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  • Translator: Jenny Zurawell Reviewer: Morton Bast

  • America's public energy conversation

  • boils down to this question:

  • Would you rather die of A) oil wars,

  • or B) climate change,

  • or C) nuclear holocaust,

  • or D) all of the above?

  • Oh, I missed one: or E) none of the above?

  • That's the one we're not normally offered.

  • What if we could make energy do our work

  • without working our undoing?

  • Could we have fuel without fear?

  • Could we reinvent fire?

  • You see, fire made us human;

  • fossil fuels made us modern.

  • But now we need a new fire

  • that makes us safe, secure, healthy and durable.

  • Let's see how.

  • Four-fifths of the world's energy

  • still comes from burning each year

  • four cubic miles of the rotted remains

  • of primeval swamp goo.

  • Those fossil fuels

  • have built our civilization.

  • They've created our wealth.

  • They've enriched the lives of billions.

  • But they also have rising costs

  • to our security, economy, health and environment

  • that are starting to erode, if not outweigh their benefits.

  • So we need a new fire.

  • And switching from the old fire to the new fire

  • means changing two big stories about oil and electricity,

  • each of which puts two-fifths of the fossil carbon in the air.

  • But they're really quite distinct.

  • Less than one percent of our electricity is made from oil --

  • although almost half is made from coal.

  • Their uses are quite concentrated.

  • Three-fourths of our oil fuel is transportation.

  • Three-fourths of our electricity powers buildings.

  • And the rest of both runs factories.

  • So very efficient vehicles, buildings and factories

  • save oil and coal,

  • and also natural gas that can displace both of them.

  • But today's energy system is not just inefficient,

  • it is also disconnected,

  • aging, dirty and insecure.

  • So it needs refurbishment.

  • By 2050 though, it could become efficient,

  • connected and distributed

  • with elegantly frugal

  • autos, factories and buildings

  • all relying on a modern, secure

  • and resilient electricity system.

  • We can eliminate our addiction to oil and coal by 2050

  • and use one-third less natural gas

  • while switching to efficient use

  • and renewable supply.

  • This could cost, by 2050,

  • five trillion dollars less in net present value,

  • that is expressed as a lump sum today,

  • than business as usual --

  • assuming that carbon emissions

  • and all other hidden or external costs are worth zero --

  • a conservatively low estimate.

  • Yet this cheaper energy system

  • could support 158 percent bigger U.S. economy

  • all without needing oil or coal,

  • or for that matter nuclear energy.

  • Moreover, this transition needs no new inventions

  • and no acts of Congress

  • and no new federal taxes, mandate subsidies or laws

  • and running Washington gridlock.

  • Let me say that again.

  • I'm going to tell you how to get the United States

  • completely off oil and coal, five trillion dollars cheaper

  • with no act of Congress

  • led by business for profit.

  • In other words, we're going to use our most effective institutions --

  • private enterprise co-evolving with civil society

  • and sped by military innovation

  • to go around our least effective institutions.

  • And whether you care most

  • about profits and jobs and competitive advantage

  • or national security, or environmental stewardship

  • and climate protection and public health,

  • reinventing fire makes sense and makes money.

  • General Eisenhower reputedly said

  • that enlarging the boundaries of a tough problem

  • makes it soluble by encompassing more options and more synergies.

  • So in reinventing fire,

  • we integrated all four sectors that use energy --

  • transportation, buildings, industry and electricity --

  • and we integrated four kinds of innovation,

  • not just technology and policy,

  • but also design and business strategy.

  • Those combinations yield

  • very much more than the sum of the parts,

  • especially in creating deeply disruptive business opportunities.

  • Oil costs our economy two billion dollars a day,

  • plus another four billion dollars a day

  • in hidden economic and military costs,

  • raising its total cost to over a sixth of GDP.

  • Our mobility fuel goes three-fifths to automobiles.

  • So let's start by making autos oil free.

  • Two-thirds of the energy it takes to move a typical car

  • is caused by its weight.

  • And every unit of energy you save at the wheels,

  • by taking out weight or drag,

  • saves seven units in the tank,

  • because you don't have to waste six units

  • getting the energy to the wheels.

  • Unfortunately, over the past quarter century,

  • epidemic obesity has made our two-ton steel cars

  • gain weight twice as fast as we have.

  • But today, ultralight, ultrastrong materials,

  • like carbon fiber composites,

  • can make dramatic weight savings snowball

  • and can make cars simpler and cheaper to build.

  • Lighter and more slippery autos

  • need less force to move them,

  • so their engines get smaller.

  • Indeed, that sort of vehicle fitness

  • then makes electric propulsion affordable

  • because the batteries or fuel cells

  • also get smaller and lighter and cheaper.

  • So sticker prices will ultimately fall to about the same as today,

  • while the driving cost, even from the start,

  • is very much lower.

  • So these innovations together can transform automakers

  • from wringing tiny savings

  • out of Victorian engine and seal-stamping technologies

  • to the steeply falling costs

  • of three linked innovations that strongly reenforce each other --

  • namely ultralight materials, making them into structures

  • and electric propulsion.

  • The sales can grow and the prices fall even faster

  • with temporary feebates,

  • that is rebates for efficient new autos

  • paid for by fees on inefficient ones.

  • And just in the first two years

  • the biggest of Europe's five feebate programs

  • has tripled the speed of improving automotive efficiency.

  • The resulting shift to electric autos

  • is going to be as game-changing

  • as shifting from typewriters to the gains in computers.

  • Of course, computers and electronics

  • are now America's biggest industry,

  • while typewriter makers have vanished.

  • So vehicle fitness

  • opens a new automotive competitive strategy

  • that can double the oil savings over the next 40 years,

  • but then also make electrification affordable,

  • and that displaces the rest of the oil.

  • America could lead this next automotive revolution.

  • Currently the leader is Germany.

  • Last year, Volkswagen announced

  • that by next year they'll be producing

  • this carbon fiber plugin hybrid

  • getting 230 miles a gallon.

  • Also last year, BMW announced

  • this carbon fiber electric car,

  • they said that its carbon fiber is paid for

  • by needing fewer batteries.

  • And they said, "We do not intend to be a typewriter maker."

  • Audi claimed it's going to beat them both by a year.

  • Seven years ago, an even faster and cheaper

  • American manufacturing technology

  • was used to make this little carbon fiber test part,

  • which doubles as a carbon cap.

  • (Laughter)

  • In one minute -- and you can tell from the sound

  • how immensely stiff and strong it is.

  • Don't worry about dropping it, it's tougher than titanium.

  • Tom Friedman actually whacked it as hard as he could with a sledgehammer

  • without even scuffing it.

  • But such manufacturing techniques

  • can scale to automotive speed and cost

  • with aerospace performance.

  • They can save four-fifths of the capital needed to make autos.

  • They can save lives

  • because this stuff can absorb

  • up to 12 times as much crash energy per pound as steel.

  • If we made all of our autos this way,

  • it would save oil equivalent to finding

  • one and a half Saudi Arabias, or half an OPEC,

  • by drilling in the Detroit formation, a very prospective play.

  • And all those mega-barrels under Detroit

  • cost an average of 18 bucks a barrel.

  • They are all-American, carbon-free

  • and inexhaustible.

  • The same physics and the same business logic

  • also apply to big vehicles.

  • In the five years ending with 2010,

  • Walmart saved 60 percent of the fuel per ton-mile

  • in its giant fleet of heavy trucks

  • through better logistics and design.

  • But just the technological savings in heavy trucks

  • can get to two-thirds.

  • And combined with triple to quintuple efficiency airplanes,

  • now on the drawing board,

  • can save close to a trillion dollars.

  • Also today's military revolution in energy efficiency

  • is going to speed up all of these civilian advances

  • in much the same way that military R&D

  • has given us the Internet, the Global Positioning System

  • and the jet engine and microchip industries.

  • As we design and build vehicles better,

  • we can also use them smarter

  • by harnessing four powerful techniques

  • for eliminating needless driving.

  • Instead of just seeing the travel grow,

  • we can use innovative pricing,

  • charging for road infrastructure by the mile, not by the gallon.

  • We can use some smart IT to enhance transit

  • and enable car sharing and ride sharing.

  • We can allow smart and lucrative growth models

  • that help people already be near where they want to be,

  • so they don't need to go somewhere else.

  • And we can use smart IT

  • to make traffic free-flowing.

  • Together, those things can give us the same or better access

  • with 46 to 84 percent less driving,

  • saving another 0.4 trillion dollars,

  • plus 0.3 trillion dollars from using trucks more productively.

  • So 40 years hence, when you add it all up,

  • a far more mobile U.S. economy

  • can use no oil.

  • Saving or displacing barrels for 25 bucks

  • rather than buying them for over a hundred,

  • adds up to a $4 trillion net saving

  • counting all the hidden costs at zero.

  • So to get mobility without oil,

  • to phase out the oil,

  • we can get efficient and then switch fuels.

  • Those 125 to 240 mile-per-gallon-equivalent autos

  • can use any mixture of hydrogen fuel cells,

  • electricity and advanced biofuels.

  • The trucks and planes can realistically use

  • hydrogen or advanced biofuels.

  • The trucks could even use natural gas.

  • But no vehicles will need oil.

  • And the most biofuel we might need,

  • just three million barrels a day,

  • can be made two-thirds from waste

  • without displacing any cropland

  • and without harming soil or climate.

  • Our team speeds up these kinds of oil savings

  • by what we call "institutional acupuncture."

  • We figure out where the business logic

  • is congested and not flowing properly,

  • we stick little needles in it to get it flowing,

  • working with partners like Ford and Walmart and the Pentagon.

  • And the long transition is already well under way.

  • In fact, three years ago mainstream analysts were starting to see peak oil,

  • not in supply, but in demand.

  • And Deutsche Bank even said world oil use could peak around 2016.

  • In other words, oil is getting uncompetitive even at low prices

  • before it becomes unavailable even at high prices.

  • But the electrified vehicles

  • don't need to burden the electricity grid.