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<v Speaker 1>You are listening to Redefining Energy Your co hosts from

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<v Speaker 1>Berlin Gerard Reid and from London Laurent segalam.

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<v Speaker 2>Today on Really Thinking LG. We're going to have a

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<v Speaker 2>bit of fun. This is summertime, so we're going to

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<v Speaker 2>make some friends. But his one friend. We're going to

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<v Speaker 2>talk about Bill Gates and his approach to energy.

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<v Speaker 3>The reason we're talking about this topic is because of

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<v Speaker 3>Michael Barnard, and he wrote quite an interesting article on

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<v Speaker 3>breakthrough energy ventures and bad investment tiases therefore bad investments,

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<v Speaker 3>and I thought, and that's good.

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<v Speaker 4>I like this.

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<v Speaker 3>I said, let's bring Michael on to talk a little

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<v Speaker 3>bit about I suppose about that topic. But also more importantly,

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<v Speaker 3>why does Bill Gates think like this? I think that's,

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<v Speaker 3>for me, the most important question.

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<v Speaker 4>So Michel, welcome to your show.

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<v Speaker 1>Thank you guys for having me. It's been fun being

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<v Speaker 1>on a sibling channel Redefining Energy Tech, where I get

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<v Speaker 1>had really amazing nerdy conversations. But sometimes I talk about

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<v Speaker 1>stuff you guys care about two like money.

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<v Speaker 3>Yeah, it's just excuse the fact that both myself and

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<v Speaker 3>the run of ADHs, you know, so we just we

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<v Speaker 3>can't hand on for that long.

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<v Speaker 4>You know. No, it's great to have you.

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<v Speaker 2>But let's be clear, we're not going to talk about

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<v Speaker 2>breakthrough energy venturer this time, although I've had a lot

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<v Speaker 2>of things to say, because there's the good, there's the bad,

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<v Speaker 2>and there's a lot of early stuff I'd like for

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<v Speaker 2>energy Jerb, what's the thesis please?

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<v Speaker 5>What I wanted to talk Michael about was, and I've

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<v Speaker 5>been looking at it for many years, is the philosophy

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<v Speaker 5>behind what Bill Gates is doing, and that comes down

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<v Speaker 5>to a Czech professor living in Canada called backlof Smell.

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<v Speaker 3>I actually have all his books here in my office.

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<v Speaker 3>I really really have enjoy them and for those who

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<v Speaker 3>don't know them, what this brilliant professor does, He's really

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<v Speaker 3>written about the history of Enner and his whole tiece

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<v Speaker 3>is that big revolutions across the world come about when

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<v Speaker 3>you have a new form of energy, and related to

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<v Speaker 3>that's a big change in transport. That's it, and I

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<v Speaker 3>think I go along with this is great, but there's

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<v Speaker 3>a lot that I don't go along with, and I

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<v Speaker 3>think that's what I'd love to talk about. I'd love

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<v Speaker 3>to hear your thoughts on Smell and all that type

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<v Speaker 3>of self suff.

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<v Speaker 1>Sure, I get together with my buddies like Paul Martin

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<v Speaker 1>and Otters in this space and get grumbling about our

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<v Speaker 1>fellow Canadian blacklap smell and his outsized influence. We have

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<v Speaker 1>a couple of things to say. One is deep respect

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<v Speaker 1>for the stuff he gets right. His research and depth

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<v Speaker 1>and breadth is great. He's covered an amazing breadth of stuff.

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<v Speaker 1>And I say that as someone who's covered and amazing

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<v Speaker 1>breadth of stuff. He's broader than me, He's broader and

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<v Speaker 1>deeper than me. Except on energy. He wasn't deep enough,

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<v Speaker 1>he wasn't close enough. He didn't do the analysis of

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<v Speaker 1>specific types of things. He didn't understand some of the

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<v Speaker 1>fundamentals of the different forms of energy. He didn't understand

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<v Speaker 1>some of thermodynamics because that's not its place. That's such.

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<v Speaker 1>He made some basic errors, and it took him a

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<v Speaker 1>long time to even admit that the primary energy fallacy existed.

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<v Speaker 1>And he's still never admitted that it's a problem for

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<v Speaker 1>his entire thesis about energy. It's fascinating to me, and

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<v Speaker 1>you know, he's now somewhat of a recluse. Last time

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<v Speaker 1>I heard his name was when Goldman Sachs released its

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<v Speaker 1>annual report. They had a forward by him. He submitted

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<v Speaker 1>a very very link in the essay which they condeensed down.

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<v Speaker 1>I was cited in some chapter or other of it

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<v Speaker 1>as well, and I was just chatting with the people

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<v Speaker 1>over there about it. Yeah, he was wrong about energy

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<v Speaker 1>and as a result, Bill Gates's biases were confirmed. There's

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<v Speaker 1>a whole bunch of interesting cognitive biases going on in

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<v Speaker 1>this bubble of billionaires.

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<v Speaker 3>So Mike, maybe we can jump into them. I mean,

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<v Speaker 3>for me, what I think the major one think is wrong.

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<v Speaker 3>And this is me coming with my economics brain, so

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<v Speaker 3>you come with your scientific brain off of this for

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<v Speaker 3>me is his view is that energy transitions, by their

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<v Speaker 3>nature are very slow, and they can take up to

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<v Speaker 3>one hundred years. There's no doubt when you look back

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<v Speaker 3>in history they did take one hundred years, whereas the

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<v Speaker 3>coal revolution it's the beginning of the oil revolution, saying,

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<v Speaker 3>but they took one hundred years. I'm now looking and

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<v Speaker 3>I'm going he doesn't understand technology, because there is massive

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<v Speaker 3>technology change.

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<v Speaker 4>And if I just.

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<v Speaker 3>Take the case of solar, we've never seen an energy

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<v Speaker 3>technology come to market as quick as this technology, and

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<v Speaker 3>there's other ones and that's for me, the big one.

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<v Speaker 3>I'd like to hear what you think if you think

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<v Speaker 3>I think I'm misreading this, or you think there's one

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<v Speaker 3>even bigger than that.

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<v Speaker 1>So there's three major things in my analysis, and I'd

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<v Speaker 1>published on this a few years ago, which of course

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<v Speaker 1>Blacklaus nolanduberbly never read and Bill Gates never read. The

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<v Speaker 1>first one is the primary energy fallacy. He just didn't

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<v Speaker 1>realize that we didn't need to replace all of the

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<v Speaker 1>heat energy and coal, oil and gas. We needed to

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<v Speaker 1>replace the useful work we got out of the heat energy,

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<v Speaker 1>and that's about a third on average, none with efficiencies.

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<v Speaker 1>We need to like Saul Griffiths did calculation, came up

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<v Speaker 1>with forty two percent was the total energy required in

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<v Speaker 1>the United States when he needed to work with the

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<v Speaker 1>d League last decade, basically saying that one hundred quads

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<v Speaker 1>of energy, they only need forty two quads if they're

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<v Speaker 1>going from renewables to electric energy services. So Smill miss

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<v Speaker 1>that entirely, as many do. That's just a complete fail

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<v Speaker 1>of analysis. So that's a big one. He's off by

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<v Speaker 1>a lot in terms of energy requirements when he discounts electrification.

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<v Speaker 1>The second one to your point, he doesn't understand economies

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<v Speaker 1>or manufacturing scale and modularity. He's still thinking big, big

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<v Speaker 1>watts scale coal and nuclear plants as opposed to manufactured

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<v Speaker 1>components put into an optimized global supply chain and constructed

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<v Speaker 1>in parallel over an extended period of time. We're now

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<v Speaker 1>at the point where it can put a gigawat of

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<v Speaker 1>offshore wind in ten months of construction. We're putting in

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<v Speaker 1>gigwatts of solar every day now simply because of that

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<v Speaker 1>manufacturability and that global supply chain, the standardization, and then

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<v Speaker 1>the parallelization of construction, it's just much much faster. The

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<v Speaker 1>third thing is he overstated our transition to a natural

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<v Speaker 1>gas economy. He's asserting that we're forty years into a

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<v Speaker 1>natural gas economy and only five or six years into

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<v Speaker 1>our wind and solar economy. But the wind and solar

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<v Speaker 1>economy started in the seventies, so he's misstating when the

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<v Speaker 1>wind and solar economy started and overstating the natural gas economy.

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<v Speaker 1>And as I look around the world, I don't see

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<v Speaker 1>his thesis being borne out in terms of actual stuff,

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<v Speaker 1>And just look at Europe actually energy crisis. Natural gas

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<v Speaker 1>demand has plommeted because wind and solar are fit for purpose,

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<v Speaker 1>and there's a whole bunch of other stuff that can

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<v Speaker 1>be done around that. So he's got several things that

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<v Speaker 1>are wrong, and unfortunately he never corrected any of that stuff,

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<v Speaker 1>and it confirms Bill Gates's biases for nuclear I think

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<v Speaker 1>there's a really good thing to talk about on this

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<v Speaker 1>where we say when were the biases formed and why

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<v Speaker 1>did they persist. That's a fundamental part of my analysis

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<v Speaker 1>at THEIRS. What's your take, Gerard Laura.

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<v Speaker 2>I don't know how that thoughts were put together, but

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<v Speaker 2>what I can tell you is that there's a lot

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<v Speaker 2>of people who are taking advantage of especially the primary

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<v Speaker 2>energy fallacy to just repeat at nauseum, we're not there.

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<v Speaker 2>I barely scrushed the surface and so on. And here

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<v Speaker 2>we're talking about one of my heroes. But now the

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<v Speaker 2>guy needs a retirement. It's Danielle Jergin. I was an

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<v Speaker 2>absolute fan when he wrote the Price, but when was

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<v Speaker 2>that thirty five years ago? And now it's all over.

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<v Speaker 2>I mean, he's going to that sera week where all

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<v Speaker 2>the oil executive oil themselves is like everything's going to

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<v Speaker 2>be okay, nothing's going to change. Because of course there

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<v Speaker 2>are the producers. They want people to continue to buy

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<v Speaker 2>their oil, the first few industry and those guys, they

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<v Speaker 2>are the firstylized in their head. And whilst they say, oh, look,

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<v Speaker 2>Bill Gates is saying the same thing as we do.

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<v Speaker 2>We need oil and nuclear, and then a lot of minions.

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<v Speaker 2>I don't want to name names, but I'm regularly in

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<v Speaker 2>fight with those guys on LinkedIn, people who are talking

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<v Speaker 2>about Michael.

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<v Speaker 3>But first, if thank you very much for summarizing that.

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<v Speaker 3>I mean that way I couldn't done matter.

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<v Speaker 4>I was great.

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<v Speaker 3>I think you end up talking about nuclear and I'm

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<v Speaker 3>not going to blame Smell for nuclear and Bill Gates.

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<v Speaker 3>So I'm actually going to blame Dave McKay, who was

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<v Speaker 3>a UK physicist who passed away a few years ago,

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<v Speaker 3>and he wrote a book called Sustainable Energy Without the

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<v Speaker 3>Hot Air. I really enjoyed that book as well, and

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<v Speaker 3>there was definitely errors in it, but the major conclusion

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<v Speaker 3>he had is we can't build an electricity system in

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<v Speaker 3>and around renewable energy. That was really what he was

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<v Speaker 3>saying and there was no way around this. So as results,

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<v Speaker 3>what we need to do is focus on energy efficiency

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<v Speaker 3>and nuclear. So I blame him rather than smell and

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<v Speaker 3>correct me if I'm wrong. I think what I conclude

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<v Speaker 3>out of Smill is the conclusion that the Gates got

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<v Speaker 3>from Spill was that the technologies are not there for

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<v Speaker 3>this transition. Because actually, probably when even when Gates started

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<v Speaker 3>looking at this, maybe a decade ago, Yeah, solo wasn't

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<v Speaker 3>what it is today. Batteries wasn't what. He has missed them,

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<v Speaker 3>and he's got the focused on technologies which you can

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<v Speaker 3>argue are not scalable. That's I think the mistake that

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<v Speaker 3>he's made. And I find that's interesting that Gates has

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<v Speaker 3>made that mistake given that he's a technologist. He just

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<v Speaker 3>I mean whatever, it's a technologist.

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<v Speaker 2>At least he put money where his mouth was. So

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<v Speaker 2>he has sunk an incredible amount looking for fusion or

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<v Speaker 2>SMOs or that. Probably you're more attuned on the subject

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<v Speaker 2>than me.

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<v Speaker 1>We have to go back further. This story for nuclear

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<v Speaker 1>is similar to the story for hydrogen for energy in

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<v Speaker 1>the late nineties early two thousands. For people who are

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<v Speaker 1>climate aware and environmentally aware, they're looking for technologies which

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<v Speaker 1>could solve the problem, and the options were fairly limited

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<v Speaker 1>at the time. For road transportation, batteries obviously weren't fit

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<v Speaker 1>for purpose at the time. It was a real leap

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<v Speaker 1>of faith to say we're going to have an electric

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<v Speaker 1>rowth even cars, never mind trucks. In two thousand. Similarly,

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<v Speaker 1>for nuclear, France and the United States had come out

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<v Speaker 1>of pretty successful rollouts of nuclear programs. Is squint. They

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<v Speaker 1>don't look too expensive, and so they needed something that

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<v Speaker 1>could scale, They needed something that could work. Both of

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<v Speaker 1>those things were met by nuclear and hydrogen, and so

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<v Speaker 1>a bunch of people decided that that was the answer.

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<v Speaker 1>And this wind and solar stuff that had been around

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<v Speaker 1>since the seventies and eighties clearly was just noturious stuff.

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<v Speaker 1>So it's easy to make CRO's decisions around two thousand

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<v Speaker 1>to two thousand and five, and Gates founded terror Power

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<v Speaker 1>is traveling Way nuclear reactive company in two thousand and

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<v Speaker 1>six around the same time that must put his money

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<v Speaker 1>into Tesla, just to compare and contrast. And so if

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<v Speaker 1>you put all your money into those things and you've

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<v Speaker 1>decided that those are the answers, then as time goes by,

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<v Speaker 1>say twenty fifteen, when Breakthrough Energy Ventures was founded. By

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<v Speaker 1>twenty fifteen, the answer was clearly that the data had

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<v Speaker 1>changed and if we kind of go back to keyms, well,

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<v Speaker 1>the data has changed, I will change my mind. What

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<v Speaker 1>do you do, sir? But unfortunately, people like Gates live

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<v Speaker 1>in this virtual reality that looks a lot like our

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<v Speaker 1>Earth but excludes stuff which doesn't confirm their biases. They

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<v Speaker 1>tend to have people in filters around them which give

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<v Speaker 1>them more what they want to know than what they

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<v Speaker 1>don't want to know. McKay and smill, we're speaking to

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<v Speaker 1>Bill Gates's cognitive biases around energy, and he wasn't receiving

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<v Speaker 1>solid stuff that challenged his biases from the people around him.

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<v Speaker 1>They weren't saying, Bill, you were right fifteen years ago,

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<v Speaker 1>but it's time to change your mind.

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<v Speaker 4>It's hard.

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<v Speaker 1>I've spoken to people who are bounced off the bubble

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<v Speaker 1>around Gates, and it really is there's a little court

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<v Speaker 1>there and people are very jealous of their position in

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<v Speaker 1>that court. They're very well funded to do stuff that

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<v Speaker 1>they enjoy, and it's hard to get past that. I

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<v Speaker 1>feel some regret for some of the people in that

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<v Speaker 1>court because they couldn't been doing better work.

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<v Speaker 4>But this is kind of the problem.

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<v Speaker 1>Is we look at that breakthrough Energy of Entries was

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<v Speaker 1>founded by six or seven billionaires, including Branson and people

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<v Speaker 1>like that, and they were all pro nuclear people. They

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<v Speaker 1>all wanted to solve the planet crisis. They all reached

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<v Speaker 1>their position and opinion on technologies a decade two decades earlier,

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<v Speaker 1>and weren't being challenged on those biases because that's not

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<v Speaker 1>the way their lives are set up. The stuff that

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<v Speaker 1>enabled them to be extraordinary earlier in their careers by

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<v Speaker 1>looking deeply into the business models, looking deeply for disruptive technologies,

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<v Speaker 1>understanding the stuff, taking big bets on nason technologies, and

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<v Speaker 1>then being ruthless business people to create their billions and

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<v Speaker 1>making mistakes but solving them over time. They're not doing

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<v Speaker 1>that anymore. Like if you look at Musk as an example,

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<v Speaker 1>it's another example of a poor climate aware billionaire Oligarch.

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<v Speaker 1>The boring company and hyper loop were really stupid ideas,

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<v Speaker 1>but he was post early Musk. In early Musk todays,

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<v Speaker 1>he just learned everything. If he was getting too disrupting

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<v Speaker 1>urban transit, he would read four hundred page books and

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<v Speaker 1>talk to global experts and form his opinion and have

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<v Speaker 1>challenging conversations. He no longer does that. Now he has

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<v Speaker 1>a win and then they buy time on boring machines

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<v Speaker 1>and he starts a company. It's a divorce from reality

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<v Speaker 1>and they no longer have people around them strong enough

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<v Speaker 1>to challenge and correct them when they get wrong. So

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<v Speaker 1>it's fascinating to watch, and it's deeply unfortunate because we

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<v Speaker 1>have this hagiography of billionaires, of the successful multi billionaires

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<v Speaker 1>who are so influential they go to Davas and hobnobbed

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<v Speaker 1>with world leaders, and people pay attention to them when

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<v Speaker 1>their opinions are ten and twenty years out of date.

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<v Speaker 2>On Gates credits, he was very instrumental in pushing for

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<v Speaker 2>the IR in the US, although it's a bit self

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<v Speaker 2>serving because a lot of his company got a lot

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<v Speaker 2>of subsidies along the way. That's a badogs. Are they

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<v Speaker 2>forces for good or not? Certainly influence. They are huge

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<v Speaker 2>in terms of money. Even with all the money in

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<v Speaker 2>the world. I can tell you, Bill Gates, if you

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<v Speaker 2>listen the nuclear industry, can you, they can outspend everything

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<v Speaker 2>you have, So don't go into nuclear If you want

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<v Speaker 2>to give something to your ch learn.

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<v Speaker 3>Let's change the team slightly, guys. Let's assume Bill Gates

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<v Speaker 3>manages to listen to this podcast. So what do we

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<v Speaker 3>tell them? I give you mind one point. I just

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<v Speaker 3>say at one point, okay, the future of this energy

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<v Speaker 3>transition is all about standardization and scale. I don't care

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<v Speaker 3>what it is that you know. If I don't look

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<v Speaker 3>at transformers across the world, they're all customized. This is ridiculous.

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<v Speaker 3>They need to be standardized. Everything standardized. And if you

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<v Speaker 3>look at the three penologies that have scaled most in

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<v Speaker 3>our energy space, their wind turbines, their solar panels, their batteries,

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<v Speaker 3>and they are all standardized and scaled.

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<v Speaker 4>So that's for me.

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<v Speaker 3>The message to him is focus on stuff that you

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<v Speaker 3>can standardize and scale quickly if you want to make

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<v Speaker 3>a different climate and to move this energy transition.

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<v Speaker 4>That's my one.

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<v Speaker 3>What's yours, Michael?

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<v Speaker 1>I would lean into that and understand manufacturing physical things

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<v Speaker 1>Gates is brilliant, but his big successes were software things,

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<v Speaker 1>which is an industry I'm intimately familiar with. It's very

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<v Speaker 1>different than manufacturing hardware things. He wasn't a person who

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<v Speaker 1>built laptops and cell phones. He was a person who

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<v Speaker 1>built software. So understand the differences, because that's fundamental to

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<v Speaker 1>understanding wind and solar's dominance. And batteries dominance. And the

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<v Speaker 1>second thing I'd say is take a moment ask yourself

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<v Speaker 1>why it is you have this confirmation bias which is

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<v Speaker 1>preventing you from leaning heavily into wind, solar and batteries

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<v Speaker 1>when they're so obviously winning. Ask yourself why the system

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<v Speaker 1>you've put up set up around you over the past

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<v Speaker 1>twenty twenty five years is not enabling you to have

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<v Speaker 1>the success you had in software and disease prevention. And

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<v Speaker 1>to be clear, I overlap with Gates and disease prevention.

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<v Speaker 1>I helped build the world's most sophisticated communical disease management

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<v Speaker 1>solution here in Canada after Stars one that was used

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<v Speaker 1>in the Middle East during COVID. And so I get

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<v Speaker 1>how transformative the Bill Mosigates foundations efforts and global disease

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<v Speaker 1>eradication are. That's because they started in both cases with reality,

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<v Speaker 1>not bias. And so Bill go back to fundamentals. You're

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<v Speaker 1>why you're losing in this domain because you can win excellent.

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<v Speaker 2>Okay, So big guys like to read, So I suggest

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<v Speaker 2>you read the professor Benfiedberg How big things Get Done.

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<v Speaker 2>I suggest you follow brilliant young people like not Burllard,

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<v Speaker 2>like Dave Jones, they are like tons of them with

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<v Speaker 2>fresh ideas, fresh data. And we'll do the episode on

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<v Speaker 2>buy through. And I can tell you they've done one

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<v Speaker 2>hundred deeps in ten years, which is a lot for

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<v Speaker 2>a VC fund. It's a lot, you know, it's like

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<v Speaker 2>one a month's and I don't know if it's the

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<v Speaker 2>mass effect. There are really great stuff, what for you.

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<v Speaker 2>There's a lot of crap as well, but that's probably

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<v Speaker 2>for another episode.

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<v Speaker 4>Gentlemen, ex up, my friends. This was good.

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<v Speaker 1>Okay, Girard has had his fulfilling moment. He wanted to

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<v Speaker 1>say this for a while.

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<v Speaker 2>I didn't tell then way out of the system. We

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<v Speaker 2>won't be invited. That's Serah week, that's for sure.

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<v Speaker 3>I'm looking forward to the other one because that quote

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<v Speaker 3>to be care Gates is still highly resisting. This is great.

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<v Speaker 3>We'll start the next time.

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<v Speaker 4>This is great.

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<v Speaker 3>That's a good introduction, very good.

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<v Speaker 1>I'm just going to say there's a sign of like

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<v Speaker 1>Leebreak keeps getting invited two major hydrogen insider events to

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<v Speaker 1>keynote yep, and he's definitely not singing from their song cheap.

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<v Speaker 1>So I suspect some of these bubbles of confirmation, bias,

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<v Speaker 1>and tribalism are breaking down. They're looking for answers to

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<v Speaker 1>why they're not winning, and so the answers are out there.

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<v Speaker 2>Okay, guys, great too. Kim to you, I'm not sure

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<v Speaker 2>we're going to be invited that next s week, although

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<v Speaker 2>you never know, of.

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<v Speaker 3>Course we're going to be invited.

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<v Speaker 4>What I went anyway, Michael.

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<v Speaker 1>I think if Leebright gets invited to hydrogen insider conferences,

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<v Speaker 1>we should be invited to nuclear and big oil conferences.

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<v Speaker 3>Yippie, thank you for listening to Redefining Energy. Don't forget

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<v Speaker 3>to rate the show and subscribe on Apple, Podcast, Spotify,

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<v Speaker 3>or the platform of your choice