Wednesday, October 15, 2008

Bees, Butterflies, Elephants, and Oil Men

Neal Dikeman, CEO of Carbonflow and editor of the Cleantech Blog, made a post on Alt Energy Stocks last night.

It's about the energy industry in an economic downcycle, the history of cleantech investing, and the myth of disruptive energy technology. It's a message to energy entrepreneurs and the venture investors that back them.

Be forewarned, you do not have a comparative advantage here. The oil men invented risk taking, AND risk management. The oil men are bigger, faster, smarter, richer, have more scientists and more entrepreneurial spirit than you, AND they know energy.

So while you fight the good fight to develop technology to change the world, don't forget, be humble, learn what can be learned, build what can be built, and walk softly, because the elephant in this room floats like a butterfly and stings like a bee, and he has yet to take the field.

I don't know if this is a call for helplessness, intrapreneurship, reckless virtuous bravery, or policy change, but I'm listening. If Charles Morand and Tom Konrad work with this guy, then he probably has something important to teach us.

That is a bold statement about the oil men though.

Do they know energy? They used to. And, no question about it, they have a jump on everyone else if they want to predict the future and start adjusting.

But are they predicting? Are they adjusting? Or are they fighting to preserve an increasingly untenable status quo?

I bet quite a few of those oil men, entrepreneurial spirit and all, are buried deep in the complacent gluttony of record profits and corporate enormity. I think it's possible that they'll be stifled by past success. Aren't most champion boxers dethroned by upstart challengers because they take victory for granted and show up for the big fight unprepared and out of shape?

Wishful thinking maybe, but, when you're 26 and what precious little cleantech experience you have has nothing to do with oil or fuels or commodities, boxing metaphors can be deadly convincing.

Update (Oct 15, noon): Oil analyst and energy sector investor Gregor McDonald thinks at least one institutional "oil man" is asleep at the wheel of a car full of cash. Complacency? I wonder what Neal Dikeman thinks.


steve goodman said...

I think the oil companies realize that alternative energy isn't going to power the world as we know it today.

Their prediction is "game over", and their adjustment is to rake in the profits while they can.

Jake de Grazia said...

Who is that guy? Seems a little suspect, no? Life as we know it is over? USAID is "the U.S. government agency tasked primarily with destabilizing foreign governments not amenable to western oil interests?" I guess it's possible everything this guy says is true, but it's pretty extreme, and I get the feeling that the dude might be having fun with it.

steve goodman said...

It's definitely extreme in its viewpoint, but some of the facts are irrefutable - check out the DOE website for their stats on how much power alt. energy produces in relation to oil.

The 10 calories of fossil fuel to one calorie of food figure has been confirmed in several sources, most notably an article on Kleiner Perkins in NY Times Magazine this month.

There are of course stop gap efficiency solutions in the transition from fossil fuels/coal to sustainable, but I think the question "is there enough time to pull it off" is legitimate.

Jake de Grazia said...

I agree. No question it's important to consider what an exceptionally powerful source of energy oil is and how difficult it will be to replace it, but it's the buy canned goods and learn how to defend yourself with a hunting knife message that worries me. It just doesn't feel productive. It's individual and despairing, and I don't think it's helpful to get people thinking like that. It's giving up, and I'd rather fight for radical change and lose than prepare for the apocalypse.

steve goodman said...

It might not feel productive to you

Different strokes for different folks.

The survivalist bent aside, that was the first page I'd seen that talks about the challenges in a concrete fashion (EROEI, actual wattage figures, etc.) rather than "the challenges are big, but all we need to do is act", "smart people are working on this", Al Gore fashion.

steve goodman said...

Also, I agree, it is very individualistic, and I, personally, don't want to view the world through that lens.

Jake de Grazia said...

EROEI is key. I do appreciate that he brings it up. I wish I could remember who else talks about it. Amory Lovins maybe? In his TED Talk? Or maybe in his interview with Charlie Rose?

Also worth noting that Michael Pollan takes EROEI to another level in his food policy article from last weekend.