In 1849, Abraham Lincoln invented a device to lift boats over shoals, and he remains the only American president to be granted a patent. Lincoln also was intrigued with wind power. In a lecture on inventions and discoveries in 1860 he ruminated, “As yet, the wind is an untamed and unharnessed force; and quite possibly one the greatest discoveries hereafter to be made, will be the taming, and harnessing of it.”
Fast-forward 161 years. We’re still trumpeting wind power and other renewable energy resources as “the future.”
Speculative enthusiasm has pushed green energy stocks to stratospheric valuations. Anything “green” volatile stocks like Tesla, special purpose acquisition companies (SPACS), clean energy ETFs, etc. is attracting gobs of money. Realize that a dose of reality may bring some prices back to terra firma as failures and setbacks plague the market.
Electric cars (EVs) currently comprise 3 percent of total vehicle sales nationwide. The Wall Street Journal, 7/26/21, reported that the Electric Highway Coalition seeks to build an EV “fast charging” network spanning a large portion of America. One charging unit and stall costs about $110,000 to build, and we’d need stations about every 50 miles on popular highways. A 50-unit recharging station on a busy interstate highway would cost $5.5 million. President Biden proposes spending billions for charging stations as part of his infrastructure plan. But until charging stations are as ubiquitous as gas stations, the Great American Road Trip will be confined largely to gas-powered vehicles.
However, gas-powered vehicles represent the single largest source of America’s greenhouse gases, producing more than 25 percent of emissions. (New York Times (8/6/21). Obviously, increasing EV use is a desirable goal. President Biden has said that by 2030, half of all vehicle sales should be electric. That’s an ambitious target for less than nine years away. EVs are powered by energy intensive lithium-ion batteries, and a tremendous amount of energy goes into just manufacturing the batteries. That fact points to other challenges.
One major issue involves the sourcing of critical materials. A report from the International Energy Agency (IEA), May, 2021, notes, “Wind, solar, and battery technologies are built from an array of ‘energy transition minerals’ (ETMs) that must be mined and processed.”
Demand for lithium, nickel, graphite and rare-earth minerals is set to explode by 2035-2040. However, declares energy expert Mark Mills, there are no current plans to fund and build the needed mines and refineries. “The supply of ETMs is entirely aspirational,” says he. (WSJ, “Biden’s Not-So-Clean Energy Transition,” 5/12/21).
Mills notes that a land-based wind plant sucks up nine times more mineral resources than a natural gas-fired power plant, and a typical EV requires six times the mineral inputs of a conventional car. The IEA sees the movement toward EVs as representing “a shift from a fuel-intensive to a material-intensive energy system.”
Adds Mills, “That means a shift away from liquids and gases whose extraction and transport leave a very light footprint on the land and are transported easily, cheaply and efficiently, and toward big-footprint mines, the energy-intensive transport of massive amounts of rocks and other solid materials, and subsequent chemical processing and refining.”
The 2,700 page Senate infrastructure bill offers massive subsidies to support breakthroughs in battery technology and charging station efficiency, as well as concepts as diverse as carbon capture, clean hydrogen, advanced nuclear reactor projects, and “drawing board ideas” with promise. The federal government is moving toward an increased role as a “venture capitalist” using dollars extracted from taxpayers and dollars borrowed or printed, all with fiscal policy implications. With billions and even trillions of dollars sloshing around, investors will be challenged to consider winners and losers in our race to a cleaner tomorrow.
Existing technology will need upgrades. Early model wind turbines are requiring more expensive maintenance than contemplated, and they are failing at higher rates than expected.
The same challenges plague photovoltaic solar (PV) facilities which also are degrading at a rate faster than expected.
Currently, 20 percent of the energy generated in America comes from sustainable sources. Aspirations of further progress are bedeviled by high costs and/or unproven technology. But good news in the quest for cleaner energy and environmental care may be seen in comments by economic and public policy expert Stephen Moore posted on ramussenreports.com, 8/3/21. Said Moore, “The U.S. is blowing out the rest of the world in tech leadership. No other country in the world comes anywhere close in tech leadership and the dominance of our made-in-America 21st-century companies.”
Inventors, scientists, and entrepreneurs press on and advances will come. Hydrogen, nanotechnology, and small modular nuclear reactors hold promise. Professional money managers and venture capitalists strive to separate hype and the madness of crowds from truly promising breakthroughs worthy of investment for serious long-term wealth-builders and wealth-preservationists. In our critical journey to a sustainable tomorrow, money will be made and money lost. That’s the nature of progress.