Following is the essay you can designate as Volume 10, Number 40 of This Week's Clue, based on the e-mail newsletter I have produced since March, 1997. It would be the issue of October 8.
Bob Metcalfe has great timing. (Picture from GigaOm's Earth2Tech.)
Metcalfe coined the term Ethernet, created Metcalfe's Law to calculate network effects, he's written an InfoWorld column, and he's become a savvy venture capitalist.
Now he's saying that what I call The War Against Oil is the place to put your money. He even has a Metcalfian term for what will result. The Enernet.
The Enernet is what you get when you combine green energy technology with the network effects of the Internet.
As I've said here, several times now, green energy does not need to be produced and consumed in the way we produce and consume hydrocarbons. Production can be dispersed.
Every home can have a windmill, or several, while every office building or warehouse can sport solar panels on its roof (and vice versa).
Geothermal operations are much smaller, and quieter, than oil refineries, and can be located closer to town. I can easily see such systems locating by sea coasts so they can turn excess energy stores into hydrogen and pipe that into cities for use by fuel cells.
In order for all this to work, of course, our transmission systems must be re-engineered. They have to be able to buy energy from these dispersed sources, they must be able to store what they're not using in the form of hydrogen, and so they also need a network of fuel cell stations to provide extra power at peak times and back-up power at all times. Such a network will be far more robust than our current system -- far less vulnerable to terrorist attack.
There's a lot of money to be made.
Metcalfe is playing some cards which I think will become dead ends. I'm not certain about biofuels, even algae, although Greenfuel's promise to recycle CO2 holds some hope. Metcalfe says he wants to invest in nuclear technology, but that is too expensive, too polluting, and too vulnerable to achieve anything in the near term.
Still, the fact that he's playing is very promising indeed. And it tells me exactly where we are in terms of The War Against Oil.
We're at 1977.
In 1977 I was just getting out of college. I saw my first PC store, a ComputerLand in a Houston strip mall. I was benefiting from, and would soon cover, the Houston Oil Boom, which would come to a sorry end in 1981.
It's the state of the technology at that time that I want to talk about, however. Ken Olsen of DEC had recently made his infamous statement that he couldn't envision any need for a PC in the home. The Apple II was just coming out. Intel was working on 8-bit chip technology, and much of the industry's excitement was over a new operating system called CP/M. The term Internet hadn't been fashioned yet, but there was a government-owned pre-Internet network called ARPANet which a few journalists, like Jerry Pournelle, were using their military contacts to access.
It all seemed cool, new and exciting, but in retrospect it was quite primitive, and it was an elite market of gadget freaks who were driving it. The market was miniscule and only visionaries could imagine what might result. Some saw a utopia, others a dystopia, and the reality has been somewhere in between.
So it will be with The War Against Oil only, given the urgency of
the problem, the potential of the solutions, and the model created by
the PC and Internet revolutions things will move more quickly this
time. There will be more booms, and more busts. More bubbles, and more money lost.
There is no assurance that any particular green start-up will be a winner. Back in 1977 we were seeing a lot of excitement over great companies like Cromemco, Radio Shack, and Osborne -- if you put your nest egg in any of those places you lost it. Smart people, like Metcalfe, are placing bets in lots of places, and hoping a few will come up trumps.
You can still lose a lot of money in green energy. Some booms, like corn ethanol, are already in the process of going bust. Others may never get off the ground. In some areas, like transmission, we're waiting for utilities to get A Clue, which may take years, and we're stuck until they do. Routing around them, as X.25 networks and then ISPs did for the Internet against the phone networks, is going to be hard, but it can be done. It's very possible that those who succeed in routing around the utilities will find themselves swallowed up, in time, as the ISPs were by the phone giants, but that's a long way off.
The political environment for The War Against Oil is also due for a
profound change. Right now the political environment is downright
antagonistic. When the media isn't expressing ignorance it's offering
sanctimony or pandering. Both must change.
What I most want to see right now is a hobbyist market develop, kits people can use to put together simple windmill or solar systems which fire the imagination for kids and deliver small streams of energy for use at the house. This is already happening, on a small scale. The stuff I see seems like toys, but right now, in the near term, that's probably where I'd invest. A green version of Heathkit would be ideal.
One of those things might turn into an Apple II. Or at least a Commodore 64.