07 September 2013

Abundance

I'm reading through Abundance by Peter H Diamandis and Steven Kotler.  Half way through the book, the book can be summarized as "sloppy".  

  • At one point, the exponential notation isn't not property typeset, and numbers like 10^16 come out as 1016.
  • At another point the authors mention one and a half billion people around the world, and then, in the next sentence, say: the numbers in Africa are larger.
This lack of proofreading and poor choice of wording doesn't destroy the thesis, but it sure takes away from the enjoyment of the book.

A problem more critical to the thesis occurs in Chapter 13 in the subsection Synthetic Life to the Rescue where the authors discuss Craig Venters work with Exxon to develop bio-fuel producing algae.  There are a number of problems with this project.
  • The goal is to produce 10,000 gallons of fuel per acre in a two-square mile plant, enough to fuel 26,000 cars.  Of course, if you use photovoltaics on the same two-square miles, you can fuel about twice as many cars.
  • The plant requires a concentrated source of carbon such as from a coal burning power plant.  Converting the CO2 from coal into bio-fuel is referred to as sequestering the carbon.  Except that when you burn the bio-fuel for energy, you put all that carbon right back into the atmosphere.
Here's one of the entrepreneurs that are supposed to be leading the way to a world of abundance using a really silly idea to prolong the life of coal power plants while producing less abundance than one could achieve with simple alternative approaches.

Later in chapter 13 we get to Myhrvold's 4th generation nuclear power plant which he hopes to have in operation by 2020 at a price below coal.  Diamandis' keeps saying we humans have a problem thinking exponentially, and here is a good example of Myhrvold and Diamandis failing to think exponentially.  Saying that you're going to have a product available in a few years that will out-perform current products isn't enough.  The competition, in this case Solar and Wind, is improving exponentially and will also have a much better product available in a few years.

It isn't enough to undercut coal by 2020.  Wind and Solar will do that.  By 2020, they'll grow by close to a factor of 10 and their prices will drop in half. That's what Myhrvold has to plan on beating.

Elsewhere Diamandis bemoans Solar and Wind for being intermittent providers of energy. He forgets at that point (but remembers later in a different context) that society has spent a lot of time and money getting people to shift energy consumption from daytime when people want to use the energy to nighttime when energy is currently cheaper.  Until 2020, wind and solar won't provide enough energy for us to need to worry about them being intermittent resources.  By that time we will have time shifted some electric consumption. For example, we currently pump water to the tops of hills to pressurize city water supplies during the night time but can just as easily do the pumping when the sun is shining or the wind is blowing.  (Water pumping accounts for a few percent of our overall electricity consumption.)  Meanwhile, electric cars will be far more common and can be charged during the daytime or when the wind is blowing.

There are a lot of interesting ideas out there, but Venture Capitalists know:  90% of the ideas that sound good now will not pan out; 9% of the ideas will work okay; 1% of the ideas are where your profits are going to come from.