Speaker 1: You are listening to Redefining Energy Your co hosts from
Speaker 1: Berlin Gerard Reid and from London Laurent segalam.
Speaker 2: Today on Really Thinking LG. We're going to have a
Speaker 2: bit of fun. This is summertime, so we're going to
Speaker 2: make some friends. But his one friend. We're going to
Speaker 2: talk about Bill Gates and his approach to energy.
Speaker 3: The reason we're talking about this topic is because of
Speaker 3: Michael Barnard, and he wrote quite an interesting article on
Speaker 3: breakthrough energy ventures and bad investment tiases therefore bad investments,
Speaker 3: and I thought, and that's good.
Speaker 4: I like this.
Speaker 3: I said, let's bring Michael on to talk a little
Speaker 3: bit about I suppose about that topic. But also more importantly,
Speaker 3: why does Bill Gates think like this? I think that's,
Speaker 3: for me, the most important question.
Speaker 4: So Michel, welcome to your show.
Speaker 1: Thank you guys for having me. It's been fun being
Speaker 1: on a sibling channel Redefining Energy Tech, where I get
Speaker 1: had really amazing nerdy conversations. But sometimes I talk about
Speaker 1: stuff you guys care about two like money.
Speaker 3: Yeah, it's just excuse the fact that both myself and
Speaker 3: the run of ADHs, you know, so we just we
Speaker 3: can't hand on for that long.
Speaker 4: You know. No, it's great to have you.
Speaker 2: But let's be clear, we're not going to talk about
Speaker 2: breakthrough energy venturer this time, although I've had a lot
Speaker 2: of things to say, because there's the good, there's the bad,
Speaker 2: and there's a lot of early stuff I'd like for
Speaker 2: energy Jerb, what's the thesis please?
Speaker 5: What I wanted to talk Michael about was, and I've
Speaker 5: been looking at it for many years, is the philosophy
Speaker 5: behind what Bill Gates is doing, and that comes down
Speaker 5: to a Czech professor living in Canada called backlof Smell.
Speaker 3: I actually have all his books here in my office.
Speaker 3: I really really have enjoy them and for those who
Speaker 3: don't know them, what this brilliant professor does, He's really
Speaker 3: written about the history of Enner and his whole tiece
Speaker 3: is that big revolutions across the world come about when
Speaker 3: you have a new form of energy, and related to
Speaker 3: that's a big change in transport. That's it, and I
Speaker 3: think I go along with this is great, but there's
Speaker 3: a lot that I don't go along with, and I
Speaker 3: think that's what I'd love to talk about. I'd love
Speaker 3: to hear your thoughts on Smell and all that type
Speaker 3: of self suff.
Speaker 1: Sure, I get together with my buddies like Paul Martin
Speaker 1: and Otters in this space and get grumbling about our
Speaker 1: fellow Canadian blacklap smell and his outsized influence. We have
Speaker 1: a couple of things to say. One is deep respect
Speaker 1: for the stuff he gets right. His research and depth
Speaker 1: and breadth is great. He's covered an amazing breadth of stuff.
Speaker 1: And I say that as someone who's covered and amazing
Speaker 1: breadth of stuff. He's broader than me, He's broader and
Speaker 1: deeper than me. Except on energy. He wasn't deep enough,
Speaker 1: he wasn't close enough. He didn't do the analysis of
Speaker 1: specific types of things. He didn't understand some of the
Speaker 1: fundamentals of the different forms of energy. He didn't understand
Speaker 1: some of thermodynamics because that's not its place. That's such.
Speaker 1: He made some basic errors, and it took him a
Speaker 1: long time to even admit that the primary energy fallacy existed.
Speaker 1: And he's still never admitted that it's a problem for
Speaker 1: his entire thesis about energy. It's fascinating to me, and
Speaker 1: you know, he's now somewhat of a recluse. Last time
Speaker 1: I heard his name was when Goldman Sachs released its
Speaker 1: annual report. They had a forward by him. He submitted
Speaker 1: a very very link in the essay which they condeensed down.
Speaker 1: I was cited in some chapter or other of it
Speaker 1: as well, and I was just chatting with the people
Speaker 1: over there about it. Yeah, he was wrong about energy
Speaker 1: and as a result, Bill Gates's biases were confirmed. There's
Speaker 1: a whole bunch of interesting cognitive biases going on in
Speaker 1: this bubble of billionaires.
Speaker 3: So Mike, maybe we can jump into them. I mean,
Speaker 3: for me, what I think the major one think is wrong.
Speaker 3: And this is me coming with my economics brain, so
Speaker 3: you come with your scientific brain off of this for
Speaker 3: me is his view is that energy transitions, by their
Speaker 3: nature are very slow, and they can take up to
Speaker 3: one hundred years. There's no doubt when you look back
Speaker 3: in history they did take one hundred years, whereas the
Speaker 3: coal revolution it's the beginning of the oil revolution, saying,
Speaker 3: but they took one hundred years. I'm now looking and
Speaker 3: I'm going he doesn't understand technology, because there is massive
Speaker 3: technology change.
Speaker 4: And if I just.
Speaker 3: Take the case of solar, we've never seen an energy
Speaker 3: technology come to market as quick as this technology, and
Speaker 3: there's other ones and that's for me, the big one.
Speaker 3: I'd like to hear what you think if you think
Speaker 3: I think I'm misreading this, or you think there's one
Speaker 3: even bigger than that.
Speaker 1: So there's three major things in my analysis, and I'd
Speaker 1: published on this a few years ago, which of course
Speaker 1: Blacklaus nolanduberbly never read and Bill Gates never read. The
Speaker 1: first one is the primary energy fallacy. He just didn't
Speaker 1: realize that we didn't need to replace all of the
Speaker 1: heat energy and coal, oil and gas. We needed to
Speaker 1: replace the useful work we got out of the heat energy,
Speaker 1: and that's about a third on average, none with efficiencies.
Speaker 1: We need to like Saul Griffiths did calculation, came up
Speaker 1: with forty two percent was the total energy required in
Speaker 1: the United States when he needed to work with the
Speaker 1: d League last decade, basically saying that one hundred quads
Speaker 1: of energy, they only need forty two quads if they're
Speaker 1: going from renewables to electric energy services. So Smill miss
Speaker 1: that entirely, as many do. That's just a complete fail
Speaker 1: of analysis. So that's a big one. He's off by
Speaker 1: a lot in terms of energy requirements when he discounts electrification.
Speaker 1: The second one to your point, he doesn't understand economies
Speaker 1: or manufacturing scale and modularity. He's still thinking big, big
Speaker 1: watts scale coal and nuclear plants as opposed to manufactured
Speaker 1: components put into an optimized global supply chain and constructed
Speaker 1: in parallel over an extended period of time. We're now
Speaker 1: at the point where it can put a gigawat of
Speaker 1: offshore wind in ten months of construction. We're putting in
Speaker 1: gigwatts of solar every day now simply because of that
Speaker 1: manufacturability and that global supply chain, the standardization, and then
Speaker 1: the parallelization of construction, it's just much much faster. The
Speaker 1: third thing is he overstated our transition to a natural
Speaker 1: gas economy. He's asserting that we're forty years into a
Speaker 1: natural gas economy and only five or six years into
Speaker 1: our wind and solar economy. But the wind and solar
Speaker 1: economy started in the seventies, so he's misstating when the
Speaker 1: wind and solar economy started and overstating the natural gas economy.
Speaker 1: And as I look around the world, I don't see
Speaker 1: his thesis being borne out in terms of actual stuff,
Speaker 1: And just look at Europe actually energy crisis. Natural gas
Speaker 1: demand has plommeted because wind and solar are fit for purpose,
Speaker 1: and there's a whole bunch of other stuff that can
Speaker 1: be done around that. So he's got several things that
Speaker 1: are wrong, and unfortunately he never corrected any of that stuff,
Speaker 1: and it confirms Bill Gates's biases for nuclear I think
Speaker 1: there's a really good thing to talk about on this
Speaker 1: where we say when were the biases formed and why
Speaker 1: did they persist. That's a fundamental part of my analysis
Speaker 1: at THEIRS. What's your take, Gerard Laura.
Speaker 2: I don't know how that thoughts were put together, but
Speaker 2: what I can tell you is that there's a lot
Speaker 2: of people who are taking advantage of especially the primary
Speaker 2: energy fallacy to just repeat at nauseum, we're not there.
Speaker 2: I barely scrushed the surface and so on. And here
Speaker 2: we're talking about one of my heroes. But now the
Speaker 2: guy needs a retirement. It's Danielle Jergin. I was an
Speaker 2: absolute fan when he wrote the Price, but when was
Speaker 2: that thirty five years ago? And now it's all over.
Speaker 2: I mean, he's going to that sera week where all
Speaker 2: the oil executive oil themselves is like everything's going to
Speaker 2: be okay, nothing's going to change. Because of course there
Speaker 2: are the producers. They want people to continue to buy
Speaker 2: their oil, the first few industry and those guys, they
Speaker 2: are the firstylized in their head. And whilst they say, oh, look,
Speaker 2: Bill Gates is saying the same thing as we do.
Speaker 2: We need oil and nuclear, and then a lot of minions.
Speaker 2: I don't want to name names, but I'm regularly in
Speaker 2: fight with those guys on LinkedIn, people who are talking
Speaker 2: about Michael.
Speaker 3: But first, if thank you very much for summarizing that.
Speaker 3: I mean that way I couldn't done matter.
Speaker 4: I was great.
Speaker 3: I think you end up talking about nuclear and I'm
Speaker 3: not going to blame Smell for nuclear and Bill Gates.
Speaker 3: So I'm actually going to blame Dave McKay, who was
Speaker 3: a UK physicist who passed away a few years ago,
Speaker 3: and he wrote a book called Sustainable Energy Without the
Speaker 3: Hot Air. I really enjoyed that book as well, and
Speaker 3: there was definitely errors in it, but the major conclusion
Speaker 3: he had is we can't build an electricity system in
Speaker 3: and around renewable energy. That was really what he was
Speaker 3: saying and there was no way around this. So as results,
Speaker 3: what we need to do is focus on energy efficiency
Speaker 3: and nuclear. So I blame him rather than smell and
Speaker 3: correct me if I'm wrong. I think what I conclude
Speaker 3: out of Smill is the conclusion that the Gates got
Speaker 3: from Spill was that the technologies are not there for
Speaker 3: this transition. Because actually, probably when even when Gates started
Speaker 3: looking at this, maybe a decade ago, Yeah, solo wasn't
Speaker 3: what it is today. Batteries wasn't what. He has missed them,
Speaker 3: and he's got the focused on technologies which you can
Speaker 3: argue are not scalable. That's I think the mistake that
Speaker 3: he's made. And I find that's interesting that Gates has
Speaker 3: made that mistake given that he's a technologist. He just
Speaker 3: I mean whatever, it's a technologist.
Speaker 2: At least he put money where his mouth was. So
Speaker 2: he has sunk an incredible amount looking for fusion or
Speaker 2: SMOs or that. Probably you're more attuned on the subject
Speaker 2: than me.
Speaker 1: We have to go back further. This story for nuclear
Speaker 1: is similar to the story for hydrogen for energy in
Speaker 1: the late nineties early two thousands. For people who are
Speaker 1: climate aware and environmentally aware, they're looking for technologies which
Speaker 1: could solve the problem, and the options were fairly limited
Speaker 1: at the time. For road transportation, batteries obviously weren't fit
Speaker 1: for purpose at the time. It was a real leap
Speaker 1: of faith to say we're going to have an electric
Speaker 1: rowth even cars, never mind trucks. In two thousand. Similarly,
Speaker 1: for nuclear, France and the United States had come out
Speaker 1: of pretty successful rollouts of nuclear programs. Is squint. They
Speaker 1: don't look too expensive, and so they needed something that
Speaker 1: could scale, They needed something that could work. Both of
Speaker 1: those things were met by nuclear and hydrogen, and so
Speaker 1: a bunch of people decided that that was the answer.
Speaker 1: And this wind and solar stuff that had been around
Speaker 1: since the seventies and eighties clearly was just noturious stuff.
Speaker 1: So it's easy to make CRO's decisions around two thousand
Speaker 1: to two thousand and five, and Gates founded terror Power
Speaker 1: is traveling Way nuclear reactive company in two thousand and
Speaker 1: six around the same time that must put his money
Speaker 1: into Tesla, just to compare and contrast. And so if
Speaker 1: you put all your money into those things and you've
Speaker 1: decided that those are the answers, then as time goes by,
Speaker 1: say twenty fifteen, when Breakthrough Energy Ventures was founded. By
Speaker 1: twenty fifteen, the answer was clearly that the data had
Speaker 1: changed and if we kind of go back to keyms, well,
Speaker 1: the data has changed, I will change my mind. What
Speaker 1: do you do, sir? But unfortunately, people like Gates live
Speaker 1: in this virtual reality that looks a lot like our
Speaker 1: Earth but excludes stuff which doesn't confirm their biases. They
Speaker 1: tend to have people in filters around them which give
Speaker 1: them more what they want to know than what they
Speaker 1: don't want to know. McKay and smill, we're speaking to
Speaker 1: Bill Gates's cognitive biases around energy, and he wasn't receiving
Speaker 1: solid stuff that challenged his biases from the people around him.
Speaker 1: They weren't saying, Bill, you were right fifteen years ago,
Speaker 1: but it's time to change your mind.
Speaker 4: It's hard.
Speaker 1: I've spoken to people who are bounced off the bubble
Speaker 1: around Gates, and it really is there's a little court
Speaker 1: there and people are very jealous of their position in
Speaker 1: that court. They're very well funded to do stuff that
Speaker 1: they enjoy, and it's hard to get past that. I
Speaker 1: feel some regret for some of the people in that
Speaker 1: court because they couldn't been doing better work.
Speaker 4: But this is kind of the problem.
Speaker 1: Is we look at that breakthrough Energy of Entries was
Speaker 1: founded by six or seven billionaires, including Branson and people
Speaker 1: like that, and they were all pro nuclear people. They
Speaker 1: all wanted to solve the planet crisis. They all reached
Speaker 1: their position and opinion on technologies a decade two decades earlier,
Speaker 1: and weren't being challenged on those biases because that's not
Speaker 1: the way their lives are set up. The stuff that
Speaker 1: enabled them to be extraordinary earlier in their careers by
Speaker 1: looking deeply into the business models, looking deeply for disruptive technologies,
Speaker 1: understanding the stuff, taking big bets on nason technologies, and
Speaker 1: then being ruthless business people to create their billions and
Speaker 1: making mistakes but solving them over time. They're not doing
Speaker 1: that anymore. Like if you look at Musk as an example,
Speaker 1: it's another example of a poor climate aware billionaire Oligarch.
Speaker 1: The boring company and hyper loop were really stupid ideas,
Speaker 1: but he was post early Musk. In early Musk todays,
Speaker 1: he just learned everything. If he was getting too disrupting
Speaker 1: urban transit, he would read four hundred page books and
Speaker 1: talk to global experts and form his opinion and have
Speaker 1: challenging conversations. He no longer does that. Now he has
Speaker 1: a win and then they buy time on boring machines
Speaker 1: and he starts a company. It's a divorce from reality
Speaker 1: and they no longer have people around them strong enough
Speaker 1: to challenge and correct them when they get wrong. So
Speaker 1: it's fascinating to watch, and it's deeply unfortunate because we
Speaker 1: have this hagiography of billionaires, of the successful multi billionaires
Speaker 1: who are so influential they go to Davas and hobnobbed
Speaker 1: with world leaders, and people pay attention to them when
Speaker 1: their opinions are ten and twenty years out of date.
Speaker 2: On Gates credits, he was very instrumental in pushing for
Speaker 2: the IR in the US, although it's a bit self
Speaker 2: serving because a lot of his company got a lot
Speaker 2: of subsidies along the way. That's a badogs. Are they
Speaker 2: forces for good or not? Certainly influence. They are huge
Speaker 2: in terms of money. Even with all the money in
Speaker 2: the world. I can tell you, Bill Gates, if you
Speaker 2: listen the nuclear industry, can you, they can outspend everything
Speaker 2: you have, So don't go into nuclear If you want
Speaker 2: to give something to your ch learn.
Speaker 3: Let's change the team slightly, guys. Let's assume Bill Gates
Speaker 3: manages to listen to this podcast. So what do we
Speaker 3: tell them? I give you mind one point. I just
Speaker 3: say at one point, okay, the future of this energy
Speaker 3: transition is all about standardization and scale. I don't care
Speaker 3: what it is that you know. If I don't look
Speaker 3: at transformers across the world, they're all customized. This is ridiculous.
Speaker 3: They need to be standardized. Everything standardized. And if you
Speaker 3: look at the three penologies that have scaled most in
Speaker 3: our energy space, their wind turbines, their solar panels, their batteries,
Speaker 3: and they are all standardized and scaled.
Speaker 4: So that's for me.
Speaker 3: The message to him is focus on stuff that you
Speaker 3: can standardize and scale quickly if you want to make
Speaker 3: a different climate and to move this energy transition.
Speaker 4: That's my one.
Speaker 3: What's yours, Michael?
Speaker 1: I would lean into that and understand manufacturing physical things
Speaker 1: Gates is brilliant, but his big successes were software things,
Speaker 1: which is an industry I'm intimately familiar with. It's very
Speaker 1: different than manufacturing hardware things. He wasn't a person who
Speaker 1: built laptops and cell phones. He was a person who
Speaker 1: built software. So understand the differences, because that's fundamental to
Speaker 1: understanding wind and solar's dominance. And batteries dominance. And the
Speaker 1: second thing I'd say is take a moment ask yourself
Speaker 1: why it is you have this confirmation bias which is
Speaker 1: preventing you from leaning heavily into wind, solar and batteries
Speaker 1: when they're so obviously winning. Ask yourself why the system
Speaker 1: you've put up set up around you over the past
Speaker 1: twenty twenty five years is not enabling you to have
Speaker 1: the success you had in software and disease prevention. And
Speaker 1: to be clear, I overlap with Gates and disease prevention.
Speaker 1: I helped build the world's most sophisticated communical disease management
Speaker 1: solution here in Canada after Stars one that was used
Speaker 1: in the Middle East during COVID. And so I get
Speaker 1: how transformative the Bill Mosigates foundations efforts and global disease
Speaker 1: eradication are. That's because they started in both cases with reality,
Speaker 1: not bias. And so Bill go back to fundamentals. You're
Speaker 1: why you're losing in this domain because you can win excellent.
Speaker 2: Okay, So big guys like to read, So I suggest
Speaker 2: you read the professor Benfiedberg How big things Get Done.
Speaker 2: I suggest you follow brilliant young people like not Burllard,
Speaker 2: like Dave Jones, they are like tons of them with
Speaker 2: fresh ideas, fresh data. And we'll do the episode on
Speaker 2: buy through. And I can tell you they've done one
Speaker 2: hundred deeps in ten years, which is a lot for
Speaker 2: a VC fund. It's a lot, you know, it's like
Speaker 2: one a month's and I don't know if it's the
Speaker 2: mass effect. There are really great stuff, what for you.
Speaker 2: There's a lot of crap as well, but that's probably
Speaker 2: for another episode.
Speaker 4: Gentlemen, ex up, my friends. This was good.
Speaker 1: Okay, Girard has had his fulfilling moment. He wanted to
Speaker 1: say this for a while.
Speaker 2: I didn't tell then way out of the system. We
Speaker 2: won't be invited. That's Serah week, that's for sure.
Speaker 3: I'm looking forward to the other one because that quote
Speaker 3: to be care Gates is still highly resisting. This is great.
Speaker 3: We'll start the next time.
Speaker 4: This is great.
Speaker 3: That's a good introduction, very good.
Speaker 1: I'm just going to say there's a sign of like
Speaker 1: Leebreak keeps getting invited two major hydrogen insider events to
Speaker 1: keynote yep, and he's definitely not singing from their song cheap.
Speaker 1: So I suspect some of these bubbles of confirmation, bias,
Speaker 1: and tribalism are breaking down. They're looking for answers to
Speaker 1: why they're not winning, and so the answers are out there.
Speaker 2: Okay, guys, great too. Kim to you, I'm not sure
Speaker 2: we're going to be invited that next s week, although
Speaker 2: you never know, of.
Speaker 3: Course we're going to be invited.
Speaker 4: What I went anyway, Michael.
Speaker 1: I think if Leebright gets invited to hydrogen insider conferences,
Speaker 1: we should be invited to nuclear and big oil conferences.
Speaker 3: Yippie, thank you for listening to Redefining Energy. Don't forget
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