A conversation between William McDonough and Stephan Dolezalek

William McDonough: The Stone Age didn’t end because we ran out of stones, and the Oil Age won’t end because we run out of oil. A cliché, perhaps, but one that happens to be true.

Oil will not end, but the principal current use of oil—for combustion energy—will be replaced with energy technologies that can capture the sun’s benefits in real time: solar, wind, hydro, and also geothermal, with oil used primarily for polymerization and pharmaceuticals.

There are already harbingers of this future—though these are admittedly small in scale. Buildings exist that make more energy than they need to operate. Iceland has weaned itself completely from fossil fuels in its electricity sector by developing its hydro and geothermal assets.

Stephan Dolezalek: I’m not so sure that we will stop burning oil before it runs out. History is not always reassuring on that score. Remember Easter Island? Seems pretty straightforward that you wouldn’t cut down that last remaining tree—but they did.

We humans tend to be much better at discovering new commodities that replace costly and strategic ones—thus the transition of industrial engines from steam to fuels to electric. Similarly, the reign of salt as a strategic commodity ended when we developed refrigeration. Today, the desire to end oil’s life as a strategic commodity is driven by threats of war, terrorism, price hikes, economic instability, climate change, and so on. These are all great reasons to stop burning oil and instead use it for the products that require it, such as asphalt, paint, tires, and pharmaceuticals.

But to stop burning oil, we also need to develop alternatives that people can choose rationally and voluntarily. That means making sure oil’s externalities are fully priced into the cost of a gallon of gasoline and creating a level playing field for other forms of energy.

William McDonough: I agree about the importance of pricing as part of the framework for choice and change. In the last few decades, which were marked by relatively cheap oil, alternatives couldn’t find their financial feet. They were too expensive to be competitive. Now that alternatives are becoming more cost effective, there is significant investment in renewables, even on the part of the oil-producing countries. Masdar, in Abu Dhabi, is a whole new city dedicated to the concept of being carbon neutral; there is also a $250 million associated venture fund dedicated to finding the renewable technologies that will make this possible.

Stephan Dolezalek: As I see it, Masdar illustrates the different dimensions of expensive oil. At $100 a barrel, oil becomes problematic for many purchasers, fomenting instability and heightening economic pressures. For producers, though, the calculation is quite different. So Masdar represents an effort to parlay the boon of high oil prices into long-term economic gains. It’s an interesting play for Abu Dhabi.

Another trend that bears looking at is which countries go first. History suggests that those with less legacy infrastructure to protect tend to be faster adopters of newer technologies. Look at China. Yes, about 70 percent of its power comes from coal, but it has also pledged to secure 15 percent of power from renewable sources by 2020. Having already installed renewable capacity of 152 gigawatts, China is about to become the world’s leading exporter of wind turbines. It is also highly competitive in solar water heaters, energy efficient home appliances, and rechargeable batteries. And in September, the State Grid Corporation of China announced it intends to create a nationwide electric-vehicle charging network.

For the United States, the danger is that it could be left sitting on its old infrastructure as the new technologies kick in—remember how comparatively slow the United States was to adopt cell phone technologies, in large part because it had such a big investment in fixed-line technology. As energy costs become more and more important to GDP growth, the stakes could not be higher. The nations and companies that are most aggressive in adopting renewable technologies and building portfolios of clean power generation will have lower costs of production—and thus a significant competitive advantage.

William McDonough: That’s right, and I believe that with the right economic incentives, the marketplace of ideas is ready to meet the challenge. The opportunity to expand and increase the coherency of the electric system is phenomenal. Sure, there are tough questions: What will happen environmentally on the plains and in the deserts as we deploy wind farms, photovoltaic (PV) arrays, and more? How will we move power around? But from a technological perspective, the postoil future is within our reach.

Stephan Dolezalek: Yes, and it could happen fast. I recently visited with Dr. Bertrand Piccard, best known for having circumnavigated the world in a balloon. He is building a solar airplane that he intends to fly nonstop around the world. I assumed that to do so he would need to use Boeing’s Spectrolab 40-plus percent efficient solar cells, but instead they are using traditional cells with 15 percent efficiency. He says the higher-efficiency cells would actually generate more power than they can use or store! This may sound small scale, but look how quickly aviation went from Kitty Hawk to Lindbergh crossing the Atlantic.

The beauty of thinking beyond oil is that we will see an entirely new age of job creation and economic opportunity. We will do things in more elegant and thoughtful ways. The danger is that the United States is slowed by the fear of losing economic status to companies or countries that are figuring this out faster and going deeper. In global terms, though, moving toward a carbon-free economy could unleash tremendous opportunity.

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