Skip to main content

View Diary: A Head in the Clouds:   The Genius of 1976 Considered. (119 comments)

Comment Preferences

  •  Lovins' Predictions (4+ / 0-)
    Recommended by:
    LIsoundview, Plan9, NRG Guy, bryfry

    One of my favorite Lovins' predictions was that the price of oil and gas would fall precipitously and continually in the future.  The argument is that since there are so many very-low-cost conservation measures out there, energy demand would continue to fall as everyone continued to implement these conservation options.  Thus, energy production would have to compete with these cheap conservation costs (e.g., ~2 cent/kW-hr, ~$10/barrel equivalent).  Thus, prices would fall, production would fall, as would exploration and development of any new capacity, etc....

    He predicted this long ago.  The amazing thing, however, is that he continues to predict this even today (such as at the forum at Stanford I saw him at only a month or so ago).  He also predicts (even now) that not only will we not build any new nuclear OR coal plants, but electricity costs will fall so low (i.e., below ~2 cents/kW-hr) that even the existing plants will close because they can't recover even their operating costs.

    The fact that all the data shows that the world is moving in the exact opposite direction in every respect does not seem to dissuade him.  Energy demand is soaring.  So are electricity prices, and energy prices in general (including oil and gas).  Not only are existing plants running, but there are proposals for scores of new power plants, including coal and nuclear (in fact, mostly coal and nuclear).

    I think where he makes his critical mistake is in understanding human nature.  He's probably actually right that there are conservation measures out there that are indeed very cheap.  The problem is that people can not be counted on to act in the economically optimal way in this regard.  Also, there are factors that he is not understanding and/or weighing (such as convenience, etc..).

    The fact is that people will not change their behavior until energy prices are high enough to measurably affect them economically.  As long as energy remains an insignificant fraction of overall expenditures, people will simply not spend their time or energy even looking into conservation options, almost no matter how much economic sense they make.  People don't spend their time and attention addressing things that aren't important to them (i.e., are not affecting them in some tangible way).  Experience has shown time and time again that high cost, and only high cost, will make people change their behavior and conserve.

    The thing is, at the price necessary to change people's behavior, supply options like nuclear can compete.  This price, i.e., the price required to rein in demand, is probably the energy price that the market will equilibrate to in the future.

Subscribe or Donate to support Daily Kos.

Click here for the mobile view of the site