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strategy and business
 / Summer 2006 / Issue 43(originally published by Booz & Company)


Engines of Change

Mr. Huber and Mr. Mills see themselves in an increasingly ordered and virtuous world. They note that the energy consumed per unit of gross domestic product (GDP) declines with rising prosperity — and has notably done so in the U.S. in recent decades. At the same time, fuel-using devices are becoming more numerous, sophisticated, and power-hungry. This requires a steadier and more reliable supply of electricity, which in turn requires more energy in absolute terms. In the end, the continued increase in GDP per capita and our propensity for using more electrically powered devices will outpace the gains in energy efficiency. Thus, the U.S. (and other Western countries) will continue to see an overall increase in energy consumption.

The authors make a virtue out of this continued increase. They believe it to be an inevitable concomitant of human development. There isn’t enough evidence, they say, to confirm or deny the scarcity of energy sources, or the consequences of consuming more energy — notably greenhouse gas emissions and global warming. Nor do they think these are serious problems. Never mind if rising ocean levels cause Bangladesh to be flooded, no American president will allow the lights to go out. Whatever happens, “we” (in the United States, at least) have unrivaled military technology that other nations have not. The book ends on a slightly peculiar and sentimental suggestion that breeding more children will solve all problems. There is also an unpleasantly supremacist ring to its implication that those with political power will get the energy. The Bottomless Well is based on the idea that even if oil supplies run out in the Middle East, human ingenuity, abetted by technological innovation, will always find more somewhere. This may be true — but how and at what cost, and whether this bounty is to be extended to all or reserved for the privileged few, are not explained.

Taken together, Twilight in the Desert, Beyond Oil, and even The Bottomless Well (albeit unintentionally) add up to a convincing case: no more lakes of oil to be tapped by simply drilling holes. Should we wail and gnash our teeth as energy prices rise and the darkness and cold envelop us? Not at all, argues Mark Jaccard in Sustainable Fossil Fuels.

Don’t be put off by the cover illustration of someone, perhaps Mr. Jaccard, dressed up as a dinosaur and riding a trail bike. The author is not a prehistoric creature, but an economist (they are distinguishable) with considerable experience in energy research and policy formulation. His approach is disciplined and rigorous, and the book is well structured, logical, and eminently readable. No mental entropy here, but a systems view of global energy supply.

Mr. Jaccard sorts energy sources into primary, secondary, and tertiary forms. There are only two primary energy forms continually accessible on earth: nuclear fusion, taking place in our sun and reaching us as its radiation; and the gravitational pull of the moon, which drives the ocean tides. From these come the renewables: hydro (from falling water and the tides), wind, solar heat, and photoelectricity. The secondary energies are the accumulated derivative forms of the primaries: the heavy elements used in nuclear energy generation, created at the time of the earth’s formation; geothermal energy from the same source; and the carbon-based fuels (coal, oil, and natural gas). The tertiary forms are the carriers, which we use to deliver usable heat, light, and power to our homes, places of work, factories, and vehicles. Electricity and hydrogen are carriers; neither occurs naturally in usable form.

As societies get richer, they both need and can afford more controllable forms of tertiary energy, which tend to consume yet more secondary energy (a point also made by Mr. Huber and Mr. Mills). Thus, human energy needs will increase in even the most energy-efficient future imaginable. Mr. Jaccard projects that both world population and energy consumption will level out over the next 100 years (his willingness to explore a long time frame is a major virtue), but not before humanity consumes three times as much energy per year as it did in 2000.

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Resources for Understanding
Energy and Automobiles
Works mentioned in this review.

  1. Alfred W. Crosby, Children of the Sun: A History of Humanity’s Unappeasable Appetite for Energy (W.W. Norton, 2006)
  2. Kenneth S. Deffeyes, Beyond Oil: The View from Hubbert’s Peak (Hill & Wang, 2005)
  3. Kenneth S. Deffeyes, Hubbert’s Peak: The Impending World Oil Shortage (Princeton University Press, 2001)
  4. European Commission, Cars 21: Competitive Automotive Regulatory System for the 21st Century. Final Report (E.U. Directorate General for Enterprise and Industry, 2005)
  5. Kelly Sims Gallagher, China Shifts Gears: Automakers, Oil, Pollution, and Development (forthcoming from MIT Press, July 2006)
  6. Peter W. Huber and Mark P. Mills, The Bottomless Well: The Twilight of Fuel, the Virtue of Waste, and Why We Will Never Run Out of Energy (Basic Books, 2005)
  7. Mark Jaccard, Sustainable Fossil Fuels: The Unusual Suspect in the Quest for Clean and Enduring Energy (Cambridge University Press, 2005)
  8. Amory B. Lovins, E. Kyle Datta, Odd-Even Bustnes, and Jonathan G. Koomey, Winning the Oil Endgame: Innovation for Profits, Jobs, and Security (Rocky Mountain Institute, 2005), Click here.
  9. Matthew R. Simmons, Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy (Wiley, 2005)
  10. World Business Council for Sustainable Development, Mobility 2030: Meeting the Challenges to Sustainability — The Sustainable Mobility Project, Full Report 2004. Click here.
  11. World Health Organization, World Report on Road Traffic Injury Prevention, Geneva, 2004. Click here.
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