Bill Gates, co-founder of Microsoft Corp. (NASDAQ: MSFT), thinks the US should develop a more rational energy policy, invest more in energy research and development, and get lucky. The phrase Gates uses does not refer to luck, though. He prefers “energy miracles,” by which he means a technological breakthrough that would reduce the amount of carbon emitted.
Gates, in fact, worships at the altar of technology, and believes, apparently, that there’s nothing that big thinking and hard work won’t solve. To have an impact on climate change, the US should focus on the “big sources” of carbon emissions like transportation and electricity generation.
This stance is not unlike that of oilman T. Boone Pickens, who has been promoting natural gas as an alternative to petroleum. Pickens, the majority shareholder in Clean Energy Fuels Corp. (NASDAQ: CLNE), forecasted today a crude oil price of $85/barrel by the end of the year. Now he is attacking the transportation fuel emissions problem by championing natural gas. Emissions from natural gas contain about 29% less carbon dioxide than gasoline.
In an interview [http://www.technologyreview.com/energy/26112/] with Technology Review magazine, Gates supports a 1% or 2% tax on carbon as opposed to a cap-and-trade systems, and would use the money to fund basic R&D in energy. He believes that is the only way that an energy miracle will occur. Investors won’t fund that kind of innovation because they can’t capture the full benefit from whatever innovation they develop. Thus, because there is a net benefit to society, the government needs to step up.
Gates has invested in a nuclear power company called TerraPower that is working on a design for a traveling-wave reactor that uses less fuel than current reactors and generates much less waste because it re-uses its own waste repeatedly to continue running. The plant needs to be re-fueled only about every hundred years, compared with about two or three years for a conventional plant.
Gates’s faith in innovation and technology may pay dividends, but only after more years of emissions. Depending on technology alone simply takes too long and relies to a large degree on luck, or as Gates would have it, miracles. Energy efficiency steps, such as better auto engine technology that boosts MPG to 40 or more, may offer only interim solutions, but those are worth a lot while we wait for the miracles to happen.
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