H-cell vehicle. So
what that meant was, a H-cell vehicle could go three times further or last three times longer,
so anything long range or anything that was very power consumption should be hydrogen fuel cell.
All right, but hydrogen is not an energy source, it's an energy carrier. You've got to make the
hydrogen, and if you're not allowed to use gas and you've got to
use electrolysis, so
I looked at what was involved with that, and I got some conservative numbers. If it
takes about 50 kilowatt-hours to produce one kilogram of hydrogen, and about two and a half
kilowatt-hours to compress that gas into a 700 bar system, a tank. And then, when you actually put
it through a PEM system, you get 15 kilowatt-hours of electricity out the other side. So with that
in mind, you actually are using 2.5 times the electricity to produce the hydrogen, compared
to cha
rging the equivalent electric vehicle. And so, that puts a hell of a
stress on the power grid, because we're not talking about a small application here.
So you put those two together, any heavy vehicle, the entire maritime shipping industry, any
diesel freight train that goes between cities, and trucks, I made the assumption that
they're all hydrogen fuel cells. Now, there are EV technology apparently that can
do that, just as there's a hydrogen fuel cells that can do all vehicle classes as
well. This is
purely a logistics split and it's very crude. All heavy vehicles are hydrogen fuel cell, all short
range vehicles, like passenger cars, vans, buses, delivery trucks, anything that has
a range of 100 kilometers or less, or is in a city, that should
be an electric vehicle. Yes, it's not realistic. We are angels dancing
on a pin, but I had to put the cut somewhere. Okay, that's good. May I have a second question? Yep. Because, you've mentioned that the networks will
be so stress
ed if we try to put all this energy into the electric vehicle fleet. Yesterday,
there was information in the German newspaper, Der Spiegel about the problem that this
is going to be created, they say that the German network is already having experience
some stress. Have you already dimension - I have some preliminary information that
probably I will deliver later on what about the Spanish grid - but do you have any
idea of how much the electric networks should evolve to be able to deliver t
his energy to
the 100% electric vehicle fleet in the world? So this is an opinion, but if our society was
petroleum driven before, but now we're going to go to electric, much, much more stress is
going to be put on the electric system and it's going to have to be upgraded. The entire
system, on a worldwide basis, is held together with chewing gum and positive thinking. They
have not been doing their maintenance. And that is in every country around the world with
various different degrees o
f, "Oh my goodness." So if we are going to go that path, then
we're talking about a comprehensive rebuild and restructure of the entire electrical grid.
So we'll actually be able to take not only the extra power, but be much more reliable, because
it's constantly breaking down at the moment. We just aren't keeping up our maintenance, we're
just not spending the money. And so, I think a fundamental rebuild would have to be a
necessary part of the equation for everyone. Just a quick anecdote
there. In one of my academic
papers, we showed that the correlation between electricity stability and GDP was extreme, over
99%, that even small brownouts and blackouts severely handicapped a country's economic output.
And the more lack of electricity and instability, there was really upheaval, so that's an important
point. Art, do you have some questions for Simon? Yeah, I sure do, Nate. Simon, I'm just
backing way off of this thing. What percent, let's just take Europe, for instance, or
any example you like, but in your scenario, what percent of total electric power do electric
vehicles use compared to the total consumption? So I've got we need 37,000 terawatt hours
of extra capacity. About four and a half thousand terawatt hours will be required
to charge the electric vehicle fleet. So what's happening there is the hydrogen
economy is doing most of the work. So what percentage would it be? It'd be
about 20%, I suppose, something like that. Yeah, it's more than I thought
it would be. But it's because hydrogen is doing the heavy lifting, right? That's right. In fact, so the hydrogen fleet
was only 30 million vehicles, but the electric vehicle fleet was 1.39 billion. But the hydrogen
fleet was using more than twice the electricity to service its needs for physical
activity. That's interesting. Yeah, right. And in fact, the elephant in the room, and I
haven't actually gone down this path yet, what happens if we take coal off the board? Because all
our manufact
uring depends on coal, and the Chinese do most of it. We're not part of it, we don't
see it. But if you remove coal, what happens? Yeah, that was my next question. And so,
the electric vehicle is, by weight at least, is largely steel and plastic. And I'm not aware
at the moment that there's any technology we have, short of recycling with some electric arc
furnaces, which is first of all a small percentage, and second is a hopeful thing in the
future, we don't really know how to make steel o
r plastic without fossil fuels, and we don't know
how to make concrete to drive the vehicles on without fossil fuels. So there are a million
externalities that I'm sure you've included. Some of them. Only some.
Ah, okay. I did a very crude calculation, Art, and
I've been flamed mercilessly for it, but I wound up with a 1000 page report,
but I was told to take a cold shower. Right. So the Swedes are developing a way of
steel producing in a hydrogen atmosphere, but they didn't think about
pr
oducing the hydrogen first. And so, they think they're going to
do it that way. It's not as efficient, it uses much more energy calorifically in
the hydrogen, and producing that hydrogen is going to be a very serious problem, and so they
don't know how they're going to get around that. So to make a silicon wafer for a solar panel,
this was supposed to be the next piece of work, so we'll see how that goes. To make a silicon
wafer for a solar panel, you've got to heat it to 2,200 degrees Cels
ius, and you've got to use
very, very pure metallurgical silicon to do it, which there's not that much, really. So at
the moment we use coal, take coal away, what is actually possible getting to that heat level?
And all we've got is some specialist biofuels, we can use hydrogen in some applications, or an
arc furnace. But if we were to telescope up the amount of coal being consumed for manufacture,
and if we were to get that same amount of heat and deliver it with biofuels or any of those
other options, the scale up would be enormous. Yeah. Far more than the planet can actually
deliver. And so, at some point, it says, "Is this sensible?" And that question is
now on every frontier of the transition, and it's the best argument for
degrowth. Is this sensible? Right. So back to the criticism of your work,
which I feel obliged to say something about, you mentioned, somewhat briefly, recycling, but
I believe that one of the arguments against your analysis is that we can do an awfu
l lot
more recycling of metals, and therefore your estimates of the resource needed are
exaggerated. Could you discuss that, please? Yep. Here's the funny part. Okay. My work
is to look at the first generation only, a straight replacement of what
we have. Less than 1%, or no, we're at 1.1% of the vehicle fleet are electric
vehicles. 98 point something percent are not. Renewable energy accounts for, what is it, four
or 5% of the primary energy pie. Whatever it is. Five. My point is the non-
fossil fuel system is yet to
be constructed and the sorts of metals we want, cobalt, lithium, vanadium, they're all very
exotic, and we do use them in the current system, but they're trace elements, they're not
used very much. So, don't actually don't have the volumes of metals we need of the exotic
metals that we want in play, and so you cannot recycle what is not yet constructed. So the first
generation at least will have to come from mining. And so this is back to the old conundrum.
Min
erals are the new oil, but which ones? So let's say we do get to the first generation.
We somehow find the metals, we dig down to the core and we... Yeah, or whatever. Some of the
ridiculous things I've been hearing. In fact that there are four basic myths that are shot at
me on a regular basis, and we can have a laugh on those in a moment if you like. But let's say we
do get to that first generation. Recycling at the moment, the technology is pretty good and it is
getting better, but the r
eal problem is getting collection. The biggest problem in the recycling
world is how do we get the right residue, to the right process plant, to do it consistently
enough to actually run that process plant? So, like I say, your mobile phones, for example,
when they run out, we don't recycle them. We put them in a drawer. 95% of mobile phones are sitting
in a drawer somewhere. And when they do recycle, they just put in the trash. And most mobile
phones are not designed to be recycled, so the
y just wind up being put into the furnace and
we just kiss goodbye to all those rare elements. So the problem is how our society fits together
socially, and our relationship with raw materials, makes recycling very, very hard to do in any
large scale. So that's a social contract change. What do we do about all the internal combustion vehicles that have to be similarly put
in the trash, or recycled, or whatever, to make space for even the 30%, much
less higher, later percentages of EVs? I do
n't know. I've not heard anyone actually
take that on. And when I asked the same, they just gave some vague arm waving
stuff, "Oh, we'll just send it to Africa and then they can sort it out." Come on, guys. Really? Yeah. Yeah. But see the ICE, they're full of valuable
materials, and alloys, and even the tires on the cars. Each tire contains seven liters of oil. At
the moment the plan is to, what they call valorize them, they'll crush them up, shred them, and do
something where they recycle
some bits out of it, like some copper, some aluminum, some steel,
but the rest gets land-filled outside Europe. I want to move on to Pedro, but before we
lose it, if you could just very briefly tell what the four myths are, just a brief
recount, Simon, since you mentioned it. Okay. So this one here is to
actually make Art laugh. So- I need a laugh today, Simon. Okay. This actually came up in a
meeting today. Four myths that are regularly shot at in our direction,
or at least my direction.
Myth one, the Earth crust is enormous. There is so
much material we could mine all the way to the Earth's core, and there is an infinite number
of resources down there, we will never run out. Wow. Oh, it's funnier. It gets funnier.
Myth two. We are an innovative species. Oh yeah. We have always innovated out of our
problems in the past and will do so again. Right. And so, its almost as if, if you
are not having the idea and you're not having it now you're too late,
because we're out of tim
e and money. Okay. Myth three, substitution. If we run
into any sort of resource blocks, that's fine, we'll just substitute it with some other material,
like it's easy. In a plug and play, it's like Lego. Take one piece out, put it back in. Yeah,
it's fine. Substitution. And the fourth one, and this is the funniest one, and Pedro, you
might die laughing here. We in Europe are a geopolitical power. We will ensure that if we run
short that we'll get supply before anyone else. So all four of t
hose- That's it. There's a theme that runs through all four of
those. They're all completely energy blind. Yeah. I was going to say delusional,
but that is actually usually, if- Yeah, if we understood the importance of the up
slope of the carbon pulse and how it's subsidized our institutions, expectations and lifestyles, and
the rules are going to change even when it's flat, let alone declining, all four of those myths
would be laid bare in my opinion. So Simon, thank you. That was excellen
t. I want to move on- Really good, yeah.
... to our next EV expert, Senor Prieto. Pedro, we will highlight your graphic. Can
you explain what we're looking at here? Thank you. First of all, probably I
should make a disclaimer saying that I'm not working for the fossil fuel industry,
or that's just, I'm not against the renewables, per se. I'm just looking at the
limits. Sorry. And I would like- What you just said is true for all of us. Go on. Previous introduction and general considerations
about the passenger car, or private car, that when going massive about one century ago, and
when it was coined the word for this, no matter if it is internal combustion engine, or if it is now
a electric car, they have created, according to Howard Kunstler, "The greatest misallocation
of resources in the history of the world." I know that you, the North Americans, are very
fond of cars and we, the Europeans, too. And most of the world as well because it gives comfort. But
this is really a c
raziness. A car it consists in a complex and costly machine that weighs about 2000
kilos, or 4,000 pounds, that is designed for four, five people, but usually carries 1.2 people in
the US per car, or 1.9 in the European Union, per vehicle. Each one weighting about 70 kilos
or 140 pounds, and is a self transported being. So what means is that the ratio, useful load
versus tare, is the worst in the transport sector, or for mobility purposes. It spends five to eight
liters of valuable precious
and limited fuel, or 25 kilowatts hour per each 100 kilometers of
transport. So the present cities and urban sprawls were designed now in the last 100 years based on
this concept. So today it will be really hard to move back to a different type of societal
mobility. There are about 1.2 billion cars, and about 300 million buses and trucks worldwide
for eight billion people. In some countries, like Luxembourg or somewhere else, there are more than
one car per person, or in the United States
it's 0.85 cars per person. The annual production before
the pandemic, were around 80 million new cars per year, about half of them are scratched every year.
So meaning that every year about 40 million new cars are thrown into the streets, or vomited
into the streets, and flooding parks, streets, roads, and motorways. The total paved roads
and motorways globally is about 65 million kilometers. In countries like Spain, there are
about .45 kilometers of linear paved road per each square kilomet
er of territory. In the U.S.
it's almost one linear mile of paved road per each square mile of territory. The question is
where are the limits to this type of growth, if there is no limits to growth? And now some
considerations about the electric vehicle. I will put the example of Spain because for Europeans
is known, and for the Americans as well it will help to understand the context, because Spain is
about the territory of California in extension, close in population to California, and
2.5 times less than GDP of California. So it's quite comparable. Spain consumes now
58 million tons of oil per year. All of them, they are imported. It has 25 million passenger
cars for 46 million inhabitants. 0.45 vehicles per person, including children, elderly,
handicap, et cetera. It has 11.7 million gasoline cars, and 13.2 million diesel cars
and .12 million electric cars. But the total consumption of gasoline, and this is important,
of 95, 98 octanes, and diesel represents only one fo
urth of all the total oil imports.
So the rest is going for kerosene for aviation, liquified petroleum gases, diesel for trucks,
vans and machinery, agriculture, fishing, merchant fleet, fuel oil for boilers, heating
furnaces, and other products like jellies and lubricants. And overall the most important thing
is some heavy oil uses are for asphalts. If the aim of the electric vehicle is to decarbonize
the economy, and to get rid of the fossil fuels as soon as possible, the move to 100% of
cars to electric vehicles will only save, in the case of Spain, 25% of the imported oil.
So what about the rest? The 10 refineries we have in Spain, and probably Art will have
much more information than me, cannot close, unless the products are replaced totally. Not
only gasoline and diesel for electric vehicles, the fractioning towers in the refineries may
slightly change the percentage of products that are living out from the crude oil, but cannot get
rid of gasoline and diesel, and produc
e only the rest of the needed, refined products. So the
question is on which asphalt we will expect to run the 25 million vehicles in Spain, or
the 1.2 billions in the world, if we have no more asphalt and we close the refineries? Are we
going to transform all the 65 million kilometers of roads with cobblestones, for instance?
This is ridiculous. We have to change and we have to think on these things. The electric
vehicle to compensate the heavy burden, as Art has already lightly mentioned,
the heavy
burden of the battery, which is about 500 kilos, has more plastics than usual internal combustion
engine cars. At present, they compose 50% of the car volume, but just weigh 10% of the total car.
So some of these plastics include structural security materials, so hard that they can
resist in key parts of the vehicle. So the electric network in Spain has already
30 million contracts for electricity supply, but the average electricity contract is 3.45
kilowatts, monophase contract.
That means that this is absolutely insufficient to recharge the
electric vehicles at homes. Building an structure to recharge 25 million electric vehicles will
imply to increase the electricity production, at least in Spain, in some 25%, which is
not far from the Spanish grid capabilities, but will need to duplicate, at least, the existing
network to warranty the power in each terminal. Spain has about half of the vehicles that have
no private or condominium garage, so they are sleeping in
the streets. About 12 million cars are
sleeping in the streets. Creating infrastructure to get a public recharging post for these users in
the streets, which are the lower income ones, it's simply out of reach, as Simon has mentioned. The
public recharging posts are much more expensive, as they need identification cards, the user, to charge him for the electricity consumed. And they
are much more subject to vandalism. Now we have another problem, which is the
secondhand car, the secondhand
market with the electric vehicles. In 2022, the last year,
in Spain they sold about three million cars. From them 1.8 millions were secondhand cars in
the market. So there are internal combustion cars with 300,000 kilometers, which are working
perfectly, and they are being sold with less than 1000 euros, the car, and it's working perfectly.
So, the Mileuristas, which are the people that in Spain, there is a lot of young people earning
less than 1000 euros a month, they could afford to buy to
day additional car with 300,000 kilometers.
But how on hell are they going to buy an electric vehicle or a secondhand electric vehicle, if we
consider that the average mileage in Spain is 12,000 kilometers a year, or 7,800 miles per
year, and that the car runs about 35 kilometers per day on average, and 97% of the time is idle.
Considering that the average price of a thermal car, new car, is 16,500 euros, or considering that
the national fleet is 12.5 years old in average, and is growing in
age. And considering that the
best battery warranty of an electric vehicle is eight years, and the battery alone cost almost
half of the electric vehicle itself, which means 1.5 to two new thermal cars, in equivalent.
So who will buy a second hand electric vehicle, which is 10 years old, considering that the
vehicle costs two to three times in average than a new thermal one, and that the battery
replacement is around the corner, assuming that is still a six in the old format? So considering
that the usual recommendations are not to spend... Here in Spain, in the statistics, they say not
to spend more than 25% of the income in a car, including credit amortization with 90% of the cars
bought with credit, fuel provisions, insurance, et cetera. So if we crosscheck the average income
salaries in Spain, of the 20 million active workers, with the prices of the electric vehicles,
about 70 to 80% of the people could not afford to buy an electric vehicle. So that's, I'm already
finish
ing. I don't know how I am about time. Well, time wise, you're fine. I just am
smiling because our podcast curator, Lizzy, is going to have to spend a whole week doing show
notes on your last five minutes of statements, so- Agreed. Mucho gracias, Pedro. So basically
what you're saying, I think, is we have reductionist experts who are planning these
decisions, without looking at the whole system. Yes. And another thing that I'm hearing
is that optimizing for carbon, reducing carbon, in the t
ransportation sector is
not going to reduce our demand for a barrel of oil, of which gasoline is one product. Art and
I have talked about this before on podcasts, because we still need the asphalt, the
diesel, the plastic precursors, et cetera. And then thirdly, I think you're right,
as things get worse economically, the vast majority of people won't be able to
afford a car the way that we did the last 30 or 40 years. And so transporting humans from
point A to point B is going to probably
have to be done differently than internal combustion
engines, electric vehicles, it's going to have to be more buses, trains, bicycles, and
walking. What do you think about that? Yes, you're right. I think we have to think
completely in a new transport system, at a global scale. I'm talking about Spain, which is the 14th
country in the world in GDP. I'm not talking about the 200th countries in the world, most of them,
which are far from even reaching the heights we have reached in the Unite
d States and in Europe.
It's something incredible. And it's not only that, it's a huge problem. It seems that the people
that is designing, that is financing the new transformation into electricity of our
economy, they are starting the house by the roof, instead of starting by foundations.
I wonder why they didn't start electrifying the heavy trucks, for instance? We are in the fourth
years of delay of the Tesla Semi, which is not going to work properly. And we have no still any
heavy machi
nery for mining, or for civil works, or for tractors in the agriculture. Why
don't we electrify agriculture first, if it is possible? So perhaps we will realize
that it's not so possible to electrify many of the things we have now at hand. Or if
we think about using the energy carriers, as Simon has mentioned, we will then
understand how bloody expensive is just to get one kilogram of hydrogen,
and to put it at 700 bars of pressure. So, I think that one question that
maybe many of the view
ers want to ask, so I'll ask it for them, is isn't
it true that the price of electric vehicles is going down all the time? Your points
are well-made, Pedro, that right now the EVs are too expensive for many working class
people, but with the price of EVs going down, the fact that solar and wind are believed to
be by far the cheapest forms of electricity, don't you think that there is technological reason
to expect that a lot of what you said will change? This is a good question, they have p
osed many
times. The ever decreasing prices of electricity, and the ever decreasing prices of the
renewables. Because if we are thinking in producing electricity with just 100% of
renewables, then we have a problem in believing that everything is going to go down on permanent
basis. Now, few days ago, Spanish magazine called Energías Renovables admitted that the price of
wind turbines has increased 40% in the last two years. So it's not going to go down forever. It
depends very much on the
price of materials and the difficulty of extracting materials, as Simon
has already mentioned. It's a huge problem. We are not going to have a decrease in price for
everywhere, at every moment. This is not true. It's reasonable. Probably what is more reasonable
is that we should start thinking in electric motorbikes, like the Chinese are doing in most of
the cases. Most of the mobility now of the Chinese in the cities is being done by motorbikes, very
light motorbikes, which are working qu
ite well within certain distances. But it is not to replace
the car park we have now of thermal vehicles in the world, the 1.2 billion. If you look at the
problem of the Thanksgiving Day, or Christmas, or a bank holiday in the United States or in Europe.
In Spain, with eight million vehicles going out to the countryside to enjoy the weekend, and thinking
the simultaneous charging of the electric vehicles in the electric stations, instead of the petrol
stations, they have not dimensioned any
thing. Yeah, I was recently in Vietnam, and I was
told that in Ho Chi Minh City or Saigon, there are something like nine million motorbikes,
in a city whose population is... Well, nobody knows exactly, but let's just say it's
15 million people. So I think that in developing countries where money is really scarce, the
attractiveness of motorbikes is very high. But that leads me to my other question, and
that is the psychological factors involved in selecting vehicles, cars, as the number
on
e target for decarbonization. In the US, there's a lot of controversy, don't take our
guns away, which I know Europeans think is silly, and so do I actually, but it's real. But if we
had a similar movement to take your cars away, guns would be trivial. So my question, Pedro,
is is the psychological factor for personal transportation as strong in a place like Spain,
or in Europe, as it is, say, in North America? Yes, it is very strong. This psychological factor,
very, very strong. It's not o
nly because here, for instance, in our country it's between 10
and 13% of our GDP is because the automotive industry. So that is about two million jobs.
So it's an important thing. It's about 10% of the active population is involved in that. So you
think in garage, you think many things, and it's about almost one century of selling a market in
the private car, as Marvin Harris, the American anthropologist used to say when talking about
his famous book about pigs, witches or cows, and someth
ing like that, to talk about the sacred
cow in India, because the Americans or Europeans many times do not understand why the Indians
are not killing the cows. And he said, "Well, the cows are the tractors of India. They are
the fertilizers of India. They are many things in India." And he said, "But if you want to see
really a sacred cow, go out of your home and see the family car." He was writing the book in 1970.
He should have said today, "Go out and see the personal cars of all the famil
y." So
we have been living for one sitting. I have two questions and then I'll kick it
over to Simon to ask you questions, Pedro, you have in the past mentioned, and this is
digressing a little bit from electric vehicles, the importance of Spain as a tourist destination,
which also uses a lot of carbon and fossil fuels. And if that were to stop, the implications
for Spain's economy and all those cars, et cetera, would change dramatically, right? Yes. That's my favorite question, because I'v
e
made presentations in both the Canary Islands and the Balearic Islands, and these are archipelagos
which are 90% powered in electricity by fuel oil, or gas. So when they say that they have no
emissions because they have an electric car, they are lying. This 90% of this electric car
is consuming fuel oil or gas. So that's one thing. The second thing is that each of these
archipelagos has about, in Canary Islands, there are two million inhabitants, in the
Balearic Island, two million inhab
itants, but we receive 16 million tourists per year, both
in the Balearic and the Canary Island. So this is a huge traffic by plane in the Balearic Island,
mostly from Germany, and in the Canary Islands from all the rest of Northern Europe. They are
5,000 kilometers long trips, long haul trips, and they are just an average of one week stay
there. And the GDP for tourism in Spain is 15%, but for these archipelagos is 30%. So the day that
the planes are going or flowing there because they bec
ome so expensive for the tourists to go, there
will be a real crisis there in those archipelagos. But they have electric cars. Yes. 90% powered by fuel, oil, and gas. So a second question, especially with
what's happening with Ukraine and Russia, do you get the sense that the focus
on low carbon energy transition with electric vehicles as a core pillar of
it, is starting to shift towards energy security and a stable availability to
energy? Or is that not yet happening? It's a very difficult
question. We
have lost almost all the Russian gas in Europe. It was... we were importing about
120 billion cubic meters per year from Russia, out of the 160 billion we were consuming in
Europe. Spain is a privileged country because we have seven regasification ports then we are
bringing most of our gas now from LNG tankers. So we have not such a big problem.
But the rest of Europe has a big problem with the lack of Russian gas.
And there is no anything foreseen in the horizon that we can r
ecover that gas. We may
change for a while, bringing LNG tankers from everywhere else, Trinidad, Tobago, from Qatar,
from everywhere else. But this is not going to solve the problem. As somebody I think is, I
don't know whether Simon or Art have mentioned, there is no problem as far as we can have money
in Europe to buy, then let the others go to hell. Let the Africans or Southeast Asians go to hell
and we will continue getting gas, but it's not so easy. Even regasification ports are a key
problem. They have a bottleneck, and we have a bottleneck in Europe for the regasification ports,
and this is not going to be built up in one year. Simon, do you have any follow
up questions for Pedro? Not so much question but a statement in support.
For start, the Ukraine war has kicked things along towards thinking about energy security,
but we're not there yet. All our policymakers are taking the runabout, wave your arms, scream
and shout approach, not actually thinking yet, but that's
coming. Also, all studies in the past,
that I've looked at, have assumed market forces will fix everything. And they think there's going
to be like a U-shaped curve for costs. They're going to go down, down, down, down, and suddenly
it's going to be cheaper than everything else. And they believe magic happens, and that
seems to be the basis of their resource and commod... They've misunderstood what
the commodities industry really is. Pedro, listening to you, it really highlighted to me what
is missing. When I first came to Europe in 2015, and I was listening to this for the first time,
everyone was banging on about electric vehicles, but they were focusing exclusively on passenger
cars. They weren't talking about trucks. No one's talked about ships yet, they're now
starting to talk about electric airplanes. But there were no numbers.
And so what needs to happen, and what you've just highlighted the need for, is a scoping
study followed by a pre-feasibility scale study, to pha
se out fossil fuels, on a nationwide
scale. And that's got to happen in every nation. And at the moment, that doesn't exist. And Art has
the numbers, or has the knowledge to really nail, right? Everyone's talking about gasoline,
but when we lose diesel, and we lose all the heavy bunker oil for marine fuel and asphalt,
they're the units that do the physical work. They're the units that actually do our
industry. Take that away, and it's now what? So- But we're really not talking about losing
it. We're talking about using less of it and it being less available and more
costly. That's going to be the reality. Oh yeah. That'll be the reality.
But we are still geared in the idea that the markets will grow every
year and everyone shows a profit. Right. And industry will continue as it always has. So thank you. Let's move on to Art. And before I
do that, I will just mention that Olivia Lazard, our colleague, couldn't make this inaugural
Reality Round Table. She didn't send me her sl
ide because she had to miss this, but I would imagine
she would speak on behalf of the Global South, and the impact that a decarbonization attempt
will have on rematerializing our economy, and many of these minerals are located in countries that
are already enduring climate impacts, and social impacts from colonialization, et cetera. As well
as the health of ecosystems that will have to be impacted, from an acceleration of moving
the battle from the skies to the Earth, on trying to be more
sustainable. So keep those
things in mind. And Art, the mic is yours. Oh, thank you, Nate. My comments are relatively
brief. I really have only three to add to so much of what Simon and Pedro have already discussed.
But my question to Pedro on the psychological effect of the personal car, was partly because
I believe, at least in the United States, that the emphasis on electric vehicles is really a way
for the automobile industry to reimagine itself, if you will. Long before there was so mu
ch concern
about climate change, vehicle miles per year in the United States have been going down and down
and down. And now with the concerns about the peak demand and everything, car manufacturers
really need to think about marketing themselves. But along those lines, the main point I want to
make is if we're really concerned about carbon, then the, not only the best way, but perhaps the
only way to deal with it is simply to consume less energy, not to spend billions of dollars.
My goodn
ess, everything that Simon and Pedro have talked about, all of these multiple
industrial startups that don't even exist, we're going to spend billions, if not trillions,
of dollars developing an electric vehicle industry in all of its support, and passenger cars
only account for 8% of the world's emissions. Let that sink in for a minute. Back when I
used to be a manager in a big corporation, we went to training classes where they encouraged
us to say, "Now, you guys need to divide your task
s in terms of descending importance. The
really important things are the As, the less important things are the Bs. And then at the
bottom are the Cs. And what you guys tend to do is solve the C problems because they're easy and
you feel like you've accomplished something, but you haven't begun to address the A and the Bs."
Well, if passenger cars are 8% of world emissions, then EVs are very much a C problem. And so
we're spending all of this effort and all of this money to avoid addressing t
he big
part of our emissions problem, which EVs, and electricity for that matter, do
not solve. So that's point number one. Following on to what I said in the beginning, I
think that what we're really talking about here, the emphasis on electric vehicles, is mainly a
way to figure out how finance, the auto industry, the plastic industry, the mining industry, the
technology industry, and the shipping industries, can continue to increase their profits, and we
as nations can continue to incre
ase our GDP. Now, I'm not implying any kind of conspiracy,
and I'm not anti-capitalism or anything like that. I've worked in industry for a long
time and this is what we do. We're always trying to maximize or optimize for profit.
And thirdly, something which Pedro... Well, both Pedro and Simon mentioned, the idea that
greater use of electric vehicles is going to somehow reduce the amount of gasoline produced
and consumed is just absurd. It's an argument- You mean oil or gasoline? Gasoline. T
hat in other words, if everybody's
driving EVs, then we won't need gasoline. And so the point is that, and I think you said it
Nate, is that the only way that happens is if we just stop using oil altogether. Because
there's no way, there's no physical process, by which we can produce the plastics, the
diesel, the bunker fuel, the asphalt, all of the things that all of you people have talked about,
without producing gasoline. It is a necessary and unavoidable byproduct of the refining proces
s.
And depending on where you are, gasoline can be as much as 45% of every barrel of oil, or
it might be less, like 30 or 35%. It doesn't really matter. It's a very large percentage.
And even in the ideal case, where we somehow no longer need very much gasoline for transportation,
what are we going to do with it? Are we going to pour it out into the streets or the fields?
We're still going to produce it. So I think that a lot of the thinking about electric cars is
not very system oriented,
and not very practically oriented, if what we're really trying to do
is resolve the human predicament regarding destroying the ecosystem and the atmosphere
and the climate. So those are my comments. So the bottom line is this energy transition,
first of all, it's a fiction. There really is no energy transition. And all of the solutions, EVs,
renewables, nuclear, hydrogen, carbon capture, the graphic that you'll see, is a sign
that points in one direction, which is lie, and the other is trut
h. And the lie points in
the direction of the EVs and the renewables and the nuclear et cetera, and the truth points in
the direction of less energy. We have to start, we won't, but we should, start thinking about the
real solution to our human predicament is how to use less energy, not to figure out new technology
to continue using what we're already using now. So some of my questions to you now, Art, are
possibly to all three of you, but on that last point, how many people... We're smart
fellows,
but there's lots of smart fellows and ladies listening to this and working on these issues, do
people really believe in what you just said? The EV's, the renewable future. Or is the truth
side of it that we're going to have to use less, and that we've built this monetary musical chairs
system of monetary claims on biophysical energy and material reality, and some of those claims
won't be able to be serviced in the future? Is the real truth too personally and politically
difficult
to state? So it's the equivalent of playing poker with a bad hand, and doubling down
and going all in, because it's too scary to fold that hand, so you have to see it through. Or is
it truly a lack of systems knowledge, on this conversation to today, that is causing governments
and CEOs and other people to avoid these difficult conversations? First of all, what do you
think, Art? And then I'll ask Pedro and Simon. Yeah, I think Simon's four myths really
cover it pretty nicely. I think it's
a psychological problem, that we certainly
as a civilization, a modern civilization, much less a species, we are psychologically
incapable of accepting that there isn't a solution. We don't know what it is. That there
isn't a solution that allows us to continue our present behavior without destroying the planet.
There's an awful lot of human energy devoted to trying to debunk and say, "Well, that's
not really true. I mean, that's all a lie. Actually the planet's fine and we actually need
to
use more fossil fuels and more carbon dioxide, it's a plus. It'll be better for plants and all."
There's that and there's plenty of support for that idea. But I think deep down, on some visceral
level, most people understand that what I do is somehow bad for the planet, and therefore what
I'm being sold, what we are being sold, with EVs, is a very personal way of saying, "Hey, I got a
solution for you to feel better about yourself." But the idea, as Simon carefully stated, somebody,
someho
w is going to figure this out, it's just not going to be me. That's the hope. That's the
great hope. Which I place zero probability in. Simon and Pedro, do you have any follow up? Yeah, just mentioned the psychological problem.
There is a huge psychological problem indeed, because now as you probably know there have been
three days plenary in the European Parliament now about a subject which is called Beyond Growth.
That was the title that was invented to avoid to say degrowth, because degro
wth was too
strong, so they were mentioning Beyond Growth. So after the presentation by Ursula von der Leyen,
and some other irrelevant people in the European Parliament, some people were saying really, really
important things about the problems of the limits to growth. But what is the problem? The problem
is that this was organized by 18 parliamentaries in the European Parliament and they have 750. So
that means that the idea has not yet got into deep into the politicians sector, or into t
he political
sector. For instance, today I have something about the Belgium Prime Minister, Alexander De Croo that
I will transcribe literally. He said about Beyond Growth, they have started to attack the problem of
Beyond Growth or recognizing the limits to growth, and he said, "Sometimes we hear people
saying that the solution could be degrowth, the myth that which could combat climate
change with a strategy of less, less growth, less investment, less consumption,
probably also less job
creation. This will never work. The strategy of less is
completely contrary to our human nature." Probably this is contrary to the human
nature of an economist, which is the one, the most of the people that is governing the
European Union and the United States and the rest of the world, they are economists. They are
not biophysical economists, they are economists, pure economists. And that's the problem we have.
We don't want to realize what we have ahead. Simon or Pedro, do you have questi
ons
or follow up to what Art presented? Bill Clinton was quoted for
saying, "No one ever got elected for telling people what they couldn't do." Now,
the people around me in positions of authority are all under considerable pressure not to
say negative things, or not to say things that might constitute bad news. Like, "We've got
economic trouble coming, or we might be facing a bit more unemployment." Or even little bits
of bad news. They're allergic to hearing that. And that has actually fi
ltered the reality.
I think we've got a bit of column A, bit of column B. On one hand, the people making decisions
don't actually understand the other mechanics of the whole system, because for the last hundred
years they haven't needed to. Someone else does all that and it all just sorts itself out.
The other part is they know there's a problem. For example, the people I've met up with and
talked to in passing are very aware of the financial instability, structural problems in the
European
Union. They're very aware of that. And they're very aware of the financial problems the
United States face and the implications of that. And their approach to all that is, "Stay at your
posts. We've got it sorted. Use your credit card. Hey, look, there's a giraffe. Look away. Look
away." So what I personally feel is the entire green transition has had the effect of tying up
the best and brightest, working on things that aren't actually going to be that useful. Whereas,
the public at large
believes, because such a lot of effort has been put into talking in circles,
that we call that the circular economy. So they believe everything's fine, especially when there
are groups out there saying, "Everything's fine." So what's happening is humanity at large
has been walked to the edge of the pier, and then the veil's going to lift, but the
problem's going to be right in front of us. And our politicians know, I
believe, that that is coming. But what they will do is instead of actually
saying something unpopular and trying to mitigate the risk, and saying something deeply
unpopular, which will destroy their careers, they're going to plead ignorance. Life
goes on. And then when it all happens, they'll say, whoever's in charge at the time
say, "Oh, the previous administration didn't tell us, they left a hell of a mess with poor
policies. And we'll make the hard decisions." And it really has the feel of, it doesn't have
to be this way, but we're being led by lemmings. That
's an unfortunate statement, but
so many people who are so bright, so many good ideas, they're just knocked
off because they're not considered politically correct. There are things
we could do, but they won't do it. Yeah. The circular economy, I think
it was your colleague, Josh Farley, who talked about the circular
firing squad, wasn't it, Nate? Well, they called it something else actually. Yeah. So- Yeah. That too. I don't disagree with you, Simon. But
I think on our first podcast togeth
er we discussed that we currently have a metabolism
of global economy, which is around 19 terawatts, continuously. And that something in
tandem, with hopefully very little coal, but with our remaining natural gas and
depleting oil, in tandem with solar, wind, geothermal, hydro, nuclear, something could
be maybe 10 terawatts. Maybe less, maybe more. If we got organized. If we got organized.
Well, around that. Yeah, if we did the right thing and we did a disciplined work and
reconstruction ov
er several decades. So, that's unlikely to happen, but just
conceptually. But in that situation, let me just ask any of you, is there a role
for electric vehicles in a degrowth - and you all know that I don't think we're going to
degrow, I think that's a nice conception idea, but post-growth is what we're going to have to
do. We won't politically choose to use less, but we will be faced with that end of pier
moment, probably in the not too distant future. But in a degrowth scenario where we
have a shrinking economy, but we still have factories and stability and a reduced global
trade, but still some global trade, what role would EVs have? Or is EVs a mania phase right
now in this blow off top of the carbon pulse? I think, Nate, that to be, from a very
high level, I think it's fair to say that EVs are a more efficient use of fossil fuels
than other forms of transportation. Now, there's a million disclaimers and problems with that
statement, but I just say at a very high level
. So once we actually get to having
invested in and produced the EV, there is in fact less pollution from it.
And not withstanding the comments that both Pedro and Simon have made, the Balearic
Islands and the Canaries, they're EVs, but running off of dirty hydrocarbons,
potentially EVs are a part of the solution. I don't think there's any question about that.
Even if there are questions about that, it doesn't matter, because we're going in that
direction, like it or not. But I come back. 8
% of global emissions are from passenger
vehicles. This is not the most important part of the problem to address. That doesn't mean
it should not be addressed. 8% is a lot, but what about the other 92%? And I'll just finish this
comment by reiterating what I said before a little bit, in that is Vaclav Smil has very succinctly
summed it up. Our modern civilization rests upon four things, all of which require fossil fuels.
They are steel, cement, plastic, and ammonia fertilizer. This civiliza
tion cannot stand without
those four things. And so the answer to your question, Nate, is what part of those four pillars
of civilization do electric vehicles solve? Right. Well, to use Pedro's analogy, you just
described building the house from the ground up, instead of from the roof down. Here's a
question. Each of you give a brief answer, irrespective of the analysis you just gave on EVs and how sustainable they are, and how
many materials, et cetera, can you speculate on what will happe
n, disregarding this conversation?
What is going to happen with EVs and ICEs such, in the coming decade or so? Can you
make a speculation? Start with Art? Well, I've done a lot of analysis of what modelers
say, and they include the US Department of Energy, the International Energy Agency, BP, Shell,
et cetera, et cetera, et cetera. And in all of their most likely scenarios,
EVs will account for something like 12 to 20% of total vehicles by 2050.
And you can look at their more hopeful scenar
ios, their less hopeful scenarios. I think I'm
not endorsing those projections because all projections are wrong, but I celebrate
the people that are willing to put them out there. But let's just take the EIA and IEAs 12%,
okay, let's double it. Let's just say they're way conservative. Okay? So 25% of vehicles will
be EVs by 2050. Let's triple it and say 36%. And now we're starting to get close
to Europe's objective, according to Simon of 30%, except that's by 2030. All right?
So, these guy
s, you can criticize them all you want, but they're not idiots and I think their
projections are notionally realistic. So the answer to your question is, it seems improbable to
me, regardless of laws, regulations, guidelines, that EVs are going to make a big difference
in, let's just say, our four lifetimes, which as Simon's pointed out, if we can't
do it by then, I think we're too late. Pedro. Here in Spain, the official program is, the idea
is to have about five million electric vehicles
by 2030. This is the five years, seven years
term, close to what you have asked for. This is at the time they have met 3% of that target. So
it's from the five million vehicles out of the 25 we have now running on the streets, and roads, we
are now 3% of the committed target for 2030. It's very difficult to believe that they are going
to reach the five million. So we are talking in the same ballpark that Art has mentioned
in percentage, shown by 250 from the IEA, or International Energy Age
ncy, or something
like that. So I don't think they are going to make such a big difference with the existing today
figures. They are not going to make it on time. Real quickly, in Norway, nine
out of every 10 new cars sold are electric vehicles. Why is that so
different? And why is that relevant? Because they are a very, very rich country, which
has a lot of hydro-electricity. Very rich country with a big hydroelectricity generation, which
is accounting probably 80%. I don't know the figur
es by memory, but it is about 80, 90% of
those electricity, which is in surplus because they are exporting to Germany. Sometimes
they are coming from hydro. So that's why, because the salary in Norway and in Sweden is
three, four times the one of Spain, so it's not the same case. This cannot be extrapolated
to Mauritania or to Congo, or whatever. And I would point out the basis of
that wealth is oil from the North Sea. Yep. Right. Okay. Simon, A answer this question
and then I have two mor
e questions for all of you. Okay. Also, Scandinavia is very good thinking
long term, much more so than any other nation I've come across. So how I see this is actually
most production for all the components for EVs, and in fact, technology in general, happens
in Southeast Asia, China in particular. Now, we are squaring up to go into a conflict
with the two countries that we are dependent on for raw materials, but also manufacturing of
all kinds. China in particular is going to be a problem.
I can see a situation where
the market is about to go inelastic. So China controls a lot of the mining, they also
control a lot of the smelting, and to hit these targets for themselves, they're probably going
to keep all those materials for themselves, because they themselves have targets
that they've got to hit as well, and maybe they're not that interested in helping us.
I believe we're going to see an inelastic market, and there'll be some electric vehicles available,
not nearly enough
for the amount that we want. There'll be some hydrogen fuel cell vehicles,
but not nearly enough. I think what we're going to see is the transport fleet is just going
to collapse in size, and it's going to be in an environment of market collapse, there's
going to be like a fiscal reform happening, our money systems are probably going to undergo
some sort of transformation. How, I don't know, but it's all not going to happen smoothly at
all. So while internal combustion engines are phasing
out, I can see a situation where
we'll have less renewable based technology as well. And so society will go through
de-growth, or post growth, if you like, the hard way. In a way that's not planned,
in a bandaid on a bullet wound kind of way. Yeah, I concur with that. Two more questions,
gentlemen. What about, since we're talking about EVs, EV scaling is one of the reasons that
a lot of people, economists, think tanks, are projecting peak demand. That we won't need
oil anymore, because we'
re going to replace things with electric versions of it. I can anticipate
what you might think about that, since we've shared hundreds or thousands of emails on the
topic, but if each of you could just give a short rebuttal or a commentary on the concept,
that oil isn't going to peak and decline because we're running out of it and it's
getting harder to extract and more costly, but in fact because humans will not want to use
it anymore. Who wants to start? Pedro? Pedro. I have heard recentl
y that James Stoltenberg,
which is the Secretary General of NATO, has even mentioned the need of the armies to electrify as
much as possible, or to become more ecological. Which is sort of a joke, because if you think in
the armies now, if you see the war in Ukraine, from both the Russian side and the NATO side
in the Ukrainian land, then it's a joke. How many vehicles, how many systems, motorized
mobilization of the armies is being made by electric means? I mean nothing. It's just
nothing
. Everything is fossil fuel power. This is not going to work. The only electric things
that working in that war, in that horrible war, are some short range electric drones, which are
just to move one kilometer away, because the long range in drones are also fossil fuel power.
So it's not going to work. This is a joke, what they are mentioning, and this is armed
forces. But then look at the merchant fleet or the fishing fleet, or whatever it is. It's
no way that they are going to change this
. Let me talk about oil a little bit. Whenever
I read the news every day in the morning, the projections are always for increasing
demand for oil. No matter who makes it, it's an assumption. Population's growing, therefore
we're going to continue to use more energy. The correlation between GDP and energy
consumption, as most people know, is like 99%. And since we have to grow the economy, then therefore
we're going to continue to increase energy demand, and a lot of that is oil. But that's
not what
the data's telling us. So world consumption of refined products, mostly transport fuels, has not
recovered to where it was in Simon's benchmark year of 2019. Why not? We can speculate and argue
about it, but it simply hasn't. And so there's something else going on here, and I suspect that
it has a lot to do with the financial pressure that individuals are under. That people are
scaling back where they can, and where I can scale back on my spending is on my personal car use. I
can
drive less more easily than I can consume less electricity, or that I can order from Amazon less.
So that's one part of it. The other thing is- So on that part, peak demand equals peak
affordability, in some ways, on that point. Yeah, exactly. Well said, Nate. The
other thing I'll bring up here is, as my friends know, I finally finished
War and Peace about 10 years ago, and Tolstoy spends a lot of time taking you
behind the scenes, the Prussians and the Russians planning the Battle of Auste
rlitz, and
all of the people that they've hired to help them with strategy. And Tolstoy shows you again and
again that all the strategy going into a battle ends the moment that the firing begins, and it's
every man for himself. It's about my survival. And so I think all four of us can be somewhat
critical of the planning that is being done towards our global predicament. But what there
has been is what we're talking about today, and it has to do with carbon goals. And I
suspect that an awf
ul lot of that wonderful, idealistic strategizing, when Napoleon's troops
come out of the fog, there's a lot Russians that are going to turn around and run the other way.
And I don't mean... I'm not talking specifically, I'm talking about the battles he
described. So once the firing starts, I think a lot of this planning is just going to,
it's going to blow up. It's going to evaporate. Simon, peak demand. Well said. Right, so, I've been hearing a
lot about phasing out fossil fuel systems th
rough economic efficiency. And everything I've
seen so far has not been tethered to reality. It's just not. Like the people involved are not
accounting for the mechanical, logistical steps involved with that. Every passing year, we've
actually demanded more fossil fuels. And yes, we brought on renewable systems, but what we've
brought on has been overrun by economic growth. And so underneath those renewable
systems, all fossil fuels have increased. So I don't think we'll willingly do it.
W
hat might happen is, not peak demand, but peak affordability is actually a nice way to
put it. I think we're going to run out of money, and we're just not going to be prepared
to pay for those systems anymore, because we'll have other priorities like food.
There's a rising tide of costs across the board for all levels of society. It's not just
people, but it's for corporations as well. You did some very nice work to show that
the tight oil sector in the United States needs to have continuou
s drilling, and
needs upfront capital to do that. And there was a period of time where they
just weren't putting that capital in. And I'm not sure, have they actually
sorted that out? Because it seems like- No. Yeah, so they're forcing the issue, but
they're actually sweating the deposit in an inefficient way for short term gain. This
is the old bandaid on a bullet wound. And so, the implications of not putting upfront capital
where it's needed most to managing our resources correctly, in
exchange for knee-jerk reactions
for short term solutions. We run out of money and then that telescopes to everything else, and
it all grinds to a halt all at the same time. So it's not peak demand, it's a peak affordability
for all levels of society at the same time. And I would add, Simon, that it's
not for lack of oil reserves. We can argue about terminal depletion, but
we're not anywhere close to that yet. These are conscious decisions that are being made
by oil companies, private, or
I'm sorry, public companies, not national companies, in
response to what the market is telling them they want. So back to one of Nate's perennial points
is we've abdicated everything to the financial structure. Somehow those guys are in charge, and
so it's not that oil companies are ignorant to the fact that they need to invest more, it's that
they got hammered by shareholders for reinvesting, and so they're not doing it anymore
because the investors fled from them. Same thing's happening i
n mining. Yeah. I'll have to have you
guys back. We're good friends. Cool. We think a lot a alike. Yeah. Love it. And there's many, many topics to cover. Let me
ask you each a question, please answer it as succinctly as you can. I think it's going to be
a difficult question to answer on this particular topic, but I would like to personally make it a
habit of me asking this question on every podcast of this format, how could what you all presented
be wrong? How could you be wrong about what
you just laid out here in the logic? Or is
there zero chance that you're wrong? I'll take that one first. Simon, go ahead. Okay, so what has to happen, there's two sides
to the equation. There is what energy source do we use, to deliver electricity and heat? And then
there's the technology systems we are to use that stuff, like our cars, our EVs, our whatever, and
our industrialization is across that spectrum. What has to happen is one of those sectors,
every single sector has a logistical
bottleneck, every single one of them. What if something
radical happened to cause one of them to evolve? And it evolved in a way according to a
set of rules like we've never seen before. And so this is someone will think up something,
but what if someone develops a technology that doesn't take years to build, and can be
telescoped out to everyone on the planet, and can be developed quickly?
I think it's unlikely, but if the apple cart is upset,
it'll come from that direction. Pedro. Well,
I've been wrong many times. In September,
2001 when I saw the bombing of the Twin Towers, I thought with a friend that I was working
in that moment in intercommunication sector, and I thought this implies a change of
paradigm, and it was a change in paradigm. Then in 2002 and 2003, I joined ASPO and then
we were thinking that probably the peak oil could happen somehow, even the peak oil of
the conventional oil would be around 2010. We didn't miss so much, but we were very much
criticized a
nd we were wrong. Probably it was not 2010, it was 2012. But I can be wrong in
many ways. But I think I am right in one thing. The giant of this societal structure, organized
and led mostly by capitalism, is a monster. And as every monster, it lasts a long time to fall down.
My only wrong approach, it could be in the time of seeing the giant falling down. Probably it will
last a little bit more to fall down than I expect, but in no doubt, I think sooner than later the
system will collapse.
So let's hope that if it collapse, we can prepare ourselves better for the
future in knowing that this is going to happen. I will repeat what both have said. I am wrong lots
of times, and so I can see, for instance, on the gasoline issue that I brought up, okay, we have
technology that can reform any kind of hydrogen and carbon in such a way that we can take gasoline
and turn it into diesel, or turn it into just about anything we want. It's technically possible.
The scaling of that is the re
ason that I say what I do, and not to mention the cost. So I
could be wrong about that, but I think that what is unlikely to be wrong is the state of the
ecosystem and the planet. We have data to tell us that the population of animals has declined by 69%
since 1970. Okay? That's not speculative. Well, there's probably some uncertainty in that number,
but it's a huge number. We cannot dispute, or I cannot dispute, the fact that we're undergoing
problems with our oceans, and pollution, at rat
es that are somewhere
between appalling and terrifying. So, the momentum of all of that is so
strong, that wherever I am wrong in the specifics of what I've discussed today, even if
somebody can turn that around, as Simon said, overnight, it takes a long, long time to slow the
momentum of biophysical destruction. And again, my point is not to be a doomer, or anything,
it's just to say that's not wrong. And so if EVs are part of the solution to the future, and
they're a bigger part of the s
olution, then I'm assuming I'm willing to be wrong about that.
But I'm going to ask somebody to show me, tangibly, how that can affect where we're going
as a planet. And I don't mean to be a tree hugger here, I mean that in order for us to prosper as
humans, we have to have a functional ecosystem. This has been great. Seriously, thank you
guys for your time today. Thank you for your selfless work on these issues, and I'm sure
we'll probably exchange emails later in the day. And enjoy the res
t of the day, thanks for
being part of Reality Round Table Number One. Thanks for making it happen, Nate. Thank you very much. I've learned a lot from you
guys. I really appreciate- Likewise.
... your presence. Thanks, you too, Simon. If you enjoyed, or learned from this
episode of the Great Simplification, please subscribe to us on your
favorite podcast platform and visit thegreatsimplification.com for
more information on future releases.
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