New energy sources have always been developed to meet burgeoning demand. The belief in human ingenuity and progress generates the concept of “the bottomless well.”
One of the best technology books I’ve read recently is “The Bottomless Well: The Twilight of Fuel, the Virtue of Waste, and Why We Will Never Run Out of Energy,” by Peter Huber and Mark Mills. It emphasizes that as humanity advances, more and more energy, not just oil, will come inevitably from the “bottomless well” of technology innovation. Energy supply will always outpace demand.
More efficient cars, engines and light bulbs will never lower demand; instead, they increase it. The demand for energy can only go up. Why? Because cheaper and better products stimulate demand and increase total energy usage. It signals progress, and energy usage is simply a cheap byproduct.
Most of what we think of as “energy waste” is actually beneficial. As energy becomes more “ordered,” more waste is inevitable and energy price really doesn’t matter very much. The more advanced energy usage becomes the more productive, and the cost of the energy involved in its production is irrelevant. For example, laser energy is precise, focused, or “ordered” energy, which is far more valuable than the energy that is used by the power supply that produces it.
Today, oil is not the dominant fuel of our modern economy; it supplies about 40 percent of raw energy consumed and is used mainly for automobiles and transportation. Coal, uranium, gas and hydroelectric power supply the other 60 percent. By far the most important use of non-oil fuel is to produce electricity to power almost everything else.
It is clear that electricity, not oil, defines the fast-expanding center of the energy economy. About 60 percent of the U.S. gross domestic product (GDP) now comes from industries and services that run on electricity. All the fastest growth sectors of the econ-omy, like info-tech and telecom, depend totally on electricity.
Electricity has met more than 85 percent of the growth in U.S. energy demand over the past 25 years. Moreover, electrification is accelerating. Almost everywhere, electrically powered equipment is steadily displacing equipment powered by other forms of energy—because electrical equipment is far more precise and ultimately cheaper. Expanding energy supplies mean higher productivity, more jobs, and a growing GDP. Across the board, energy is not the problem; it’s the solution.
In the automotive sector, gas prices will matter less and less. This statement seems strange, even paradoxical, in the midst of recent escalating gas prices. During the next decade, new designs of hybrid engines will likely lead increasingly to cars propelled by the coal-fired (and nuclear-generated) grid, with much less oil-based fuel consumption.
As technology advances, the automobile will transform steadily into a sort of giant electrical appliance—not just for its fuel efficiency, but because the new electrical drive trains offer much better performance, lower cost, and less weight. Within a decade, we will be shifting more and more of a typical driver’s most fuel-hungry miles from the gas tank to the grid.
The upshot is we’ll be far less sensitive to the cost of raw fuel than we used to be. We are witnessing the economic twilight of fuel. The quality and cost of the engineered hardware—and the results delivered—matters far more. As energy becomes more “ordered” and more productive, its cost becomes less significant.