Latest / Uncomfortable Conversations with Josh Szeps / Our Spectacular Future of Solar-Generated "Fossil Fuels"

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Our Spectacular Future of Solar-Generated "Fossil Fuels" · Uncomfortable Conversations with Josh Szeps

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  you and I and most of the people we know are wealthier than the wealthiest people 100 years ago.
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  Why? Because of oil. Because we can get oil and get it cheaper. Now burning stuff in the ground
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  has other problems, which is that it builds up carbon in the atmosphere. So what we're working
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  on a terraform is a way of making oil and gas synthetically. So there's no net new carbon going
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  into the atmosphere from the ground. The math and the physics is extremely clear that the cheapest
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  way of getting oil and gas is by synthesizing it using solar power. It might take us another
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  three years or five years or ten years, but ultimately even cheaper than drilling a mile
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  long holes in the ground and fracking the oil and gas out of them.
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  G'day, humans. Welcome to The Safe Space for Dangerous Ideas. How about a slightly optimistic
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  episode for you? If you're a doom scrolling, everything else that might be going on in the world,
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  this is a doozy. It's incredible when you talk to someone who has a real practical but
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  very wide-ranging vision of what is possible for humankind. What we could do as a human civilization,
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  if we just took the tools that we had and actually deployed them, if we overcame our petty squabbles
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  about climate change and energy sources, and if we did away with regulations that were written
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  in the 1970s to impede development, there is now the possibility of using solar arrays,
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  which are now so cheap that you could carpet them across the land and power, not only people's
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  electricity in their homes, not only factories, especially if you deployed localized solar arrays
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  on the site of a big factory or a mine or a smelter, but also there is the possibility of using
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  solar energy to extract carbon from the atmosphere and turn it into hydrocarbons, which you can then
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  use in aviation and shipping and in the manufacturing of plastics and all the things that we actually
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  need fossil fuels for, but it would be carbon neutral because the carbon that they produce would
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  then be being sucked up by the process of producing those fossil fuels. It's an incredible field of
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  research not to mention the fact that artificial intelligence data centers are going to be hoovering
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  up massive amounts of electricity that we are not planning for right now. At the coalface of this
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  working in California is the founder and energy entrepreneur of terraform industries. This is
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  an Aussie guy. He got his PhD in astrophysics, I think, at Caltech. He's worked for Elon Musk at
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  Hyperloop. He's worked for NASA at the Jet Propulsion Lab in California and he has a huge brain
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  with incredible ideas and he's got this startup which seeks to do what I just articulated. Turn
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  basically sunlight and air into cheap, abundant hydrocarbons for every man, woman, and child on
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  the planet. I hope your brain is tickled as much as mine was by the one, the only Casey Hanmer.
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  Well, I just want to make sure that the audience understands just how God I'm had some joshes via
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  Riverside. I think it's very true. I mean, it's such a shame. It was a tragedy that I was in radio
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  for all the years that I was because although my voice is also succulent and beautiful and
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  fuckable, it's not as good as this mug you're looking at. Yeah, exactly. What a waste. Well,
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  thanks to the one as the internet. Here we are. Okay. So you were saying you were listening to
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  before we said this tape, you were saying you were listening to some of my shows presumably as
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  research for this. Yeah, because I'm unfortunately, and I've been a bit slow on the uptake when
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  it comes to the Australian podcast circuit. Obviously, Joe Walker and I go way back now. But yes,
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  it was thrilled to get inbound from you and then to, oh, I've got five million back episodes
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  together. And of course, you've had some real interesting faces on. I'm in my late 30s and I
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  grew up in New South Wales. And so Bob Carr was a fixture of the political establishment when I was
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  kind of coming of age and first time to reduce papers. And so it's fascinating to have him on.
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  And of course, I've read his memoir Diabre Foreign Minister. Anyway, it was I was just thinking
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  he was the for people who haven't heard that he was the former Foreign Minister of Australia and
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  the former and the premier of New South Wales. It's topping us state between 95 and 2005, I think.
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  I've never been in personally. He sounds like a very interesting guy. Glad you know that off the top
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  of your head because I just listened to your podcast. Yeah. Well, this is great. You're getting all
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  of the information from me that I myself don't know. So this is like a virtue. It's basically a
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  circle jerk where I give you information and then you give it back to me in a mode in which I can
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  actually ingest it. Yeah. Two people. Yes. Not much of a circle. It's a straight line, a straight line
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  straight line, Jack. That's great. Yes. No. So Bob Carr. And I don't know if you heard. But anyway,
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  before we get sidetracked on that, you were saying that you've got to be in your bonnet about
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  submarines from listening to my show. Yeah. It might not have been the Bob Carr show, but
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  you know, I kind of set up and took notice when the whole orchestra happened. And of course,
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  I was coming advantage of the deal for Australia to pay the UK and the US a fortune for a
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  nuclear submarine collaboration that many defense experts think is full hearty.
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  Yeah. Well, I was not prepared to the conversations, but it seems to me at some point a decision
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  was made to retire not just the Collins, but also the Collins class of technology and move towards
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  nuclear power plant for submarines, which is something that I've been incidentally obsessed with
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  for many years. But you know, this is kind of an interesting question, which is like, you know,
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  Australia is a wealthy country, a technologically advanced country with, you know, rule of law and
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  democracy and so on and a country of, you know, 25 million people or so. So like it just kind of
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  right off the top, it's it's much larger, much richer natural resources, much richer financially
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  and much more kind of strategically stable than say Taiwan. And yet somehow Taiwan has a
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  stranglehold on the world's supply of the most advanced technology humans even know how to make.
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  And at the same time, Australia is turning around and saying, well, I don't know how we feel about
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  whether or not absolute national sovereignty should be a policy that we pursue in the 21,
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  you know, the 2000s and so on. And to what extent will our kind of defense posture revolve around
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  two kind of fading empires on the other side of the world, which is strikes me as ridiculous
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  because it's not that hard to build submarines. Yes, it is not easy, but it's not that hard. We
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  already have a functioning submarine design. And the United States built the world's first
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  nuclear powered submarines in less than four years in the 1950s with less money than the United
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  than Australia currently, currently loses to fraud in its various, you know, welfare programs.
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  So, so it is something that Australia could afford to do. And it's not the sort of thing
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  where we need to kind of wait five or 10 or 15 years to get to the front of the queue on the
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  Virginia class fast tax submarine if we such is. So that's, you know, and I think, you know,
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  I'm a Australian American now, I'm a American citizen too, but I think that
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  pieces assured when potential bledirons have to think twice, right? And I think that John Howard
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  was absolutely correct. In the former Prime Minister of Australia, when he said that during the
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  the kind of conflict that occurred over the separation of East Timor from Indonesia in about
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  1986, the fact that Australia had the F11s, which were, you know, supersonic capable heavy bombers,
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  was determinative in his view. I think, and I may be mistributing this to, to their not being
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  an expansion of that conflict, which for a hot minute there looked like it was going to turn
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  very, very hot. And so, yeah, I think like, you know, Australians are wealthy, peace loving people,
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  and we absolutely can afford to peel off a few billion a year to make sure that we can remain
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  that way forever. I mean, I suppose there isn't the fear that it wouldn't end up
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  testing a couple of billion dollars a year that there were all kinds of regulatory and political
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  reasons why the cost would blow out, and it would end up being a white elephant, and that's what
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  all the politicians fear, so they don't have the courage to do it. Yeah, I think that that's probably
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  the most likely outcome, but it's by no means guaranteed, right? And I think if you say that's
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  the most likely outcome, it's also this, it's also kind of conceding that the most likely outcome
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  is that Australia ends up as a protectorate of a more powerful Asian-based power. And,
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  and you know, I think, you know, we ran that flag up the flagpole in 1939 and decided,
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  no, actually, we'd rather not, and the diggers went and defended Australian territorial integrity
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  and sovereignty and cocoder amongst other places, and fought with a bare fraction of what we could
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  even imagine. I mean, like, I can walk down to the local Walmart here in Los Angeles and buy
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  more weaponry than they had available to them in that in that battle. On either side.
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  And America. Yeah. But, you know, it's literally just down the road here. I can go and buy,
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  you know, absolute treasure trope of weapons. And I think that that, you know, Australia should be
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  damn serious about making sure that, you know, we don't have to go and build a fleet of aircraft
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  carriers to fight yesterday's war, but we do need to make sure that we're, you know,
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  positioned to oppose the sort of thing that has destroyed the lives of so many Ukrainians,
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  for example, in the last few years, because, I mean, sorry to interrupt Casey, but don't you
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  think that the rationale for, and without, we won't get bogged down in defense for too long,
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  because there's so much that I want to pick your brain about. Yeah, I don't know anything about it,
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  but don't you, you're so knowledgeable on such a wide range of areas. We're talking about the
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  one thing on which we're both amateurs, but it is interesting. I might have been Sam Rodervene's
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  chat that you got you angry about. Okay, so I don't know. Do you know Sam? No, I haven't listened to
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  that one, but I can get angry about it. Listen to that. Get angry about that because he's,
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  he's anti-Orcus, and he's written a book called The Akidna Strategy, saying that Australia's
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  defense should lie in being like an Akidna, which is sort of like an Australian kind of hedgehog,
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  you know, prickly on the outside, but sort of squishy and inoffensive on the middle.
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  The defenders of the of the Orcas of a nuclear alliance with the United States and the UK would say
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  that being a protectorate of a big Asian power is precisely what that is trying to avoid,
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  and that the only reason why Taiwan, I mean Taiwan isn't safe only because of
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  semiconductors. Taiwan is safe because of it's the supposed promise that America has or the
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  strategic ambiguity that America has that it would defend Taiwan. So isn't Australia just sort of
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  pursuing the same strategy? Have big powerful friends? Well, I mean Australia is not currently,
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  like it's not currently the policy of the CCP that Australia is a renegade property. No,
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  this is, this is fortunate. Well, yeah, but I mean, you know, opinions can vary. The Japanese
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  minted a special currency just for Australia, after they conquered Australia, right? And enslaved
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  Australia's populace as they had done to the rest of Southeast Asia. I bet that would have been
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  real fun. In World War II. In World War II. Just to clarify for people, the Japanese got all the way
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  down to, you know, right around Australia and that. They bombard a successful intention of taking,
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  yeah, yeah, and certainly, and they had submarines since any hour, but I mean, they had actually
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  successfully occupied basically the entire swath of Asia all around right up to the edge of Australia.
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  Yeah, all the way through the, and Australia was the next step. Yeah. Yeah, did not go so well
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  for them in the end. But the point I'm trying to say is in the grand scheme of things, having an
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  unanswerable fence posture with, you know, a combination of drones, aircraft submarines and other kind
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  of very hard to kill targets is exactly when we need a kidnap. It's like, yes, we're very friendly
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  and we're very cute. And we look great on a 500 piece. And don't fuck us. Yeah. Yeah. Yeah.
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  Well, you can just don't fuck with us. Yeah. Yeah. Yeah. Yeah. Yeah. Yeah. I mean, you can't
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  really, you know, I think it's really important. I know plenty of Chinese people, you know,
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  do they want their sons and daughters to go and die in a war against against, you know, against the
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  yanks and against Australians? Of course not. They're not crazy. They just want to get rich like
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  anyone else. So, so really it just comes down to convincing a handful of like old nearly dead men
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  that like, just take, just take the W and like get on with life. And the way you do that is by saying,
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  okay, we'll peel a couple of billion off the top each year and just make sure that like we look
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  like a hard target. But like right now, right, like, like Australia, like, it's not that hard to
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  build a nuclear submarine for the second time, right? Brazil is in the process of building
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  nuclear submarines right now. Brazil, right? I know they like to build like craft and stuff.
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  They know such as technologically and such country. But like, they know when you're as wealthy as
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  Australia is, right? Australia is as wealthy as the United States was when the United States built
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  the first nuclear submarines. We have to figure out in the United States how to do it for the first
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  time from scratch. Like, no one had ever built nuclear power reactive before. They built the first
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  one and they stuck it in a goddamn submarine and then drove it around for a while. Like, actually,
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  submarines still exist. So it's not that hard. And anyone who says I was going to take 15 years and
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  11 trillion billion dollars isn't serious because if that's the case, then how the hell did
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  recover managed to build one in a thousand days from scratch? Right. And then when you say
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  where as rich as the United States was in the 50s, we, you mean the entire country probably has
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  the same GDP as the United States did in the 50s because per capita, we must be way richer than the
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  U.G.P. per capita on a per capita basis. Well, we must be richer than Americans were in the 50s.
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  On a per capita basis, yes. But at the same time, you know, the United States is doing a lot of
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  different things in the 50s. It's also possible that the Australian economy today is as
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  large as the U.S. economy was in the 50s. I doubt it. I would. Yeah. But yeah, maybe someone
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  can write in. Yes, write in. They only probably had a hundred million, 150 million people and they
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  were probably a third as wealthy as modern people are. I mean, I wouldn't be surprised. Anyway,
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  it's probably ballpark and it's certainly something that we could do. Okay. I need on hold music
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  here. I need like the Japanese music. $4.2 trillion nominal GDP
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  1950 in the United States. So I think that's somewhat larger than the Australian economy today.
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  Google the Australian GDP in U.S. dollars. $1.75 trillion. Okay. A little more than twice.
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  Yeah. Yeah, but it's kind of a material because the United States turned around and they went and
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  built hundreds of fast-tech submarines, nuclear, and then they built the boomers and then they built
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  nuclear aircraft carriers and nuclear destroyers and then they built ICBMs and
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  stirrel nuclear weapons on top of that. So like, Australia does not have to do all that. We just
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  have to have an unanswered. That's right. You will not be able to block eight airports, right? Or
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  you might not be able to block eight airports. Yeah. We also don't even need, I mean,
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  in case we don't even need nuclear weapons. I mean, if the sticking point is we don't have
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  experience in building nuclear stuff, which is also not true because we do have a couple of
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  and nuclear reactors here to produce medical devices. But if that is the sticking point,
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  you only need nuclear submarines if you want to go a long, long way away on these very,
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  very long voyages which might take you up to Taiwan or whatever. If you want to just defend
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  the Australian mainland and then you can just build a whole bunch of conventional submarines
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  and drones and stuff and that's more than adequate and we certainly know how to do that.
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  In practice, you have to have the ability to patrol the straits of Malacca, right?
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  If you're going to be a meaningful part of a regional defense initiative against, let's say,
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  the East Asian adversaries. But yeah, I mean, what do I like? Like, I'm one of these people who
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  says nuclear power is great. I used to teach nuclear physics at Caltech, but nuclear reactors are
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  only really useful for submarines. That's like the one thing that they're the killer app for.
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  And they're a bargain. They're a bargain for that application. The fact that you can go out and
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  buy a Virginia class fast-track submarine for $1.7 billion is like, what a bargain? Like,
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  absurdly advanced piece of technology. And what it allows you to do in the difference that makes
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  it much better to be like, oh, well, we built all these submarines and we ran them for years
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  and it turns out we didn't need them water waste of money. Like, that is such a better situation than
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  like, oh, well, we're now founding ourselves in the same position as the colonized people
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  that live in Western China, right? You're like, living camps and assembling stuff under conditions
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  of slave labor and an allowed-hand children. I'm voting against that option. I don't want that
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  for my kids. How children would hate us? Yes, how children would, I mean, it terrifies me anyway
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  that the Orcas deal relies on a future US administration. Like, they have the total right to withdraw
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  from the deal for any reason and keep the money that we've already paid and not give us the submarines.
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  If for any reason, they think that US security needs those submarines and their capacity of
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  building is also glacially slow in comparison to their own needs, level-own-hours. It's entirely
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  possible at the whole. The American shipyards are also in their trouble, same problem. Yeah,
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  it's entirely possible that we'll just end up with nothing and we'll completely undefended
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  between 2030 and until we get our shit together. Well, there's a thing. And if you say, okay, well,
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  okay, like, we've got these shipyards in South Australia and we've got an able and well-trained
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  workforce and we have the ability to print money. Like, let's go and start building our own system.
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  And yeah, you could have, like, if it took time and recover, and his team,
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  less than four years to do it for the first time ever in 1958, like, you could say,
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  do it in four years and I don't see why it couldn't be done in four years. I'm just saying, like,
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  in principle, like, the technology's already understood. You probably buy a second hand one off
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  the Russians if you ask nicely. I mean, like, somehow the Soviets figured out how to build this
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  and the Soviet GDP at the time is minuscule, right? Yes. Okay. Yeah. I mean, forget it when our
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  comparison about the, you know, the Australian versus US GDP even though we have one-fifteenth
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  the population back in 1950, the Australian GDP and the Russian GDP, I think Australia's economy
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  is bigger than Russia's. Or it's about the same. There's another one for you to Google. What's the
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  Australian? It was launched in 1957. Okay. So what was the size of the size of Soviet economy
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  in 1957? Probably hard to estimate because it was a controlled command economy.
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  $300, $400 billion. Wow. So a fifth of the size of Australia's economy today.
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  That's probably the economy of Sydney. Or maybe New South Wales as well. But yeah, I spent a bit of
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  time in Russia when I was a younger man and like, that was 20 years ago now, 15 years, but like,
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  it's really in some ways it's the place of time for God. Like, life sections of the country are
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  still as poor as they were in 1998. But it's absolutely astonishingly deprived place.
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  Okay. Enough about submarines. Incidentally, what are you using to do your research when you're
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  looking up those numbers? I was just googling it. So probably Gemini was throwing some numbers in it.
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  Yeah. Okay. All right. Thought you might have some highly sophisticated AI that you use for
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  purely data purposes. I suppose to some second rate second tier system like Gemini. Yeah, exactly.
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  Some bullshit. Whatever Google can throw up at you out of the dregs of the internet.
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  You said something a moment ago that some people will have raised their eyebrows at, which is that
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  you know, when you're when you were teaching nuclear physics that was a Caltech or
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  Amazon at Caltech, the only good use of nuclear technologies in the submarine. A lot of people
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  who are worried about the climate think that you're always going to need base load power from
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  nuclear or coal or something like that in spite of solar. This is something you firmly disagree
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  with. Why do we not need? You know, what is the, are we misunderstanding something about the concept
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  of base load power? Yeah, I mean, I think that there's there's also different tribes and
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  and they all have their their favorite method of of powering stuff. No, I think if you want to
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  you want to look at an economy that went all in on nuclear, you could look at the French economy,
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  right? And the French have obviously valued strategic independence from the United States since
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  the mid-1950s as well. And they've got their own nuclear submarines and nuclear missiles
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  because they end up taking any more chances. I'll put it that way as as Australia shouldn't.
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  But you know, their economy is largely powered by nuclear power and as a result, like they're
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  they're going great in Europe right now by comparison to to the other countries that don't have
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  that energy. But at the same time, they're not well positioned to ride the wave of of
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  cheap power from solar. And actually, you don't have to take my word for it. You can just look at
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  the scoreboard, right? So, so currently, like global solar PV manufacturing capacity is about 1.4
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  terawatts per year, which is all things being equal like about the same size as the global
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  nuclear fleet. But once you take into account utilization factors. So, nuclear fleet meeting all
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  nuclear power or just nuclear submarine fleet? Oh, no, all nuclear power. All nuclear power at all
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  solar is about the same, you're saying? Yeah, so it's by 460 gigawatts globally of solar, sorry,
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  of nuclear. And the global solar fleet is much larger than that now and it's growing by more than
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  that every year. Like so it's the market in its infinite wisdom has decided that the solar is
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  where it's getting its future electrons from. I read today that the Europe gets more power from
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  from wind and solar than from from fossil sources. California now gets most of its power from
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  but more of its power from solar than any other source. And obviously China is building everything
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  it can get its hands on. But solar is definitely winning in China as well.
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  Right, but I mean, that just shows us the direction that we're going in from a fossil fuel based
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  economy. I'm sort of asking about the question that the criticism that so yes, there may be an
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  enormous number based on unused capacity of solar, right? But once you get up to, I don't know,
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  80% solar, then you're still you've still got this problem of what happens when the sun doesn't
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  shine and the wind doesn't blow. You're always going to have those moments where there's peak power
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  everyone gets home at 5 p.m. on a hot day turns on their air conditioning or whatever. And
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  yeah, the sun is famously unreliable. Sometimes if biblical accounts have been believed to
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  just doesn't shine. You know, this problem is solved. This problem is solved. It's batteries.
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  It's always batteries. People say, well, you know, are you telling me that in the future, every
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  man or woman in a child in the United States is going to have like the equivalent of an entire
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  kilogram of lithium ion battery also themselves. That's unimaginable. But if you if you'd spoken
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  to people in 1995, that's what they would have said because back then lithium ion batteries
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  were an elite product for high performance handicams. But nowadays, you know, just in my family,
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  we have multiple electric cars and powels and things like that. So like you just say, well,
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  you look to the future and you draw the line on the graph and you say, well, yeah, there'll be a
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  time when when the per capita allocation of lithium ion battery is about a ton ton per person
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  and no one has any shortage at all. And I mean, am I am I making my am I losing sleep at night
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  that like the rechargeable lithium ion battery pack that I have on my toy drone isn't being fully
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  utilized at all times? No, I don't even care. These are commoditized products. The price per pack of
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  of lithium ion and sodium ion batteries is fallen by 60% in the last 24 months. Just read that
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  yesterday. So back when I was a young engineer a few years ago, 10 years ago now, batteries are
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  coming down by about 5% per year in terms of price. And we're like, well, I'll take 5% per year.
• 23:01
  That's pretty good. Yeah, in terms of like free improvement, thanks to the market. But now it's
• 23:06
  more like 20% 30% per year. So it's yeah, we're hitting the big leagues. We're hitting the big leagues.
• 23:12
  Is there is there any engineering limit or resources limit in terms of rare earths or anything like
• 23:18
  that on flooding every human, every man, woman and child in the world with massive battery capacity
• 23:22
  indefinitely? Not compared to like half human vanadium supplies for a nuclear power plant or
• 23:28
  something like that. Lithium is the third most common element in the universe. Solar panel is
• 23:32
  made of silicon, which is the second most common element in the Earth's crust after oxygen.
• 23:37
  There's no shortage. There's no shortage. Because you could say, well, you know,
• 23:43
  solar panel is, I don't know, like the thickness of a sheet of paper or something like that.
• 23:46
  The thickness of two sheets of paper. Okay. Is there enough silicon in earth to make that? Well,
• 23:50
  the entire crust of the earth is made of silicon. It's a lot of sheets of paper.
• 23:55
  100 kilometers of rock under your feet. And then under that, you've got another thousand kilometers
• 23:59
  of like silicate, rich, gooey, mantle rock. Right. There's no shortage. Don't worry. We'll be able
• 24:04
  to pave the entire world solar before we, before we even think about running out. And actually,
• 24:08
  it's kind of the scary outcome because it seems to me that that actually the downside is not,
• 24:13
  oh, no, what about baseloid, which is just a made up thing, right? It's like, oh, what if we build
• 24:18
  these AIs that like generate a thousand times more GEP per acre of land that's under solar panels
• 24:23
  than we derive from eating like food that's grown on the same land, right? Do we have a plan
• 24:28
  to avoid having like the marginal acre of a, of farmland being converted to, to, to solar to,
• 24:34
  to feed the, to feed the AIs? And I don't think this is a problem that's likely to occur in the next
• 24:39
  five years, but we may want to think about this in the context of like long term land usage on
• 24:43
  the surface of the earth just to be clear. We can supply the entirety of human civilization with
• 24:47
  US levels of, of fossil fuel profligacy using synthetic fuels like what we're doing at Terraform
• 24:52
  with, yeah, without changing surface land use at all, really, like we'll probably take a bunch of,
• 24:58
  bunch of core nethanol land out of production and actually net reduce the amount of land
• 25:03
  that humans are using. But if you want to power a AI based economy with a billion times more GDP
• 25:09
  than we currently have, then it's going to be a very different looking earth.
• 25:13
  Right. And I mean, I presume that what you're saying is that if, if it's, if the, the profit that
• 25:21
  an, I mean, if the profit that can be generated from a square mile of land that is covered in solar
• 25:26
  panels, which is powering AI is massively more than the amount of money that people can get from
• 25:30
  farming that land, then either we're going to have food shortages or foods going to be very,
• 25:34
  very expensive. Well, that's the same thing. I mean, they say there's no such thing as shortages
• 25:39
  under capitalism. The price just, you know, reflects, reflects the balance in supply to man. Yeah,
• 25:43
  which is, which is not a, yeah, it's a difficult situation. Potentially. Just paint out this vision
• 25:48
  for us because for a lot of people that we're hearing it for the first time and scratching their
• 25:51
  heads a little bit about thinking about that amount of land devoted to solar panels and a lot of
• 25:55
  people we're thinking, well, obviously that's not going to happen. We don't have that much land.
• 25:59
  Where is it all going to go? Why do solar panels really need that much space? How much energy we
• 26:05
  are talking about these AIs actually hoovering up? Can you just sort of step, take a step by step
• 26:10
  through from here to the scenario in which AI is that energy hungry that our solution is to put
• 26:18
  turn Nevada into one giant solar panel? Well, now I'm getting excited. I know you have a fetish
• 26:25
  for coating, coating Nevada in the solar panels. Just to kind of paint you into the picture here.
• 26:31
  Something like 29% of Earth's surface area is land, the rest being ocean.
• 26:37
  And of the land area about 1% is like significantly modified by humans, like urbanized essentially.
• 26:43
  So if you live in Sydney or Los Angeles or New York, you'd be used to kind of just seeing the
• 26:46
  seething urban hordes. But if you ever make a mistake of looking out the window while flying
• 26:51
  from Los Angeles to pretty much anywhere, you'd be like, oh, wow, there's a bunch of desert
• 26:54
  out the window. And then an hour later, wow, there's still desert out the window. And like no one
• 26:57
  lives there. And you could just like, yeah, I mean, try flying from Sydney to, I just got back from
• 27:03
  Bali two days ago. Okay. So from from from broom to Sydney, that's you are, you know, you leave
• 27:11
  Bali and in an hour and a half you hit the Australian coastline and the remaining six hours of the
• 27:15
  flight is nothing is just nothing from essentially it's like to an American is like flying from
• 27:21
  Portland to Miami, basically, but there's nothing in between. Yeah. You could throw fistfuls
• 27:26
  of ball bearings out the window the whole way, right? And you'd never hit anyone. I never
• 27:29
  hit anything at all. It usually be very considered very inadvisable to like throw fistfuls of ball
• 27:33
  bearings off top of a tall building or something, right? But you could you could be very responsible
• 27:38
  about it on an airplane on this route. And you never hit anyone. This is plenty of land. And
• 27:42
  then something like 20% of earth line surface areas devoted to farming of which about three quarters
• 27:47
  is is pasture and the rest is row crops. And maybe another 20% to forestry about 30% of earth
• 27:51
  line surface areas uninhabitable uninhabited deserts. And about another 10% is mountainous or swamps.
• 27:57
  So like something like half of earth line surface areas is currently like almost no one lives there,
• 28:02
  almost no one lives there. Unless it happens to be like a lot of oil there or something like that.
• 28:06
  But even then like the population of say the UAE or something is still small on a global scale.
• 28:11
  And don't be wrong. One day I would love to irrigate these places and make them much more
• 28:15
  habitable for humans. It's mostly about a water shortage rather than a temperature thing.
• 28:19
  But almost no one lives there. And so you can have this situation where you can provide all the
• 28:23
  power that all our cities need with just rooftop solar and parking lot top solar. So that's just
• 28:28
  enough. There's enough solar to provide all the power that the city currently uses. That's mostly
• 28:32
  for air conditioning in summer and heating winter with some batteries to handle the evening peak.
• 28:37
  There's a fellow who's been doing daily simulations on the Australian grid for going on six
• 28:44
  years now that basically shows that you can quite easily do this. Then for synthetic fuels,
• 28:48
  if you want to have the ability to fly like super sonically across oceans and stuff like that,
• 28:53
  you need quite a bit more energy. It's about a 10x increase. So you end up taking a couple maybe
• 28:58
  two or three or four percent of total of earth line surface area, which is like the areas outside
• 29:03
  cities and putting that under solar. And then that provides all the energy you need for synthetic
• 29:08
  fuels. And you're done. Let me just pause there. Because some people will be hearing the word
• 29:13
  synthetic fuels for the first time. The point is that a battery might be all very well to air
• 29:19
  conditioning your house, but the power that a triple seven needs to get off the runway and fly
• 29:23
  from city to Los Angeles is too much for a battery to plausibly pull off. So you still need
• 29:31
  something like aviation fuel. And what you're saying is you don't have to dig that out of the
• 29:36
  ground. You can take the sun's energy and you can just make a synthetic or artificial
• 29:41
  concentrate that performs the same way as. Well, you make it's exactly, chemically, it's exactly
• 29:46
  the same, right? Arguably slightly better. And most likely, I think high performance future
• 29:52
  aviation will use liquefied natural gas, which is the same fuel that SpaceX uses in the Starship.
• 29:57
  As a fuel, LNG, we send it out in ships across the world these days. And it's just even,
• 30:03
  it's even, well, I mean, entire mass density than energy density per mass, then,
• 30:10
  then, then, then, then, then, you know, jet fuel. And it's cryogenic, which can be helpful,
• 30:15
  cooling at extreme speeds. But yeah, can you make liquefied natural gas synthetically,
• 30:19
  or is that always? Yeah, yeah, for sure. That's actually the easiest thing to make. So we're working
• 30:22
  on natural gas here at Terraform. We're working in liquids as well, but that'll be it. It's a little
• 30:25
  harder to do. Yeah, this is kind of the size of the point. The problem, the problem with aviation is
• 30:29
  like, people don't have a very good conception for just how much fuel goes into airplanes. And,
• 30:35
  and how, and how thirsty they are. So if I'm, if I'm flying to Sydney from Los Angeles,
• 30:40
  which is about a 12 hour flight, my seat's consumption of fuel, right? There's like, I don't know,
• 30:44
  400 people on the airplane. My personal consumption of fuel on that flight is like 500 liters. It's
• 30:48
  like a thousand pounds of fuel. It is absolutely absurd amount of fuel. Like, I could drive a
• 30:52
  hammer, and it would make almost no difference. If I fly back and forth to Australia a couple of
• 30:55
  times a year, I could drive a previous or a hammer makes no difference. So just a reference,
• 31:00
  that's like five or six bathtubs worth full to the brim of, of kerosene, just to get my,
• 31:06
  my sorry ass one way across the Pacific Ocean. It's what a fabulous fabulous material kerosene is
• 31:13
  that allows you to do that, right? That you sit in in moderate comfort in an air-conditioned cabin
• 31:19
  on the edge of the atmosphere, flying at almost a speed of sound across the ocean that spans half
• 31:23
  of the planet for, for a measly 12 hours in the bam, you're in Sydney. Just as, as an, as an aside on
• 31:28
  this case, because I was talking to my kids about it when we're on the plane, I was explaining to
• 31:31
  them that the wings are a full of fuel that the, that they store the fuel mainly in the wings,
• 31:36
  and then under the, where the wings meet the belly. And I was explaining that I think I can't remember
• 31:41
  the statistics. I'm sure I'll get it wrong, but it's something like when the plane is taking off,
• 31:45
  when a fully laden triple seven or seven forty seven or eight three eighty is taking off,
• 31:50
  it's something like 14 garden hoses on full blast, a fuel that are being burned.
• 31:58
  It might be, like just imagine a garden hose turning it on. It's a lace like, it was like eight or
• 32:02
  four, but it was, it's, it's that amount of fuel. Yes, like half of it. And we're challenged for these,
• 32:07
  yeah, and the challenge for these ultra long flights, some bit of a plane nerd as regular listeners
• 32:12
  will know. And Qantas is launching these ridiculous flights later this year, which are going to
• 32:16
  be the first time that Sydney is connected, nonstop to London and to New York. And the reason
• 32:23
  they have to get Airbus to build an entirely new plane for them. Well, I modified a 350, but
• 32:28
  it's an entirely new version, specifically just for the Australian airline, because they're the only
• 32:33
  ones crazy enough to think that there's a market for people to pay a premium for this.
• 32:36
  Well, it's the only place because if you end of the world, that's true. The only place where
• 32:40
  there are rich people at the end of the world. There you go. And the, the, the challenge is that once
• 32:44
  you get up to a 12, 13, 14, 15 hour flight, maybe 16 hour flight, maybe 17 hour flight, the fuel that,
• 32:52
  you know, that the plane is going to be using in the final hour of the flight. Yeah.
• 32:57
  Has to be carried all the way until it gets to be needed. And there becomes this incremental point
• 33:03
  where after about like 15 hours is just not worth it to be adding an extra hours worth of fuel,
• 33:09
  because you then need to add more fuel in order to carry the weight of the extra fuel that you're
• 33:14
  going to need. So these are going to be 22 hour flights, non-stop. And then, and all of those,
• 33:20
  that final hour of fuel, they have to then load a whole bunch of more fuel on in order to carry the
• 33:25
  final hours fuel for 21 hours. Yeah. It's a rocket equation. It's the same, it's the same reason
• 33:31
  you need to stage rockets when you launch to space. Right. Well, the rockets have to bring their
• 33:35
  oxidizer as well. So it's even worse. Yeah. I mean, it's, it's just the nature of the beast.
• 33:39
  There's no two ways about it. I mean, you could design an airplane that can fly all the way
• 33:42
  without, without having to fly low and slow. Or you can just fly really slowly, right? You can,
• 33:47
  you can save that fuel by adding another three or four hours to the flight. Just doesn't, doesn't,
• 33:51
  the economics aren't, the economics say, like just add another fuel tank and, and be happy about it.
• 33:57
  Yeah. It's kind of nitric. You're flying. There's a, there's a, there's a crazy guy,
• 34:01
  just up the road here many, many years ago, who built a couple of airplanes that flew all the way
• 34:05
  around the world on the single-take of gas. You know, the whole way around. Right. So I mean,
• 34:11
  what was the, what was the weight of that? What was the weight of the plane? I mean, he wasn't, presumably,
• 34:15
  wasn't carrying a small plane. He said fuel on takeoff. Yeah, like an egg shell. Yeah, right.
• 34:19
  Just just two, two desparados flying for three days, non-stop and, and yeah, beautiful aircraft.
• 34:24
  It's in the Smithsonian. The return of it. It can be done. And of course, I'm very excited about
• 34:31
  supersonic aviation. So instead of, instead of taking 22 hours to fly slowly to New York or
• 34:36
  to London, you could take, you know, maybe eight hours to fly with one, one stop in between
• 34:41
  the whole way. So you don't even get jet lag. Just before we leave supersonic, can you get around
• 34:47
  the sonic boom for the people on the ground as you fly over them? Yeah. I mean, part of the answer
• 34:53
  to that is that, is that most of the world has no one on it at all, because it's ocean. Right.
• 34:56
  And most of the land doesn't have very many people on it either. And so like that, that doesn't
• 35:01
  really matter all that much. And then you can kind of play some games around speed and shape of the
• 35:05
  wing and so on to reduce the boom. And then I think for the rest, you just say, wow, sonic boom,
• 35:11
  that's so cool. Right. One of the major problems that building modern supersonic aircraft is actually
• 35:16
  not the noise of the boom. It's the noise of the jets on takeoff. So I don't know if you ever saw
• 35:20
  Concorde. I saw Concorde flying and I was sitting here a few times when I was a kid. It was loud.
• 35:24
  Right. It was loud. And under modern like, you know, airport noise regulations, you couldn't,
• 35:29
  you couldn't build and certify a Concorde. So that's actually the challenge. So you end up in
• 35:34
  this situation where like the performance of the aircraft is compromised by like, oh no, you can't
• 35:38
  be too noisy for the, I don't know, seagulls live at the end of the airport. Come on.
• 35:43
  I assume it's for the old ladies who are living at the end of the airport runway in apartments.
• 35:49
  Let's give them a free fly once a year. This is so cool. It's true. Okay. Yes. So solar panels,
• 35:56
  coating, Nevada in order to fuel our AI overlords. Yeah. Well, it means the obvious place to put them,
• 36:02
  right? Because the AI's don't care if they live in the desert, whereas humans mostly prefer not to.
• 36:09
  And then they can talk to us at the speed of light with optical fibers or styling. So it makes
• 36:13
  sense to kind of put them in the places people don't want to live. And now SpaceX actually just
• 36:16
  announced their merge with XAR. So they're going to be building massive data centers in space,
• 36:20
  which is another kind of moving that direction. And just to clarify, you would build a data center
• 36:27
  in space so that the solar power is doesn't have to go through the atmosphere and is more powerful.
• 36:32
  Or why? Yeah. The solar resource is a bit better in space. Is it is it as good compared to like
• 36:37
  the difference in shipping costs? No. Rockets are really expensive compared to tracking something
• 36:41
  in the middle of nowhere and plugging it in. But if you are company like SpaceX and you are already
• 36:46
  sitting on a kind of massive launch capability that's set to expand further and your like first pass
• 36:56
  at what's a like, you know, kind of infinite demand solution for infinite launch that we can
• 37:01
  launch and create money with, which is Starlink. And you're already looking at saturating demand
• 37:05
  for Starlink, which they're they're not quite there yet, but that Starship will the giant rocket
• 37:09
  will do that pretty quickly. You need something else, which can basically slow up solar power in
• 37:14
  space and convert it into high value data that you can then send back to Earth with microwaves.
• 37:18
  Now, it turns out that, you know, while internet data is pretty valuable, you can charge
• 37:22
  enough money that that's SpaceX is on track to make over 10 over 10 billion dollars a revenue
• 37:25
  this year that AI tokens are probably about a thousand times more valuable. And so it's just a
• 37:32
  it's a very interesting business, right? Because you don't want to end up in a situation where you
• 37:34
  spend 10 billion dollars building a gigantic rocket and then no one is available to fly on it.
• 37:39
  Right? No one wants to fly on it. So you've got to make sure that you can you got both sides of
• 37:43
  this business ready to go. So I think that's the main push there. I don't quite get it, Kasey,
• 37:47
  because why wouldn't you just wouldn't it be, isn't the fuel that you need to get it into
• 37:52
  space more expensive than if you just put a lot of a lot of batteries on the ground or something?
• 37:56
  Like, yeah, well, the data center probably. Yeah, the data center and the batteries on the ground
• 38:01
  and then just fire the fire via the internet into space and then back down via Starlink,
• 38:06
  what do you gain by placing the data center in space? So you could say, why don't I just take
• 38:10
  one of these fancy Starlink data centers and I just put it on the ground and hook up a battery
• 38:15
  so can work at work at night, wouldn't that be cheaper? And the answer is yes, it would probably be
• 38:20
  about twice as cheap in terms of the dollar cost per AI token generated. But the margins on these
• 38:26
  tokens are high enough because they're so valuable that you it's not actually a marginal business,
• 38:31
  like the profit margins for the companies that are serving these tokens on a
• 38:35
  on a kind of operational basis of very, very high. So as long as SpaceX can make money,
• 38:39
  they don't have to make quite as much money as they would operating on the ground, then they
• 38:45
  completely delete the downside of, you know, leveling up this massive, you know, 10,000,
• 38:49
  a hundred thousand tonne to orbit per year capacity on the launch side and having nowhere to go
• 38:55
  with that. So I think that's a strategy, but I don't know, I don't have, I don't have internal
• 39:00
  capability or your total knowledge. No, but I mean, you're touching there on something,
• 39:05
  on something that I want to chat to you about, which is counter intuitive for a lot of people
• 39:09
  and was for me until I came across your work, which is that when you think about the incredible
• 39:14
  demand on energy that artificial intelligence is going to have, that data centers are going to have,
• 39:20
  that the problem is actually not the cost of energy. I mean, the cost of energy matters to you and
• 39:25
  me, it matters because we want people to be able to afford to heat their homes and whatnot. But
• 39:30
  the once you get up to a hyperscale, the limitation, these systems are not power cost sensitive,
• 39:37
  they're sensitive to the availability of power, but not the cost of power. Can you unpack that?
• 39:46
  I don't know, I mean, I think this is fairly intuitively obvious to people who understand that like
• 39:52
  the Google is not going out of business by giving their employees free food, right?
• 39:57
  Like the economic value generated by Google's employees is far, far higher than the cost of the
• 40:01
  food that they're giving them, right? And it's kind of the same situation with the AI data sets,
• 40:05
  right? You might pay a hundred bucks a month for your cloud subscription, right? But how much does
• 40:09
  this anthropic spend on power to pay for those tokens that you use? It's probably like 10 sets.
• 40:16
  It's probably like a thousand to one, right? And most of their costs.
• 40:19
  And just to clarify for people, if that I want to know what a token is, you're talking about tokens,
• 40:23
  but tokens are the things that AI uses to generate AI. So think of it like a piece of it.
• 40:28
  Yeah, just think of it like I'm in a business. So that's what you get built on, right? It's the amount of
• 40:34
  the amount of bytes that come shooting out the end of that, of that infernal computer.
• 40:38
  Yeah, so so most of what of what the hyperscales are paying for is the GPUs, right? It's in video
• 40:44
  and TSMC building these incredible computers that are able to obviously consume power and then
• 40:50
  replicate some vestiges of human thought. Yeah, so that's kind of that's kind of the idea there.
• 40:55
  But just unpack it for me because I think what was interesting to me about it was that if I'm
• 40:59
  paying like $30 a month for a chat GPT, then the cost to the marginal cost to
• 41:10
  chat GPT of my being a participant in what they're doing of my consumption is negligible
• 41:16
  once they've already bought the computers. Oh, for sure, yes, economies of scale.
• 41:21
  Yeah, and the value that I get out of having access to artificial intelligence is a lot more
• 41:26
  than what they currently charge me. I would have a price point that's considerably higher than I
• 41:30
  can't be paid for it. And so if they need to charge me a little bit more because the fraction
• 41:36
  of their costs that is the energy comprises, even if that doubled, it's still a small fraction
• 41:43
  of their input costs. And so in terms of the overall value of the output that they're generating,
• 41:49
  when people think about the skyrocketing challenges of providing enough of electricity
• 41:55
  cheaply enough for artificial intelligence to get to the next level, it's not actually a problem
• 42:00
  of cost because electricity could triple quadruple quintuple, 10X in cost, and it wouldn't be a
• 42:08
  major difference to their inputs and even if they had to charge me a little bit more.
• 42:15
  Not a major problem for them as end users. One of the revenge operating in space is regulatory,
• 42:20
  like on the regulatory side, getting permission to fly satellites in space is non-trivial,
• 42:25
  but SpaceX is pretty good at it. And once they've done it, they can just copy paste all day long,
• 42:29
  right? So they've already submitted applications to launch these new generation of satellites in
• 42:35
  space, whereas on the ground, yeah, it's technically easier to truck a truckload of solar panels over
• 42:40
  there, but how many different regulatory jurisdictions you have to deal with just to copy paste this
• 42:46
  across Nevada. It's dozens and dozens. In general, thousands globally, it's probably in the hundreds
• 42:51
  of thousands of separate regulatory jurisdictions just to put solar panels on the ground. It's kind
• 42:56
  of insane. And then the power cost is not that important for these AI companies. And actually,
• 43:02
  the power generation costs in general are not that high. Part of the reason that consumers are
• 43:06
  being squeezed in terms of what they pay for their power bills is because it's actually the cost
• 43:13
  of delivering power from a power plant somewhere to the house, that transmission and distribution,
• 43:19
  where there's no competition, there's no effective regulation, and Balmol's cost disease is
• 43:24
  biting real hard. And so you're seeing these absolutely harrowing stories of people on fixed
• 43:29
  incomes, basically losing the ability to heat their homes and turn on their lights, because the
• 43:34
  regulatory apparatus has failed them. It's failed to ensure that the supply is expanding faster
• 43:39
  than demand to get the prices low. And we see this all around the world. It really blows my mind,
• 43:45
  you know, Germany, as recently as six months ago, padding themselves on the back,
• 43:49
  having successfully shut down all the nuclear power plants, but suicide, absolutely stupid,
• 43:54
  unbelievable. The same story is happening pretty much everywhere in the West. People are
• 44:00
  congratulating themselves at getting major energy development infrastructure canceled,
• 44:06
  or pushed away. It's absolutely crazy. You can't complain about that. And it complained about
• 44:12
  high gas prices. But the right wingers who I know, I mean, I had Tony Abbott, the former
• 44:19
  prime minister on the show, and his attitude towards energy and climate is similar to many of
• 44:26
  colleagues who I find frustrating to talk to on the sort of right wing heterodox side of the
• 44:31
  podcast stand, which is that the reason why there's been this regulatory neglect of, you know,
• 44:38
  abundant energy is precisely because everybody's got obsessed with this whole net zero climate
• 44:44
  change scam and has become leery about. And they basically frame it as a trade off between
• 44:50
  our prosperity and abundance on the one hand versus us eking out an impoverished existence with
• 44:56
  high energy prices. And old ladies freezing to death in London because we've been ideologically
• 45:02
  hoodwinked into shooting ourselves in the foot, even if climate change is real, you know, China,
• 45:08
  all these other countries aren't doing an ask. So I think there's this false binary that's set up
• 45:13
  that it sounds like I don't want you to be misunderstood as playing into what are the regulatory
• 45:18
  impediments that have created the the shit storm that we currently enjoy in terms of energy,
• 45:27
  if not ones that are motivated largely by an obsession with net zero and carbon.
• 45:34
  Yeah, I listen to Tony Abbott show with you as well. And I think he's absolutely spot on when he
• 45:39
  says getting poor is not the way to improve our climate, you know, resiliency in the future.
• 45:46
  And we actually need to stay rich. And I think he's absolutely correct that that, you know,
• 45:50
  you don't want to go around prematurely shutting down existing energy generation infrastructure
• 45:56
  that's fully paid off until you've got the next the next thing lined up. Where I think he's
• 46:00
  wrong. Is he just, you know, he's like a lot of all the fellas. I think a little a little
• 46:05
  a little later than the past when it comes to, you know, the real world development and progress we've
• 46:09
  seen on these other technologies. And I said, so my answer to this is, it's just all the above.
• 46:14
  It built build the solar rays, build the wind turbines, build build the batteries, mostly solar
• 46:18
  on batteries really. Increase supply, right? We're very, very clear when it's time to turn off the
• 46:23
  deal or any other call or gas power plant because it's a qualified power plant. Yeah, but don't turn
• 46:29
  on, don't prematurely go go around shutting down coal. Yeah, and leave the nuclear power plants on.
• 46:33
  Like, shut me down nuclear power plants is such a scam. Right. And again, I'm just going to
• 46:37
  high five the third rail law around here. Right. Why is it a scam? Well, it's kind of a, it's a
• 46:41
  scam in three parts. The first game is, you know, first of all, we'll have this Philly stringent
• 46:46
  regulatory regime that makes it extremely difficult to build nuclear power plants. We've just
• 46:50
  seen this firsthand in the United States where they finished two plants in in Georgia, I think,
• 46:54
  after like almost 20 years of development. Most of what people involved in the procurement
• 46:57
  went to present like that's how corrupt it was. And and vastly of a budget and vastly behind
• 47:01
  schedule. Okay. And then once you've built the damn thing, now you've got the, the nuclear industry,
• 47:06
  this is something that Hyman Rickover himself fought throughout his life, although he died in 1985.
• 47:11
  The nuclear industry itself is is constantly engaged in rent, rent seeking operations to try and
• 47:18
  and force through new regulatory measures that A makes it harder for the new entrance to compete
• 47:22
  and B mandates that their, their operators and their, their customers continually spring for
• 47:27
  taxpayer funded upgrades and stuff. They don't really need it. Right. They just kind of increase
• 47:30
  the complexity of the plant, increase its cost, make it, make it harder and more expensive to maintain
• 47:34
  over time. And for the third act, you've got the same, the same people turn around and say,
• 47:39
  oh, well, now it's time to shut down the plant. So we'll, you know, they've been caught red handed,
• 47:42
  actively participating in these in these anti nuclear advocacy programs. The very same people who
• 47:47
  are making money maintaining them are advocating through through parties to shut them down. Why?
• 47:53
  Because what's, what's better than getting like infinite money, an infinite time to build a
• 47:57
  nuclear power plant, getting infinite time and infinite money to pull one apart, because at the end,
• 48:01
  you don't even have to have a nuclear power plant that works. Right. We've seen this in Germany.
• 48:05
  Right. We're, we're, we're the, we're the, the Siemens and I don't know which companies are
• 48:08
  totally involved. Like, basically, the major European contractors, engineering contractors that
• 48:14
  do these, these things, you know, commence these operations. They've got a half disassembled
• 48:18
  nuclear power plant with the wind blowing gently by and they're like, oh, we're in awful shame
• 48:21
  if we were to lose containment on the core. You know, next thing, you know, you're spending 10
• 48:25
  times as much pulling an old nuclear power plant apart as you'd spend building a new one. And at
• 48:28
  the end of the day, what do you got for the show for it? No nuclear power plant, no nuclear industry,
• 48:32
  no, had a store of plutonium, just in case things get hot with the Russians. What a disaster. Right.
• 48:37
  I don't think that we should be building new nuclear power plants at this point, but there's also
• 48:40
  no reason to shut them down until they're actually genuinely at the end of their life. And these
• 48:44
  are things that like airplanes, for example, if you maintain the world, they will last forever.
• 48:49
  And so, you know, that's kind of, especially if you're in a situation where like you've got
• 48:53
  coltel winters and you don't have your own adequately developed supplies of gas and oil.
• 48:58
  Right. Absolutely crazy. So the same, is it the same engineering companies that build nuclear power
• 49:03
  plants that disassemble nuclear power plants? So they have a vested interest in, in having a,
• 49:09
  earning a lot of money from disassembling the thing that they just built. Well, it's not that
• 49:13
  they just built right. But let's say, let's say you're, what money is about 30 years ago? Yeah,
• 49:17
  cozy oligopoly of like two or three kind of heavily, heavily into, into, intertwined large engineering
• 49:24
  contractors that operate in, say, a particular place like France or Germany or some other European
• 49:29
  country, right? Like, you're looking around, you're like, okay, well, how are we going to increase
• 49:32
  our, increase our revenue and our profit this quarter and this year and next year, right?
• 49:36
  On a given fixed fleet of nuclear power plants, right? Like once, once you build out your nuclear
• 49:41
  fleet, there's not a whole lot to do with them. And this is, this is kind of part of the pickle with
• 49:44
  these, with these monopoly concessions, which is, yeah, all of these, all these power companies are
• 49:51
  monopolistic. They're legal, legal monopolies, but it also means that they're not particularly
• 49:55
  dynamic. And as we've seen, not particularly well positioned to take advantage of, of
• 50:00
  improvements in technology and to pass price savings down to the customers. And really like,
• 50:04
  unfortunately, I'm very kind of black killed about this. I don't think it's likely to change,
• 50:07
  right? I don't think that we've ever seen like, you know, PGM or Tennessee Valley authority or
• 50:12
  so-called gas or PG&E, like, really get, read the riot act on this front and improve their game.
• 50:17
  What we see instead is what we've, like, probably the best case what we've seen is in Australia,
• 50:21
  where we've massively deregulated and streamlined the, the process for building rooftop solar
• 50:26
  and residential battery supplies to the point where there's higher penetration in Australia than
• 50:30
  almost any other country. And people, you know, the response to the feed in tariffs being
• 50:36
  brought down and eventually turned negative is that people are genuinely just islanding from the
• 50:40
  grip, just turning off, right? Which, yeah, talk about like a massive own goal on the part of the,
• 50:45
  of the regular authorities and the incumbent power providers. But like, what are they,
• 50:50
  what are they expecting going to happen? Like, the future, the future is solar and batteries.
• 50:56
  So either you do that and you sell it to people at a reasonable price, like Netflix or Napster or
• 51:01
  or Spotify or whatever, or they will do it themselves. You know, in some, some form of like semi,
• 51:06
  semi-legal piracy, and you will not be able to do anything about it because for all our modern
• 51:10
  state police powers and so on, no one has yet been able to successfully force people to turn
• 51:14
  lights on and off when they want them to. Yeah. And try and catch it just on the, on the question
• 51:21
  of nuclear and Europe and France and Germany, whenever we talk about energy and Europe, I mean,
• 51:26
  a couple of things come up. One is, you know, a lot of Europe is cloudy and cold and dark for
• 51:32
  six months of the year. Another is when Russia invaded Ukraine, would it have been possible for
• 51:39
  the Europeans to flick a switch and gain total energy independence without the kind of problems
• 51:44
  that they've seen lately in their energy supply? What, what could they have done?
• 51:50
  Well, if we're doing counterfactuals, I do seem to remember reading last week that Germany and the
• 51:55
  European Union have announced now, I think, for the third or fourth time, that they have officially
• 51:59
  adopted a policy of energy independence from Russia, right? After the previous 20 years of
• 52:04
  doing the exact opposite, they can announce policies all day long, but the reality is they literally
• 52:09
  wire Russia a billion dollars a day for gas and oil, a billion dollars a day, a day, right? That's
• 52:16
  a lot of money. A significant fraction of Australian GDP, the European powers are just handing over
• 52:23
  to Russia to can you do their lawless war and genocide against Ukrainian people, like shocking.
• 52:28
  Okay, so counterfactually, Russia invades Ukraine in 2014. Oh, maybe we should do something about
• 52:36
  that. Okay, they're there to get in 2022. Maybe we don't turn off the last few nuclear power plants?
• 52:41
  I don't know, just an idea. Just say, right? Just as a hypothetical. Also, where do all the Chinese
• 52:49
  companies get their tooling to build all their photovoltaic plants, right? The factories have tooling,
• 52:55
  you know, tools and stuff, and jigs and so on, and the factories that produce solar modules,
• 53:00
  they build them themselves, but they also buy them from Germany. Germany is the world's leading
• 53:03
  producer of factory tooling. So if you are actually like a regional governing power, like the EU,
• 53:11
  or even any of the national governments there, with like, you know, a modicum of testosterone,
• 53:16
  you say, ah, we were wrong. Our worldview was wrong. And in fact, it is important for Europe to
• 53:22
  maintain the ability to have national sovereignty or, you know, local regional sovereignty over its
• 53:28
  own energy supplies. Incidentally, we did learn this lesson in 1945, but I guess we're going to
• 53:33
  relearn it now in 2022. And what's a, we just start writing checks to, to, you know, the major
• 53:41
  companies in the Middle Eastern and Germany, and in France, in any other country that wants to
• 53:43
  participate, and we're going to take the domestic European solar manufacturing capacity from next
• 53:48
  to nothing, up to as high as we can get it as quickly as we can get it. And anyone at the time
• 53:53
  would have said, well, it'll be two years before you can even see motion on that front. Okay,
• 53:56
  fine. But two years from then was two years ago. Right. So like by 2026, Europe could have had
• 54:03
  complete energy independence and autonomy, but instead they stuck their fingers in areas,
• 54:07
  and they pretended to, they preferred to pretend that there wasn't a war on their doorstep,
• 54:10
  they didn't have regional responsibilities, and that they, if they just ignored it,
• 54:14
  the problem would go away. Well, it hasn't gone away. Right. We've seen more than a million people
• 54:17
  die. We seriously injured in this war in Ukraine. In a continent that's running out of people,
• 54:22
  that's running out of young people, it's just the stupidest thing I can possibly imagine.
• 54:26
  It's unbelievable. And these people, they call ourselves out, our leaders. Right. What have they
• 54:31
  done? What have they done? They've just fiddled our own birds. It's absolutely infuriating.
• 54:35
  It's not even all that hard to, it's like, like, it's, it'd be quite another thing to say,
• 54:39
  well, we need to build nuclear, nuclear weapons, nuclear submarines to like keep the Russians
• 54:43
  at bay. That might be seen as a little bit, you know, inflammatory, but there's nothing in
• 54:46
  inflammatory about doubling the size of the solar plant, or doubling the size of the solar battery
• 54:50
  plant or something like that. It's just like, it's just a, this is, this is, I mean, I don't know,
• 54:56
  have you flown around Germany before? I've flown around Germany. Look out the window. What is it? Like,
• 55:00
  zillions of farms, right? You would think that if it was a place that didn't have any solar power,
• 55:04
  they wouldn't do much farming, but Germany is a massive agricultural exporter, despite the fact
• 55:08
  that they insist largely for, for ascetic reasons, in having farms that are operators, so they were
• 55:14
  in 1900, right? Like, I saw, I saw a corn, a cornfield in Bavaria that was like, I could have jumped
• 55:20
  across it. So we have cornfields in the United States that are the width of states. Like, yeah.
• 55:26
  Yeah. It takes you an hour to fly across it. And your point is that if you can run that,
• 55:31
  that, I mean, a farm obviously needs sunlight because plants need sunlight. So there's sunlight.
• 55:36
  If there's a farm, then there could be a solar array because there's obviously not a constantly
• 55:41
  cloudy and dark. Practically. And in how many deserts? Yeah. Like, Spain, Spain is an incredible
• 55:46
  place to build solar plants at scale. Italy, Greece, anywhere in southern Europe is as good as,
• 55:51
  you know, you're medium-placing United States. And so if they made that switch, KC, suppose that
• 55:55
  they get to the point at which they go, okay, we're going to be completely energy independent.
• 55:58
  And we can transpose this example to the United States and Australia as well, but Europe is a good
• 56:03
  case because, you know, Hamburg is awful and drizzly and cold and cloudy for most of the year.
• 56:10
  So if they do that, everything's big. Sorry, hamburgers. Sorry, sorry, dude.
• 56:16
  Not like the hamburgers. Frankfurters are nicer, a lay live in a nicer place which has less cloud
• 56:24
  and isn't quite as dark. But suppose that you flick that switch, then what proportion of their
• 56:28
  energy do you think they can actually get from solar as a continent? Where do you, I mean,
• 56:33
  obviously you can put it in Spain, but then you have to get it to Hamburg. And what's the rest
• 56:38
  of the mix? Right. Prior to industrialization, pretty much 100% of their energy came from solar.
• 56:43
  Right? Trees, burning wood for fuel and food, grown in a field, solar power, okay? With a GDP
• 56:49
  of about 400 bucks per person per year. Not a great life. But you say can Germany with all
• 56:55
  its technology and its economic power not achieve this? Of course it can. It's I think they get
• 57:00
  the future in 100 years from now. Are there still going to be like running around whining about
• 57:04
  like high price and natural gas? No. Like sooner or later they're going to get that. Like the rate
• 57:10
  at which solar is being deployed is increasing over time. So like it is just a foregone conclusion
• 57:13
  that sooner or later they're going to reach the point which they would have if they had like a
• 57:16
  modicum of leadership like talent. No, but what I'm all I'm asking all I'm asking you from an
• 57:20
  engineering perspective. Yeah. It's like how much of the how much of Germany's energy supply
• 57:24
  can cause 100% using to using today's technology. Yeah. 100%. Like actually better than that. Like
• 57:30
  500% right. You can grow Germany's economy faster on cheaper energy on solar and batteries with
• 57:37
  today's prices and technology. Then you count on any other fuel source. Get a human as well if
• 57:42
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• 57:47
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