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?

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>> 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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Winter of 09/10 by: toybox1 - 09/18/09
toybox1 16th Sep 2009
I am curious to see just how some will respond to the current economical climate when people that are already going hungry try to keep the thermostat set at an affordable temperature setting (45degrees?) and still put food on the table, not to mention put fuel in the car to both look for employment or go to keep the doctors appointment... Man, some greedy screwballs have really over turned the horse cart and they wonder why there are issues! I personally see many low income people giving up (freezing/hunger death) because of intentional blindness on the parts of everyone involved in the money hungry greed me first game... Who killed the American Dream? Think about this when you go to sleep this winter after not eating for 3 days... It gos far beyond the green or fossil approach (carbon footprints? who's underhanded idea was this?) at this point in the global history records!
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Protection from Competition
johnnylumber 13th Feb 2009
How innovative can the green fuels be if they are protected from competition by having their customers forced to use them?
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Protection ?
pizzaman7 17th Feb 2009
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.
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That's not ture
Crash2100 Updated - 19th Feb 2009
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.
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Green energy is a lie
rparker009 19th Feb 2009
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.
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I think you have this mixed up
Crash2100 Updated - 19th Feb 2009
>>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
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What oil does for me right now
hiraghm@... 23rd Feb 2009
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.
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How stupid are you?
Crash2100 27th Feb 2009
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.
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Those "Oil Reserves" are not "reserves"
hiraghm@... 23rd Feb 2009
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.
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What cheap oil ?
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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.
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Gawd, I hope so.
hiraghm@... 23rd Feb 2009
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?
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Closetman listen up.
wallis2004 7th Jul 2009
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 !
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.
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$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.
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.
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Oil companies, large companies, have $billions of YOUR money to fight
new industries related to greener solutions. They have the money to kill
them, thus we have to give them a break to develop, florish, and become
competitive.
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Say "No" to government meddling
ilnaras 26th Feb 2009
Why is it that when we need innovation, we always turn to the government to push it along? Look what happened when it was decided that educational content was needed in children's television and the government regulated that, requiring a certain amount of educational content? The quality of children's television went down.

Govenrment should be kept out of market situations. Green innovators need to be asking the question "How can we put this technology into the hands of consumers in a manner that's low-cost and convenient?" This technology has to benefit consumers, not just offer a warm fuzzy feeling.

For cars, for instance, consumers just want a way to power their vehicles economically (and offer, secondarily, a health benefit). Solar and biofuel can potentially do that.

The guy here said "In [whereever] people were willing to pay extra for..." Guess what, that's not going to happen here. You want green alternatives in use, you need to benefit the pocketbook and make it easy to get, and all the government meddling isn't going to do that.
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They stripped financial regulation, and we got screwed, and we will be
screwed for maybe the next 5 to 10 years. Thanks Bush/Cheney for
f_cking up America.
We need government help to move us along in a positive direction in
energy areas.
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Green innovation doesn't take anything away
Crash2100 Updated - 27th Feb 2009
Why do so many people think that green innovation has anything to do with taking away existing luxuries? First of all, even if the government sets cleaner standards, they can't take away what people already have, because its grandfathered in. This 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!
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RE: Will cheap oil affect green innovation?
atari8bit@... 28th Feb 2009
It might be cheap coming out of the ground or water, but they'll tax the hell out of it so it won't be worth the trouble for greenies.
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In Asia, we experience the same situation. Asian governments are currently mandating oil companies to blend biofuel in their products. I think that's a good effort in promoting the "green" industry. Read more about it here:
http://www.biofuelshub.com/news/1-news/946-asias-biofuel-hopes-dampened-by-diving-crude-prices
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I'm not sure about the government meddling point. I just heard some Republican announce that big brother (government) is back. Well whats the alternative? To have Replublicans relax financial rules and let Wall St. greed crash the society. (Greenspan, you should be embarrassed on what you recommended)

If big brother means keeping the rules in place and watching over them, then go ahead. Watch them and watch me all day.

Anyways back to the main point here I'm from Ma. and I just popped in geothermal myself. I dumped that fantastic 78% efficient oil system for a 400% one. How do you counter that?

I read that some contractors say that geothermal can be the right choice only for specific houses. And thats bull!. Try getting the efficiency of the geothermal system from any of other other systems. You get that same old response from the contractors. Change your oil filter and get a cleaning. Yeah, that really helps.

The state/feds should mandate that all new houses go geothermal and AT LEAST have 2K of solar.

I believe that 3 states right now provide a 100% rebate on solar and it should be for ALL states.

Next year I plan on going solar. It cost about 6K for every 1K you install. So I was hoping I could get about 4K in but since Taxachusetts is more worried about doubling the tax on gas instead of helping existing homeowners ween themselves of the dependencies I'll probably have to live with 1K and hope it makes a difference.

And I also have 2 hybrid autos as well.

So this is the problem. We're mad when it's $4 a gallon and everyone wants to switch, then it goes back to some comfortable state and we forget.

How come the Obama bill doesn't enforce a penalty for every position outsourced? How bout $1M penalty per position. You'll see a lot of jobs open up in the U.S. now.






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Cheap oil is good for the world IF Western governments get their act together and start using alternative energies as a replacement. Subsidised alternative is a must as a start to alternative world outlook!
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The trouble with Green
jscott418 12th Mar 2009
The trouble with Green is that not many will pay more Green to be Green! Cash is what drives technology. If its afordable and competes then great. But why push out old technology so fast. Why try and push all electric cars like GM's volt?
Why not try Hybrid technology and get that price down. It affects consumers so much less. If you ease people into a different direction they are much less inclined to complain. Given the fact that oil is cheaper then its replacements, I don't think anyone will be leaving oil products. But why not use those product more efficiently?
Ethanol is OK as a supplement, but if we try to rely too much on it the costs with be simmilar to oil because it is a traded market. Even though I would rather a farmer gets it then a Arab. I still think we need to realize that this should be something that we think about before we leap into.
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You got it !
wallis2004 7th Jul 2009
70% of Americans want oil off our backs. Whats up with the other 30%.
Gas Guzzlers and terrorism are in the same bed. Get over it and move
America forward.
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Innovation drives change...
toybox1 Updated - 5th Apr 2009
Today is a good time for the innovators to engage and command change towards green alternatives, the question is just where does the forcing of change become the main driver equaling the choice for change?

As long as those that can are utilizing alternatives then eventually there will be a place in the market for the product, affordability remains the key to unlocking the success of the product. Not everyone can afford to drive low mpg consuming vehicles, in the same token the same public struggles to keep up with the high cost of winter heating and summer cooling cost, therefore, the reason the transition towards new technologies seems to be taking small steps in forward momentum. The average cost to convert your home to solar/wind power and make it efficient remains a large downfall in the technologies advancement and the same is comparable regarding electric vehicles. Your average individual struggles to maintain security with current financial budgets and the money to assist the momentum attempting in the making of the way simply doesn't exist.

By lowering the cost of oil at the pumps there can be for the larger of the public an easing of budgetary discipline slowly bringing the market back towards center, by keeping the cost of new technologies low it becomes far easier for the public to make the choice leading into the conversation and pick up the momentum of a solid economical base. This will require the long-term outlook and strategy from the manufacture/designers of the products. Attempts to have a product pay for itself within the first six months of introduction by inflating the cost is not the way to find favor with new technology or innovations. The short-term view of "big money now" will never add to an answer, only the demise of any advancement.

These are my opinions shared freely adding to the thread here. All the same, it's my view and answer to what I feel is a problem in todays capitalistic marketplace.
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If we set a national oil price, say $2.50 gal, then if the prices
go up, add a sliding tax, proportional to the price
fluctuation, and use this money to finance green projects, it
would make our suppliers think twice, as the additional
research tax would just further cut the demand.
Any comments on such an idea?
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speed is what speed delivers...
toybox1 17th Jul 2009
How fast ya wanna go? this question has been a perplexing question that has carried man to the moon... Are we as a society in the position to impose fuel laws? Look again..! Its far beyond the point of recovery in the opinion of more than myself, prudence has come home..! Sure how fast can a rocket expel force, better to ask, how many can eat less lighting the fuse..! Best include everyone and win as a team verses win as a player and burn the rest... They are yet expecting far too much from those of us that are paying the bills, get real... 07/18/09toybox1
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RE: Will cheap oil affect green innovation?
muellerl20 Updated - 3rd Aug 2009
This would still affect the green innovation. For example, BMW owners who are thinking of converting their cars via green bmw parts installations would probably think twice about this investment and would perhaps choose to continue using their old vehicles since oil is much cheaper.
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That is an ideal setup, but in reality, I think we will have a hard time making that happen. Oil companies are willing to exhaust all their efforts in the market against alternative fuel. Let's not forget that the reason why alternative fuel became popular recently is because of the increase in the oil prices.
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I am curious to see just how some will respond to the current economical climate when people that are already going hungry try to keep the thermostat set at an affordable temperature setting (45degrees?) and still put food on the table, not to mention put fuel in the car to both look for employment or go to keep the doctors appointment... Man, some greedy screwballs have really over turned the horse cart and they wonder why there are issues! I personally see many low income people giving up (freezing/hunger death) because of intentional blindness on the parts of everyone involved in the money hungry greed me first game... Who killed the American Dream? Think about this when you go to sleep this winter after not eating for 3 days... It gos far beyond the green or fossil approach (carbon footprints? who's underhanded idea was this?) at this point in the global history records!

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