Vinod Khosla - Give Him Your Ideas
Posted by Robert Rapier on July 27, 2006 - 8:50pm
Topic: Policy/Politics
Tags: alternative energy, sustainability, vinod khosla [list all tags]
Therein lies the opportunity. I know what I plan to say to him. I have already sent him some indication of my intentions, and I have prepared talking points. One of the things that we will discuss is alternative transportation solutions. As I was making up my talking points on alternatives, I thought "What have I forgotten?" I then remembered Alan's crusades for light rail. I started to sum up the pros and cons, but realized that I don't know enough about it. That's when I thought "I need to hear from TOD readers."
So, if you are interested in getting an idea to Mr. Khosla, here is the opportunity. Please present a better alternative than ethanol, and a brief synopsis of the idea. You might briefly list pros and cons, and by all means let's discuss in this thread. I am going to filter through and try to present him with what I believe is the cream of the crop. However, I will also send him a link to this thread. This may be your big opportunity. I know that he favors a carbon tax, as do I. One of the things I plan on discussing with him is the best way to implement a politically palatable carbon tax. I plan to talk about solar, wind, and biodiesel. But I can't cover the entire spectrum of ideas without input from the well-rounded group that makes up TOD.
I understand that people will have greatly differing opinions. There are those who would be against any solution that does not involve putting a stop to suburban sprawl. There are those whose primary concern is affordable transportation, who couldn't care less about suburban sprawl. But let's keep it clean and respectful. There is a good chance Mr. Khosla or some of his associates may read this thread.
I will update TOD readers after I speak with him.
Update [2006-7-28 20:11:45 by Stuart Staniford]:
So by the time I got to this thread there were 249 comments and still rising. Thus I had no choice but to abuse my editorial privileges and tack my comment onto the end of Robert's story. Something we don't talk about much but that I've been thinking about a lot lately is the role of the Internet in all of this. Besides being the most important development in human culture since the printing press, I think the ongoing Internet revolution has tremendous potential to help alleviate peak oil. Since around 2/3 of US oil usage is for transportation, anything that improves the ability of people to work together remotely can soften the blow. Most Internet technologies help in some way, but an area that seems particularly important to me is that the telepresence experience of computers still sucks. Video-conferences with no eye contact don't work very well. We need better cheap video cameras with wider angle and more pixels (and preferably in pairs for stereoscopic). We need software post-processing of the video image to fix the eye direction, and/or different/better technology to pick up body language. Working collaboratively on documents is much more difficult than it should be. Can we please get a proper global distributed file system already? Can we have lots of little super-cheap video cameras that sit around conference rooms and hallways and allow two people to stay in contact as they walk around their respective offices and workplaces via mobile screens (without it being an up-the-nose shot?) Oh, and I love my 30" Apple screen, but I'd like it to be even bigger - but it has to curve to get any bigger than it is - ultimately it could be a super-lightweight semicircular thing that wraps around 180 degrees and sits on my U shaped desk as I swivel (with, say, four mounted video cameras for full body-language resolution).
Then when when we're stuck at home because we can't afford the ethanol to get to work, at least we'll have excellent toys to distract us! :-) And surely we can do this a lot faster than ripping out all the suburbs and replacing them with something else.
What needs to be got through to people who have influence is that we need to decide whether we head for sustainability or for an ever decreasing economic cycle where boom is followed by bust, is followed by smaller boom, is followed by bust, etc. I don't know what the long term, and probably long lasting, end scenario is for the boom bust cycle, but I'll bet it isn't going to be pleasant and will be with a much smaller population. If we want to head for sustainability, then a very different society and economy will need to be engineered, one that will never result in people like Vinod (at least not in wealth).
So, assuming a goal of sustainability, any cheap non-renewable energy we have left needs to be directed only to sustainability projects (or at least increasingly so). Any carbon tax must have a specific measurable aim of reducing oil, gas and coal use for leisure, and later for more "essential" uses. Saved oil, gas and coal must then be put to use in building sustainable infrastructure; sustainable without oil, gas, or coal.
Tony
Cheers,
RR
I wish them luck but I think a limited proposal will have limited results.
Effective subsidy ($/KWh) Nuclear (1947-1961): 15.3
Effective subsidy ($/KWh) Wind (1975-1989): 0.46
So, as part of my community service, this will be another installment of "lying with numbers" (TM).
First of all, notice that they are over different periods, why not make them over the same time period? Secondly, note that the effective subsidy of $15.30/KWh is about 300 times the wholesale cost of electricity (roughly $0.04/KWh). Is it really true that we are subsidizing energy with a factor of more than 300x its wholesale value? Even for wind this would be a subsidy of at least 10x. Seems fishy already.
More importantly, there wasn't that much nuclear capacity in the US in 1961, the majority was added between 1960 and 1980, so what we are probably seeing here is a few test reactors that produced minimal amounts of power (like the one at INEL that powered Arco for awhile). Take the money for the test reactors, probably add in lots of money spent on nuclear weapons, then divide it by a really insignificant amount of energy produced, and voila, the result is a "subsidy" of 300x the wholesale price of electricity.
Now for the wind period. How much R&D really occurred in the wind realm between 1975 and 1989? Seems to me that most wind has really taken off in the last few years, and thus the research was probably done mostly in the last few years as well. This is probably another case of taking the cost of a few research projects, and dividing it by some insignificant amount of energy produced. Voila, anohter meaningless number, but one that is slightly "better" than the meaningless number produced for nuclear. In any case, a subsidy of 10x wholesale cost seems a little steep to me.
Also, notice the last column of the table, the installed capacity from a year that is not in any way considered by the rest of the table. A non-sequitur. Even if it does have meaning (the R&D paid for nuclear caused it to have more installed capacity), note that 1999 is 38 years after the end of the development period for nuclear, but only 10 years after for wind. To be fair, this column should include the wind power produced in 2029, but sadly, these numbers are not available, and probably wouldn't show as wild a disparity if they were. Much better to use the contrived situation.
OK, there you have it. Second page, severe problems, numbers manufactured to support the conclusion they desperately want to draw. It's a waste of time.
I have watched the development of wind turbines for a couple of decades and the major forces in development were:
- A carbon tax in Denmark
- Favorable pricing of wind generated electricity in Denmark
- An "in service experience" database on WTs collected and published by the Danish gov't (Better quality WTs got more orders; poorer quality models disappeared). Market driven evolution.
- Danish law and society that allowed for groups of people (a half dozen farmers, some city residents and one farmer) to own one or more WTs as a co-op.
Just a few years ago, Danish companies produced 80% of the world's WTs. Please note "Massive R&D spending by Denmark" was NOT listed. (Enron bought last surviving US & German WT makers, merged them, and then GE bought the division from bankruptcy court. GE put in some major marketing & research $ and is now #1).Many billions have been spent by gov'ts around the world and only nuclear power can be said to be the "in service" result. R&D spending by gov't is *NOT* the answer ! They have had a long series of "not in market" results for over 30 years. Geothermal was also developed with minimal gov't R&D.
Thus my preference for mature technolgies that we know can work; especially Urban Rail.
Also, it should be added that the R&D for nuclear is now spent, so there is no reason to not use it just because it was pretty expensive to develop.
Realistically, taking only R&D related to civilian nuclear power (no nuclear navy stuff, no nuclear weapons, none of that), how big was the subsidy compared to today's generating capacity, in $/KWh. Probably pretty small. Even if 40 billion was spent in 1960, that's less than a billion a year for something like 100GW of capacity. A penny per watt of capacity, a tiny fraction of a cent per KWh, hardly seems like the criminal waste that was claimed.
Jack it up to 100 billion or more, it doesn't matter. The electrical infrastructure in this country costs trillions of dollars, a few hundred billion for R&D doesn't fundamentally alter the equation.
I just don't see why the fact that this tech cost a lot to develop (yeah, less than 1% of the cost of installing our current electrical generation, that's apparently a lot...) somehow means that it's bad to use it now. Want subsidies for wind development (which you don't, I see...) fine, but it's no reason why nuclear can't be used.
That's all I'm saying.
Otherwise - there is one "single bullet" for US, namely a higher gas tax. The rest will happen naturaly.
I would love for that money to be dedicated to providing alternate transportation options to local areas heavily dependent on automobiles...
I still don't see the political will for that to happen...but a few voices screaming at the trees are better than none.
Cheers,
RR
The commodities markets seem to have woken up to the reality of future oil shortages. Even with a relative glut of supply today, prices are high on the assumption of shortages in the future. That's exactly how markets are supposed to work and it is one reason we have them. The result is that even if the geopolitical situation improves, oil prices are likely to stay high, making gas high, and continuing to encourage conservation and development of alternative resources.
In short, we are on a good track right now. We have the effect of the gas tax but it is coming from market mechanisms, making it much more efficient and economically rational.
Alternately, if we were to remove all the current subsidies to oil and gas, that would be an even better first step.
We should be advocating removal of subsidies to oil and gas companies long before we push for an increased gas tax. I suspect that if all the direct subsidies were removed, and some of the (many many many) indirect subsidies the market would be much more likely to take care of itself.
In the current political climate, this is an easier sell than making gas prices even more expensive through taxation.
Only with that log burning in the fire would I throw in the much bigger and greener increased gas tax log.
I agree, a gas tax now is probably too little, too late.
Hitting the average Escalade driver in the well-padded wallet with an extra buck (or two, or three) will have little effect on their consumption
A real supply shortage* -- with gas lines, ten gallon limits and odd-even fill-up rules -- will hurt them where it really, really, hurts, in the pocket watch.
A month of waiting in a gas lines is a great inducement to consumption adjustment.
I wonder how long it will be before the "Will wait in gas lines for food" signs appear.
*Say if Saudi Arabia or Iran decide to apply pressure to force an Israeli cease fire by cutting oil exports.
The rationale behind higher gas tax would be primarily to cover the externalities associated with oil consumption - military expenses, pollution, traffic, suburban sprawl and associated waste of resources for land, roads etc. Secondary we have high level of uncertanty within the oil market about the true state of reserves and prospective production which makes the market quite inefficient in pricing in future scarcity.
In all cases gas tax will buy us time for the mitigation response and will make it smoother. Maybe it is true that politically it is too late to impose it, but this is a different problem.
I think he would want to champion some technical fix, something for which people will think he has some credibility. Something like Robert's biodiesel from algae or wind power. He might be willing to champion a new generation of nuclear power plants that will inevitably be a big part of our mitigation but which is still pretty politically radioactive. Or possibly put money into developing new battery or fuel cell technology.
A possible exception would be if the capitalist was not advocating it from a point of view of a seeking for a successful enterprise, but because he is concerned about the long-term stability of the system as a whole. A rich, successful VC like Khoshla may very well fit the latter category if he wants to, but his support for ethanol (the limitations of which I'm sure he is aware of) makes me think that he doesn't.
How to make it politically acceptable - that is the real challenge.
In short, the general public is starting to realize that renewables will be crucial in energy independence. This realization can and should be leveraged to adress the imbalances in government support for various energy industries. Shifting support from Big Oil to renewables can be presented as a revenue-neutral and labor-market-neutral policy that is very hard to refute. Another angle is that it's a fitting "punishment" for Big Oil's "excess profits".
This could be linked to engine capacity / mpg / carbon emissions. The bigger the engine etc , the higher the tax.
This has started to happen in the UK , but with minimal effect yet as the difference is not that great in tax rates and if you can afford a large 4wd, you can afford the tax difference.
One side effect however is that it bites impoverished hill farmers who need land rovers more than it bites a 'Chelsea Tractor' driver.
Gas has always had an important tax here, in fact every fossil fuel.
Today, %60 of what you pay for filling up your tank is gas tax. I think this follows the general pattern in Europe.
We "achieved energy independence" more than 15 years ago and today Argentina is a mild oil exporter and our cars are small just like the Europeans.
That's a different pattern of what you could see in México or Venezuela (comparing apples to apples this time) where, as far as I know, gas taxes are not so high and cars are bigger and not so efficient.
Of course, timing issues regarding the USA case can not be ignored.
Regarding the "efficiency and rationality" of markets, the idea of having your A/C on while you're not at home, driving thousands of miles each month to get to your work, using SUVs to get to the grocery store around the corner, are IMHO very wasteful behaviors. This has been known for years in Europe, where energy taxes have played an important role.
Best
Fernando
If you favor having the government support conservation efforts and production of alternative fuels then it should come from returning to the income tax rates of the 90s. Bring the troops home would free up hundreds of billions of dollars for healthier uses.
Tony
http://www.eia.doe.gov/emeu/cabs/argentna.html
The tax would give people incentive to reduce gasoline consumption and the rebate would give people incentive to install alternative energy systems on their homes, further reducing our dependence on foreign oil...
or even take a penney from current gas taxes to give out as tax rebates for alternative energy.
Surely, they can do something to get us moving down the best path.
something? please? save us from ourselves? a little?
Actually, no they can't agree to governement intervention in what they consider to be an area where "The Markets shall provide".
It is against their religion.
They believe that the government should not pick the winners and losers. Only the Free Market (and the Invisible Hand) is allowed to pick the winners and losers.
What they don't understand is that Mother Nature has ultimate pick of the winners and losers.
Right now, because of our unwavering worship of the Adam Smitian religion, Mother Nature has the human species in the "soon to be de-populated" column.
We need to get the radical fundamentalists expelled from the Smithian churches. Only then do we have a chance.
My impression of sentiment over gas taxes is that people see it as another government ripoff that will increase their burdens instead of reducing them. The only way to rebut that idea is to dedicate every cent of that money right back to the taxpayer's pocket. If they see it as rewarding the virtuous and penalizing the wasteful, they might get behind it.
This should work but it WON'T, see my reply to one of your previous comments.
Taxing oil, or carbon, and putting that tax right back in people's pockets gives a "price signal". It "disadvantages" oil and carbon. It creates a relative advantage for anything which uses less, or none.
It's strange that Smithians claim on the one hand that luxury taxes destroy the market for e.g. yachts by discouraging consumption, but turn around and say that taxes on gasoline won't discourage consumption. I smell hypocrisy.
I am not arguing that a tax won't work (I actually don't know) but that NO governement will pass such a tax at a significant level, the ones which seemingly have have done so just to get the dough.
I am no Smithian.
Did you read the links I gave?
But I am uncertain about its efficacy ...
Gas at the tank has tripled in the past seven years, yet fuel use has gone up ... Thus, uncertain about the the elasticity of demand against price. Traveling in Europe, it is impressive to see the slow but steady introduction of larger vehicles (even SUVs) on European roads over the past 10+ years. 4x4s are not "rare" in France, for example, as they were just a few years ago.
Now, the benefit of a gas tax would be the certainty of the increase -- no expectation it would fall. And, a gas tax that came in to start at, perhaps, 30 cents/gallon with a guaranteed step increase (2 cents / month) would create a clear signal to the entire market space that there would be continued incentives for fuel efficiency, alternative fuels, and changed usage patterns (including better urban planning).
And, the best would be if that money were (mainly) targeted to moving toward a more sustainable and prosperous energy future.
By the way, I think that gas tax is not "it" -- carbon tax, with the same sort of explicitly stated growth. Not great to move people off oil and onto coal-based fuels ...