One of the best books I have read in recent years is the Steve Jobs biography by Walter Isaacson. It’s also a great management book, although I don’t think that it was really intended for that purpose. In discussing Jobs’ approach to life and business management, Isaacson goes to some length to describe the concept of a Reality Distortion Field (RDF), a tool used on many occasions by Jobs to inspire progress and even bet the company on a given outcome. The RDF was said to be Steve Jobs’ ability to convince himself and others to believe almost anything with a mix of charm, charisma, bravado, hyperbole, marketing, appeasement and persistence. RDF was said to distort an audience’s sense of proportion and scales of difficulties and made them believe that the task at hand was possible. This also seems to be the case with a number of renewable energy, but most notably the Solar PV, advocates.
The Talosians from Star Trek were the first aficionados of the RFD
It is always with interest that I open the periodic e-mail from fellow Australian Paul Gilding and read the latest post from him in The Cockatoo Chronicles. But this time, the full force of the Renewables Distortion Field hit me. Gilding claims that;
I think it’s time to call it. Renewables and associated storage, transport and digital technologies are so rapidly disrupting whole industries’ business models they are pushing the fossil fuel industry towards inevitable collapse. Some of you will struggle with that statement. Most people accept the idea that fossil fuels are all powerful – that the industry controls governments and it will take many decades to force them out of our economy. Fortunately, the fossil fuel industry suffers the same delusion. In fact, probably the main benefit of the US shale gas and oil “revolution” is that it’s keeping the fossil fuel industry and it’s cheer squad distracted while renewables, electric cars and associated technologies build the momentum needed to make their takeover unstoppable – even by the most powerful industry in the world.
My immediate approach to dealing with a statement like this plays into the next paragraph by Gilding, where he says;
How could they miss something so profound? One thing I’ve learnt from decades inside boardrooms, is that, by and large, oil, coal and gas companies live in an analytical bubble, deluded about their immortality and firm in their beliefs that “renewables are decades away from competing” and “we are so cheap and dominant the economy depends on us” and “change will come, but not on my watch”. Dream on boys.
But the energy system is about numbers and analysis, like it or not. Perhaps Gilding needs to at least look in his own back yard before reaching out for global distortion. In a number of posts over the last year or two he was waxed lyrical about the disruption in Australia and consequent shift in its energy mix. Yet the latest International Energy Agency data on Australia shows that fossil fuel use is continuing to rise even as residential solar PV is becoming a domestic “must have”. There is no escaping these numbers!
It is true that solar PV is starting to have an impact on the global energy mix and that at least in some countries the electricity utilities are playing catch-up. But the global shift will likely take decades, even at extraordinary rates of deployment by historical standards. The Shell Oceans scenario portrays such a shift, with solar deployment over the next 20 years bringing it to the level of the global coal industry in 1990 and then in the 30 years from 2030 to 2060 the rate of expansion far exceeds the rate of coal growth we have seen from 1990-2020 (see chart).
I would argue that this is a disruptive change, but it still takes all of this century to profoundly impact the energy mix. Even then, there remains a sizable oil, gas and coal industry, although not on the scale of today. Of course this is but one scenario for the course of the global energy system, but it at least aligns in concept with the aspirations of Paul Gilding. I don’t imagine he would be particularly impressed by our Mountains scenario!!
Many will of course argue that the proof of the RDF is in the Apple share price and its phenomenal success. But this didn’t come immediately. Apple and Jobs had more ups and downs than even the most ardent follower would wish for, with the company teetering on the brink more than once (read the Isaacson account). But it persisted and nearly forty years on it is a global behemoth. However, forty years isn’t exactly overnight and IT change seems to take place at about twice the rate of energy system change. Does that mean new energy companies won’t become global super-majors until much later this century?
David, imagine the world your children will grow old in and you grand children will be facing when they are your age if we allow hydrocarbons to continue to grow and “dominate” beyond the next couple of decades (which is my interpretation of your comments).
It seems that you are in denial that the hydrocarbon energy paradigm must end with a decline to near-zero by 2035-2045 if your progeny and mine would have a survivable climate.
I dare suggest that Shell, ExxonMobil, BP, Chevron and all of your colleagues around the world put the brakes on development and squash the accelerator “pedal to the metal” on a plan to retire and dismantle about 3 refineries each month for the duration, and that the money that would have been spent developing and producing extreme carbon deposits be channeled into renewable energy technology research and development without hesitation.
The pressure to expand efficiency, wind, solar or whatever percolates to the top will force the “buckshot” of solutions to fill the demand-supply gaps.
We have got to put appropriate pressure to bear if we want to prevail over a 4°C – 6°C future, don’t you agree, David?
You have taken a look at http://bit.ly/WBGU-2009 haven’t you? Download the paper (PDF) at http://bit.ly/WBGU2009 and read it if you haven’t already, please! If there is a remote chance there is any validity to this, you will know what you must do: facilitate a meeting of Ben van Beurden, Rex Tillerson, Bob Dudley, John Watson et al with the goal of agreeing in concept to an end-certain retirement schedule for global refinery capacity to near zero during the next two decades, beginning this year.
Pick one refinery and shut it down. Then another, and another and another — three per month. If you can’t fathom that, we need to talk. You have my email address.
It will be interesting to read what ExxonMobil has to say in their impending report.
Renewable Energy World http://bit.ly/Exxon21Mar just reported “ExxonMobil Acknowledges Climate Change to Shareholders”:
“ExxonMobil … has agreed to release a Carbon Asset Risk report by the end of the month. The Carbon Asset Risk report would purportedly describe how ExxonMobil assesses the risk of stranded assets from climate change.”
Maybe they finally get it. Holding my breath to read the report.
As always you write well and make thoughtful comments. A Renewables Distortion Field is a good phrase and I may well adopt it. It explains well the idea of such a dramatic change. Apple is an excellent example and that will be replicated in this area in my opinion with all the ups and downs, and market chaos. Witness for example huge collapses in value for various solar companies (and huge rises for others) as we go through massive growth in that area.
I will give some more thought and may write more in response, but the fundamental question, which we’ve discussed before, is, if may borrow your idea – Shell’s Reality Distortion Field. You can’t imagine how the change can occur within your paradigm (deployment rates etc) – but then you go to your next thought which is “therefore society won’t change”. This ignores the science that says this means a 3 – 4 degree world or worse, which will in turn crash the economy and probably society. I don’t believe we will (or morally can) stand by and allow that to happen, so there’s no choice but to achieve the change I’m writing about. What does that mean for Shell? That’s yours to answer.
Of course there’s also my point you quote as well (thank you) that you can’t see it. I would say, as others couldn’t see how Apple could possibility succeed (and would have had data to “prove it”) yet it has and reshaped industries. Thus it will be here.
Good news is we’ll both be alive to find out the answer!
Thanks for the response. You have highlighted one issue that I know troubles our scenario team; how to model changes in society as a result of the changing climate itself. As you know both the current scenarios overshoot 2 degrees, despite both reaching net zero emissions by the end of the century – thereby at least capping the problem to some extent. But the change in climate linked with these isn’t really modelled in terms of societal change – but not because the team didn’t want to or didn’t think it would have much impact. The challenge was always how and to what extent should it be included. Work continues in this area.
The second issue is the rate of energy system change, which despite any RDF that might exist in Shell, has been the subject of a great deal of work and analysis. You really should do a “back of the envelope” look at the solar deployment rate in Oceans, I think you will be quite surprised.
Good post, thanks. I have queued the 12MB New Lens Scenario for download when we get access to some free WiFi (we’re on our yacht in NZ, only option being expensive cellular data).
I apologize if my questions can be answered by simply searching your scenarios. I did search your blog, but didn’t find relevant commentary.
Q1: How has Shell priced the grid stabilization costs implied by ~38% solar + 8% wind = 46% non-dispatchable?
Q2: Have you a comment on the 2013 Potsdam analysis “System LCOE: What are the Costs of Variable Renewables?”? Their work supports the conclusion that RE penetration above around 25% will be painful. See
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