Will cheap oil affect green innovation?

February 12, 2009, 2:58pm PST | Length: 00:03:34
At a Churchill Club event in Santa Clara, Calif., Bill Joy, co-founder of Sun Microsystems and partner at Kleiner Perkins Caufield & Byers, calls on the government to require using alternative fuels to protect biofuel innovators from the cyclical nature of the oil market and to make it easier to invest in wind, solar, and geothermal energy.

Transcript

Will cheap oil affect green innovation?

watch ticking

>> So the question is about the low price of oil. How does that impact the prospect for cleaner technology really going forward? Yeah, I mean, not only is, is oil cheap, but coal is also cheap, right? So we have to make a societal decision at some level whether we're going to protect the innovators somewhat from the cyclic nature of the, if the oil price keeps going up and crashing, it tends to be kind of a random walk. I mean, we saw a pretty steep decline here in the last year. It's, it can wipe out a whole generation of startups trying to, to bring us renewable fuels. So the government can help some by creating like a, a, a standard for a certain percentage of our fuel to come from renewable energy, and that will benefit us in the long run, but that would help us to get the innovation through the cyclical nature of, of the commodities, but in order to clean things up, we're going to need to clean up the grid of coal, and we're going to need to clean out the fuels to be built based roughly on biomass, right? So we can clean the grid of coal with things like solar, wind, modify with better batteries, and probably some geothermal because that's, if we can engineer the geothermal so we can make geothermal resources using advanced drilling technology, then we can, then we have a thousand year supply of energy under the United States and potentially available to us. So there's lots of opportunity here. The question is how do we protect the innovation to some extent through down the learning curve past the cost of oil and past the cost of coal. The German, Germany's helped a lot by and the people who have feeding tariffs by, you know, paying higher prices to put solar and wind installations. And so they lead in the, the world and the installation of those things, and they're helping to drive down the technology curve much as the State of California was doing here with some of their solar programs. Given the budget situation in California, it's hard to imagine that California will continue to be the leader in those kind of programs so I didn't know if, that probably takes, probably hurts the Valley. It probably hurts our future, but, you know, the deficit being what it is, but we have to deal with coal, and we have to deal with, we have to close the loops on those, and those technologies - wind, solar, with batteries, geothermal, and fuels from celluastic phonetic, advanced fuels from celluastic biomass, probably fuels that are better than ethanol, ones that are blendable directly into diesel and gasoline - if we can find pathways to make those fuels from bio, bio, you know, non-food biomass inexpensively, then, then we have a chance. Now, if you go and look at, you know, like the, we do a free energy calculation. I want to go from this molecule to that molecule, you can tell that the embodied energy is such that, you know, it's possible there's a pathway that's, that's very inexpensive. We just don't have the chemistry to do that. We have to find that chemistry, and, it, it may not exist, but it's at least, it, it potentially exists, and that's the kind of thing that we would hope the entrepreneurs would be looking for.

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Talkback Most Recent of 31 Talkback(s)

  • Protection from Competition
    How innovative can the green fuels be if they are protected from competition by having their customers forced to use them?
    ZDNet Gravatar
    johnnylumber
    13th Feb 2009
  • Protection ?
    If their ideas are sound then they will come to market and be successful. No other industries are "protected". This is anti-capitalist. I believe that we need to go to alternative fuels but it will take time and it will be a while until they are cost effective for everyone to use.

    I will not be bullied into this though ! The average consumer will make the decision. I am not going to spend $50,000 on a car. I will wait until it becomes more reasonable.

    We need to drill for our own oil here in the US until the day comes where Alternative Fuels can take over. We have enough oil to last us decades.

    Obama though is not very smart and I think he will try to add more taxes to gas prices or attempt to manipulate them. I think he will also do the same with our energy program. This will be another catastrophic decision (like his "stimulus" bill) which will only hinder alternative energies and anger consumers.

    Let's also not panic. More and more information is contradicting the myth of global warming. Let's do this to reduce pollution not because of junk science.
    ZDNet Gravatar
    pizzaman7
    17th Feb 2009
  • That's not ture
    So it's ok for the government to make investments in the oil and gas industries of our country, but the alternative energy industry should be left to fend all for itself? Because the government already protects the oil and gas industries when they buy up oil reserves.

    When gas prices go up, people start looking at more efficient and cleaner alternatives. But then the government feeds back some of their oil reserves, which allows the oil and gas prices to fall. Then, after that happens, most people forget all about the more efficient, cleaner alternatives to gas and oil, which allows this whole process to start all over again.

    The way I look at all of this is that people will either learn that clean energy is an investment in everyone's future, and something that everyone should be interested in, or human life as we know it will soon be gone. Because life goes on, it's just whether or not humanity can survive its own stupid mistakes.
    ZDNet Gravatar
    Crash2100
    19th Feb 2009
  • Green energy is a lie
    There is no such thing as green energy.

    This is all a marketing ploy to make a small handfull of people rich at the expenice of us all.
    ZDNet Gravatar
    rparker009
    19th Feb 2009
  • I think you have this mixed up
    >>This is all a marketing ploy to make a small
    >>handfull of people rich at the expenice of us all.

    I think you have this mixed up, that's what oil does for everyone right now.

    So how is generating energy from the wind or from solar panels on a building not green energy?

    For crying out loud, Iceland sets a darn good example that a clean energy economy can be created. For the past 10 years renewable energy has supplied Iceland with more than 70% of its energy needs.

    http://en.wikipedia.org/wiki/Renewable_energy_in_Iceland
    ZDNet Gravatar
    Crash2100
    19th Feb 2009
  • What oil does for me right now
    Is feed me.
    The food I eat, from around the world, was brought to me by ship, plane, train and particularly semi-truck. Much of the food was raised to be edible thanks to fertilizers and pesticides based upon petrochemicals.

    Oil gives me my standard of living, and I'm not giving it up for any human-hating cult.

    If you people were as convinced of our imminent demise due to "globular warming" or "population bomb" or whatever your 2-minute hate of the week is, you'd be going ape trying to develop the technology to get Mars and Venus terraformed. Not only would it give us someplace to go (to get away from you), not only would it provide us a chance to survive any catastrophe (no doubt man-made) that may take place here on Earth, but it will help us learn how climates work without messing around with our own.

    But that takes "hard" technology, the kind you birkenstock wearing wimps hate the most.
    ZDNet Gravatar
    hiraghm@...
    23rd Feb 2009
  • How stupid are you?
    Why do you think that green innovation has anything to do with taking away your precious luxuries? First of all, they can't take away what's already here because its grandfathered in. It just sets higher standards for what's being made in the future. And where's the harm in asking that things run more efficiently? Efficiency even makes it less costly to run things!

    So why is it better to develop technology at random by sending fools to mars, than investing money directly into the specific technologies here on planet earth?

    Many of the world's most powerful trains are powered by electricity, and electricity can easily be generated using clean technologies like wind, solar, and maybe even with semi-clean technologies like nuclear power. We're just behind in using the newer, cleaner technologies here in the USA, thanks a lot to clueless fools like you.
    ZDNet Gravatar
    Crash2100
    27th Feb 2009
  • Those "Oil Reserves" are not "reserves"
    It appears you're referring to the strategic reserves, which are not for controlling market fluctuations, but for keep us supplied in time of emergency, particularly war.

    It is irresponsible to release them to control prices.

    Your religious doctrine that insists upon crippling mankind is what will bring about our doom, not our failure to adopt your Earth-worshipping religion.
    If it's such a big deal, we should start learning how to terraform other planets before messing with our own based on nothing more than the rantings of misanthropic fear-mongers.

    "Clean energy" is an oxymoron, and is not part of MY future. My future is big, noisy, smelly, POWERFUL energy. We have no need for "cleaner" energy.

    And we use oil for a lot more than just burning as fuel.

    What we need is a bold President and Congress, who will really fund NASA into constructing a fleet of easily modifiable, reusable intra-lunar and interplanetary vehicles, particularly those which can be converted into tankers to bring back the exotic petrochemicals from Titan. It's no more outrageous than the spice trade or the regular trade routes between Europe and the Americas in the 16th to 18th centuries.

    It's certainly no more insane than trying to replace the energy produced by petrochemicals with solar panels, windmills or squeezing crystals. The big difference is that it expresses a belief in Man's nature and ingenuity, and offers us a future as more than living like animals on a ball of rock that couldn't care less among other species that couldn't care less.

    Hey, I've a 'green' cure for the economic crisis: hire the unemployed to walk in giant hamster cages to provide "green" electricity.
    ZDNet Gravatar
    hiraghm@...
    23rd Feb 2009
  • ZDNet Gravatar
    JO_ACT
    13th Feb 2009
  • RE: Will cheap oil affect green innovation?
    This is mandated speculation. Repeatedly Bill says "if it is possible." This is not a valid basis for a law that reaches into every pocket and threatens our economy and way of life.

    Innovation needs to be market driven, not government driven. Now that E85, which was government mandated, has been shown to cause significant food shortages and to have a much higher energy cost than petroleum, we should have learned to question the wisdom of our legislators.

    While we wait for new technology to be proposed, developed and dispersed, we need energy to live, travel, work, and manufacture goods. To get that, we must continue to drill, refine and utilize our existing petroleum. In addition , we will continue to need coal fired electricity and new atomic power plants.
    ZDNet Gravatar
    Tropel
    18th Feb 2009
  • Gawd, I hope so.
    Freedom is letting the market decide.
    Let people vote with their wallets.

    Just because weirdos like Bill Joy are ecophreaks, that doesn't mean they should be allowed to impose their religion on the rest of us.

    Is there anyone left out there with money or in charge of a business who isn't some wild-eyed left-wing Green religious zealot?
    ZDNet Gravatar
    hiraghm@...
    23rd Feb 2009
  • Closetman listen up.
    have you not paying attention to the current world situation over the last
    10 years?
    We are all in trouble, and most (70% of the American public),wants to find
    a viable intelligient solutions, so we can survive in the ever changing
    world. We just spent a $trillion dollars, thousands of dead and crippled
    American and Iraq's, in Iraq, for oil. And we screwed that up also. They
    don't want to share with us because of the stupid occupation, we
    incurred on them.
    DUH !
    ZDNet Gravatar
    wallis2004
    7th Jul 2009
  • If green is so valuable, why does it need a rigged market?
    If green energy needs marketplace protection from competition, then how is it a viable product? Viable products, products that offer a compelling argument for itself can compete and succeed in the marketplace. If green energy requires high gas prices to be economically viable, that implies that it is a high cost alternative. What is the reason that we should willing choose a higher cost, uneconomical alternative? To cushion these technologies, government would have to articially inflate the price of existing energy choices, i.e. higher taxes, fees, cap and trade systems to make the business case for green energy. Thus, there is not a strong economical argument here.

    Another possibility is that green energy provides more value and, as such can command a higher price. But if that value were readily apparent, green would not need article price floors for its competing alternatives? People would see the value and be willing to pay the price premium.

    So why would we make a choice that is neither economical either in lower cost or greater value? Simple. Blind faith in global warming. If global warming were so convincing, people would willingly pay the price premium and price supports would not be necessary. However, this is evidently not the case. The people in charge in Washington would willingly force a uneconomical choice on us based on their blind faith. Rigging the market is hardly capitalistic free markets. We are having the green economy forced upon because the market is certainly not demonstrating the level of fervor that the Obama administration has.
    ZDNet Gravatar
    FinanceBuzz
    25th Feb 2009
  • Because the petroleum market IS rigged
    $4+ per gallon being the latest case in point.

    Historically, every time oil prices have risen, alternative energy becomes more cost effective. As soon as noticeable progress starts being made, the oil industry deliberately deflates their prices to kill the alternatives, thereby ensuring their virtual monopoly on energy supply.

    The ONLY way to break their monopoly is to forge ahead with alternate energy. Otherwise, they can cut us off at the knees any time they feel like it.
    ZDNet Gravatar
    Dr_Zinj
    10th Mar 2009
  • If green is so valuable, why does it need a rigged market?
    If green energy needs marketplace protection from competition, then how is it a viable product? Viable products, products that offer a compelling argument for itself can compete and succeed in the marketplace. If green energy requires high gas prices to be economically viable, that implies that it is a high cost alternative. What is the reason that we should willing choose a higher cost, uneconomical alternative? To cushion these technologies, government would have to articially inflate the price of existing energy choices, i.e. higher taxes, fees, cap and trade systems to make the business case for green energy. Thus, there is not a strong economical argument here.

    Another possibility is that green energy provides more value and, as such can command a higher price. But if that value were readily apparent, green would not need article price floors for its competing alternatives? People would see the value and be willing to pay the price premium.

    So why would we make a choice that neither economical either in lower cost or greater value? Simple. Blind faith in global warming. If global warming were so convincing, people would willingly pay the price premium and price supports would not be necessary. However, this is evidently not the case. The people in charge in Washington would willingly force a uneconomical choice on us based on their blind faith. Rigging the market is hardly capitalistic free markets. We are having the green economy forced upon because the market is certainly not demonstrating the level of fervor that the Obama administration has.
    ZDNet Gravatar
    FinanceBuzz
    25th Feb 2009

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