I sat, chin on fist, in a restaurant on the grubby periphery of Mercado Del Puerto in Montevideo, Uruguay. My mind had finally turned to a subject that I’d shoved under the rug several weeks ago: an email from the Watson Foundation titled “Final Presentation Details.” My brain struggled with this topic as my mouth delighted in some local delicacy of seared strips of chicken breast wrapped around cheese, ham, peppers, and spices. Grilled provolone with herbs accompanied – a decidedly high cholesterol affair, but definitely worth the approaching infarction.
How does one summarize a year, especially a year spread over four continents, dozens of jobs, hundreds of relationships, thousands of thoughts, struggles, successes, and failures? It’s the kind of question you’d rather avoid, really. But it’s also the kind of question that you know will be worth answering – the kind of question that could produce valuable introspection and mental consolidation. It’s also, incidentally, the kind of question that I’m contractually required to answer publicly next week.
First there was Iceland. Akureyri, Husavik, Reykjavik in that order. I lived in a fjord with a middle-aged couple, in a village with a young group of farmers, teachers, and whale watching guides, and then in the Salvation Army Guesthouse in Reykjavik (where I found nothing resembling salvation, unless of course salvation is actually an immortal sinus infection, a haunting Colombian fortune teller, a rotting-while-living elderly Viking, a pair of Nigerians cooking fatally spicy rice dishes, and a ghoulish Sicilian with expensive electronics).
Iceland’s isolationist and naturalist culture challenged my concepts of “progress” and “development,” and made me account for values beyond conventional economic metrics. I lived for three months in a national community – the only nation I’ve ever known where everyone seems connected to everyone else in a tight web. Iceland’s proverbial commons are slightly less tragic because it’s quite impossible to shirk social responsibilities in the island’s small population of 300,000. It’s a tiny community where everyone is your cousin or friend.
I noted how Icelanders pride themselves on their deep roots and shared history, on their traditions, their agrarian and fishing lifestyles, and their ruggedness. I also noted the pain and cultural damage caused by foreign companies, mainly aluminum smelters and banks, slowly overprinting Icelandic traditions with the seduction of greater material wealth and status.
I saw Icelanders pelt their own parliament with fireworks and rocks while politicians fled through underground passages after the total mismanagement of the nation’s financial system. Icelander’s felt afraid because outsiders seemed to own more and more of the country and its resources each day. Icelanders felt outraged when they woke up with the largest national debt as a proportion of GDP in the world, and they felt tricked when they learned that recovery plans centered around multinational firms damming waterfalls and paying minuscule prices for the power. Icelanders saw foreign banks financing the country’s largest construction projects, foreign firms buying the power for almost nothing, while Iceland seemed to be left holding the bag – fewer waterfalls, trampled ecosystems, and tainted landscapes.
Of course there are two sides to each story, and I saw the flip side while working with, for, and around those same multinational companies vilified by Iceland’s left wing. I found many great mentors and friends working in the power industry, and I can say with confidence that none of them felt that they were exploiting or undermining Iceland – they were developing businesses that they believed would create value.
I also saw firsthand the vital importance of economic incentives. Recovery depends on investment, and investment will flow to profit centers. Iceland’s government had a duty to attract investment, and cheap energy was an important tool in that mission. Many Icelanders saw unjustly low power prices for foreign industry, while businesses saw an incentive so set up shop, import technologies, and invest in Iceland’s infrastructure.
One of my greatest takeaways from the whole year was actually that humans are all very similar regardless of location and social strata – we’re all motivated by the same fears, hopes, worries, and dreams. We all want something a little better for our families and ourselves; we all want a little more security and a little less trepidation. I began to see patterns and repetitions of human characteristics and tendencies as I moved through my year abroad.
One of our shared human motives is the drive to create "value." I realized that the conflict arising between conservation-oriented Icelanders and pro-development business forces is simply a conflict over the meaning and definition of “value.” Consider the three prominent opinions about Iceland’s development choices, for example, damming rivers to build hydropower plants to power aluminum smelters (now Iceland’s largest industry):
1) One group of environmentalists argues that Iceland has the responsibility to build as many clean-powered aluminum smelters, data centers, and other energy-intensive industrial sites as possible, because doing so can replace coal-powered industry in other nations. Iceland’s “value” is its ability to offset and replace dirty industry abroad by offering cheap and clean electricity (100% hydro and geothermal powered electric grid). The fungible nature of commodities and the interconnectedness of global markets makes this a feasible argument.
2) A different breed of environmentalists argues that Iceland’s sensitive wetland ecosystems, bird sanctuaries, breeding grounds, and pristine landscapes contain inherent value, and should remain untouched to preserve that value. This argument claims that dams flood valuable ecological areas, and power lines destroy valuable vistas – untouched nature is “value.”
3) The pro-development faction argues that building out Iceland’s industry will dramatically raise the average standard of living, bring wealth and prosperity to the nation, and help it fight out from under a crushing national debt (the result of an irresponsibly privatized financial system). “Value,” then, is monetary and material.
Which is the right definition of value? This is a question for which I have no answer, and perhaps there is no single right answer. However, I do know that the winning perspective is generally the one that can mobilize the most support (voices and dollars), and that the third option generally has the advantage because promising money and material wealth plays on the power of greed, which is often more powerful than altruism.
Then an Icelandic farmer raised a fourth idea:
4) Why not just use less aluminum?
That seemed like a very obvious and elegant solution, until I went to China.
China impressed upon me the importance of population pressure in emerging economies. This century will be the story of population pressures, and I believe the story’s hallmark will be scarcity of resources in the face of unsustainably accelerating demand, combined with the destabilization and degradation of ecosystems that provide critical resources. I am not alone or extreme in this opinion, as virtually every important metric of macro ecosystem health, beginning with oceans and ending with topsoil, suggests that we are passing critical and sometimes irreversible tipping points. This century will be the struggle to sustain a lifestyle built on fleeting abundance - an abundance historically enjoyed by few, but now demanded by all.
China: 1 billion people with virtually nothing, and 1 billion people who want to live the consumption-fueled lifestyles of characters in American media – that’s the quandary of China, and that’s the nightmare we’re entering. India? Africa? South America? Same story.
In China, the vast population creates immense economic, social , and political pressures. The economic pressure is inflationary (see any recent article about Chinese real estate valuations or the P/E ratios of stocks). The social pressure is one of generational divide (children use computers and speak English while parents are first generation urban migrants) and accelerated consumerism (new wealth mixes with an influx of hyperefective western branding/marketing to create extreme consumerism). The political pressure is to somehow manage and direct this social-economic momentum by increasing liberties and freedoms without changing things so quickly that they become uncontrollable.
It’s easy for westerners to criticize the Chinese government from the outside, but go there and I guarantee your opinions will change. Experience the mania, energy, and barely-controlled chaos, and think about what you would do in Wen Jiabao’s shoes. I gained a new respect for China’s top politicians, and I fully believe that they have the toughest jobs in the world right now.
I also realized why we can’t “just use less aluminum” or oil, coal, steel, wood, water, or virtually any other commodity. Sure, Americans and Europeans could use less, but it’s awfully tough to tell someone with nothing at all to use less and to not desire more. The Chinese (Indians, Brazilians, etc) are racing towards development and away from poverty, and there’s no environmental campaign in the world that will stop a starving person from reaching for food, cars, houses, televisions, etc. The only real question is: how efficiently and responsibly will China develop?
Population pressure in a finite environment:
How does one summarize a year, especially a year spread over four continents, dozens of jobs, hundreds of relationships, thousands of thoughts, struggles, successes, and failures? It’s the kind of question you’d rather avoid, really. But it’s also the kind of question that you know will be worth answering – the kind of question that could produce valuable introspection and mental consolidation. It’s also, incidentally, the kind of question that I’m contractually required to answer publicly next week.
First there was Iceland. Akureyri, Husavik, Reykjavik in that order. I lived in a fjord with a middle-aged couple, in a village with a young group of farmers, teachers, and whale watching guides, and then in the Salvation Army Guesthouse in Reykjavik (where I found nothing resembling salvation, unless of course salvation is actually an immortal sinus infection, a haunting Colombian fortune teller, a rotting-while-living elderly Viking, a pair of Nigerians cooking fatally spicy rice dishes, and a ghoulish Sicilian with expensive electronics).
Iceland’s isolationist and naturalist culture challenged my concepts of “progress” and “development,” and made me account for values beyond conventional economic metrics. I lived for three months in a national community – the only nation I’ve ever known where everyone seems connected to everyone else in a tight web. Iceland’s proverbial commons are slightly less tragic because it’s quite impossible to shirk social responsibilities in the island’s small population of 300,000. It’s a tiny community where everyone is your cousin or friend.
I noted how Icelanders pride themselves on their deep roots and shared history, on their traditions, their agrarian and fishing lifestyles, and their ruggedness. I also noted the pain and cultural damage caused by foreign companies, mainly aluminum smelters and banks, slowly overprinting Icelandic traditions with the seduction of greater material wealth and status.
I saw Icelanders pelt their own parliament with fireworks and rocks while politicians fled through underground passages after the total mismanagement of the nation’s financial system. Icelander’s felt afraid because outsiders seemed to own more and more of the country and its resources each day. Icelanders felt outraged when they woke up with the largest national debt as a proportion of GDP in the world, and they felt tricked when they learned that recovery plans centered around multinational firms damming waterfalls and paying minuscule prices for the power. Icelanders saw foreign banks financing the country’s largest construction projects, foreign firms buying the power for almost nothing, while Iceland seemed to be left holding the bag – fewer waterfalls, trampled ecosystems, and tainted landscapes.
Of course there are two sides to each story, and I saw the flip side while working with, for, and around those same multinational companies vilified by Iceland’s left wing. I found many great mentors and friends working in the power industry, and I can say with confidence that none of them felt that they were exploiting or undermining Iceland – they were developing businesses that they believed would create value.
I also saw firsthand the vital importance of economic incentives. Recovery depends on investment, and investment will flow to profit centers. Iceland’s government had a duty to attract investment, and cheap energy was an important tool in that mission. Many Icelanders saw unjustly low power prices for foreign industry, while businesses saw an incentive so set up shop, import technologies, and invest in Iceland’s infrastructure.
One of my greatest takeaways from the whole year was actually that humans are all very similar regardless of location and social strata – we’re all motivated by the same fears, hopes, worries, and dreams. We all want something a little better for our families and ourselves; we all want a little more security and a little less trepidation. I began to see patterns and repetitions of human characteristics and tendencies as I moved through my year abroad.
One of our shared human motives is the drive to create "value." I realized that the conflict arising between conservation-oriented Icelanders and pro-development business forces is simply a conflict over the meaning and definition of “value.” Consider the three prominent opinions about Iceland’s development choices, for example, damming rivers to build hydropower plants to power aluminum smelters (now Iceland’s largest industry):
1) One group of environmentalists argues that Iceland has the responsibility to build as many clean-powered aluminum smelters, data centers, and other energy-intensive industrial sites as possible, because doing so can replace coal-powered industry in other nations. Iceland’s “value” is its ability to offset and replace dirty industry abroad by offering cheap and clean electricity (100% hydro and geothermal powered electric grid). The fungible nature of commodities and the interconnectedness of global markets makes this a feasible argument.
2) A different breed of environmentalists argues that Iceland’s sensitive wetland ecosystems, bird sanctuaries, breeding grounds, and pristine landscapes contain inherent value, and should remain untouched to preserve that value. This argument claims that dams flood valuable ecological areas, and power lines destroy valuable vistas – untouched nature is “value.”
3) The pro-development faction argues that building out Iceland’s industry will dramatically raise the average standard of living, bring wealth and prosperity to the nation, and help it fight out from under a crushing national debt (the result of an irresponsibly privatized financial system). “Value,” then, is monetary and material.
Which is the right definition of value? This is a question for which I have no answer, and perhaps there is no single right answer. However, I do know that the winning perspective is generally the one that can mobilize the most support (voices and dollars), and that the third option generally has the advantage because promising money and material wealth plays on the power of greed, which is often more powerful than altruism.
Then an Icelandic farmer raised a fourth idea:
4) Why not just use less aluminum?
That seemed like a very obvious and elegant solution, until I went to China.
China impressed upon me the importance of population pressure in emerging economies. This century will be the story of population pressures, and I believe the story’s hallmark will be scarcity of resources in the face of unsustainably accelerating demand, combined with the destabilization and degradation of ecosystems that provide critical resources. I am not alone or extreme in this opinion, as virtually every important metric of macro ecosystem health, beginning with oceans and ending with topsoil, suggests that we are passing critical and sometimes irreversible tipping points. This century will be the struggle to sustain a lifestyle built on fleeting abundance - an abundance historically enjoyed by few, but now demanded by all.
China: 1 billion people with virtually nothing, and 1 billion people who want to live the consumption-fueled lifestyles of characters in American media – that’s the quandary of China, and that’s the nightmare we’re entering. India? Africa? South America? Same story.
In China, the vast population creates immense economic, social , and political pressures. The economic pressure is inflationary (see any recent article about Chinese real estate valuations or the P/E ratios of stocks). The social pressure is one of generational divide (children use computers and speak English while parents are first generation urban migrants) and accelerated consumerism (new wealth mixes with an influx of hyperefective western branding/marketing to create extreme consumerism). The political pressure is to somehow manage and direct this social-economic momentum by increasing liberties and freedoms without changing things so quickly that they become uncontrollable.
It’s easy for westerners to criticize the Chinese government from the outside, but go there and I guarantee your opinions will change. Experience the mania, energy, and barely-controlled chaos, and think about what you would do in Wen Jiabao’s shoes. I gained a new respect for China’s top politicians, and I fully believe that they have the toughest jobs in the world right now.
I also realized why we can’t “just use less aluminum” or oil, coal, steel, wood, water, or virtually any other commodity. Sure, Americans and Europeans could use less, but it’s awfully tough to tell someone with nothing at all to use less and to not desire more. The Chinese (Indians, Brazilians, etc) are racing towards development and away from poverty, and there’s no environmental campaign in the world that will stop a starving person from reaching for food, cars, houses, televisions, etc. The only real question is: how efficiently and responsibly will China develop?
Population pressure in a finite environment:
Efficiency is a key to China’s story. China uses 4-6 times more energy per unit of GDP than developed western economies, so while China isn’t going to stop increasing its consumption, it can dramatically increase its efficiency. China could boost efficiency such that it could increase energy consumption while decreasing the amount of fuel used, the amount of pollution produced, and the amount of money spent on electricity. If China can find a responsible development strategy through new technologies and efficiency-oriented planning, then China can export that model to other developing nations.
I spent my working life in China learning how a waste heat recovery power plant develops, from soup to nuts. I went to cement and steel factories with wasted heat resources to be used as fuel, I spent days at the factories where metal sheets are rolled and welded into pressure vessels, I attended inspections, I toured assembly facilities, I met with clients and buyers of these systems, and I witnessed a highly publicized power plant commissioning. I became convinced that increasing efficiency is a major opportunity to align an environmental good with the human profit motive – a “value” that drives the majority of human activity, and the beginnings of a solution to problems like Iceland’s growing industrial-economic-environmental rift.
Following my four months in China I spent two months in Spain with wind farm financiers. During this experience I realized the following: the world’s affluent and corporations will pursue the next dollar for the same reasons as the impoverished Chinese laborer. The Chinese drive to improve and prosper is the same exact drive that the Spanish CFO takes into his boardroom. The profit motive is universal, highly powerful, and does not disappear with prosperity. This is another reason why we cannot “just use less aluminum,” because in all strata of life you will find large contingencies of people who are plainly addicted to “more.” That’s human, or so it seems. The human drive for more will often conflict for our collective preference for less (or at least less waste).
Then I went to Argentina, where I found opportunities to put all my learning together. I launched into multiple entrepreneurial pursuits. I hit the ground running as www.thinkgeoenergy.com published an interview article about me and I published my second piece through the International Geothermal Association. Those credentials allowed me to rebrand myself from student to project manager, and a number of groups appealed to me for help in that capacity.
First there was an early-stage 20MW biomass project in northern Argentina. The local promoters had developed all the plans, biomass supplier relationships, and financial models, and wanted me to help find financing for their project. I initiated a relationship with a massive power project developer/investor in the United States, pursued it aggressively, but ultimately the political thorns around Argentina scared investors away and the deal collapsed.
I spent my working life in China learning how a waste heat recovery power plant develops, from soup to nuts. I went to cement and steel factories with wasted heat resources to be used as fuel, I spent days at the factories where metal sheets are rolled and welded into pressure vessels, I attended inspections, I toured assembly facilities, I met with clients and buyers of these systems, and I witnessed a highly publicized power plant commissioning. I became convinced that increasing efficiency is a major opportunity to align an environmental good with the human profit motive – a “value” that drives the majority of human activity, and the beginnings of a solution to problems like Iceland’s growing industrial-economic-environmental rift.
Following my four months in China I spent two months in Spain with wind farm financiers. During this experience I realized the following: the world’s affluent and corporations will pursue the next dollar for the same reasons as the impoverished Chinese laborer. The Chinese drive to improve and prosper is the same exact drive that the Spanish CFO takes into his boardroom. The profit motive is universal, highly powerful, and does not disappear with prosperity. This is another reason why we cannot “just use less aluminum,” because in all strata of life you will find large contingencies of people who are plainly addicted to “more.” That’s human, or so it seems. The human drive for more will often conflict for our collective preference for less (or at least less waste).
Then I went to Argentina, where I found opportunities to put all my learning together. I launched into multiple entrepreneurial pursuits. I hit the ground running as www.thinkgeoenergy.com published an interview article about me and I published my second piece through the International Geothermal Association. Those credentials allowed me to rebrand myself from student to project manager, and a number of groups appealed to me for help in that capacity.
First there was an early-stage 20MW biomass project in northern Argentina. The local promoters had developed all the plans, biomass supplier relationships, and financial models, and wanted me to help find financing for their project. I initiated a relationship with a massive power project developer/investor in the United States, pursued it aggressively, but ultimately the political thorns around Argentina scared investors away and the deal collapsed.
Then another local promoter contacted me looking for help launching a 5MW geothermal project on existing boreholes in the Argentine Andes. I agreed to help, but quickly learned the following:
1) There is no geothermal law in Argentina, and all geothermal development must be achieved through expensive mining concessions (which this person did not have access to).
2) The state energy company is not a trusted purchaser of power, and investors will not support a project with a government power purchase agreement (PPA)
3) Based on #1 and #2, I concluded that the only viable strategy is for mining companies to use their existing leases to develop geothermal power plants near a mining operation, and “self-supply” the mine with that power instead of burning imported diesel. In other words, the consumer and producer must be the same entity before a bank will make a loan.
Those were valuable and righteous insights, and form the thesis of a new paper that I am co-authoring with a PhD geothermal researcher in Peru. Unfortunately those insights also crushed the hopes of my small developer friend. So, another optimistic dream died.
Then came my attempt to consult to a waste heat recovery startup. The CFO of this firm had just raised $5 million to launch a new WHR technology firm based on a package of international patents. I offered to use my contacts abroad to help the firm develop a supply chain and intellectual property defense strategy in China.
I spent a week working practically without stop. I didn’t leave my apartment except for once a day to grab a quick lunch and/or workout, and I’d work late into the nights. In one week I mobilized an international team of consultants including an Ex-McKinsey China/manufacturing specialist, an Ex-Accenture aerospace/mechanical engineer with a masters degree in renewable energy systems, and a fluent Mandarin speaker who has toured dozens of Chinese energy systems manufacturing facilities. I built financial models, schedules, a proposal with three different scopes and budgets, and most importantly, a 2-page list of contacts with expertise in manufacturing, IP protection in China, law, and transportation, as well as a list of specialized suppliers capable of manufacturing all the required heat exchangers, pressure vessels, and micro turbine-generator units.
The bulk of the preliminary planning was done, and I was having lawyers draft contracts when I got a simple 2-line email stating that the company's financial partners strongly preferred to not take the IP risk of manufacturing a new technology in China, and instead opted for a US manufacturing base. Although disappointing at the time, the experience now encourages me. I was able to accomplish a great deal and organize a large project quickly - something I certainly couldn't have mustered before my fellowship.
This summary of my year abroad clearly omits a mountain of details. There were thousands of beautiful, hilarious, depressing, shocking, and eye-opening experiences along the way. My most valuable learning probably happened outside of work experiences. I learned volumes about my self, others, and the way the world works. I learned to plan, adapt, connect, improvise, and negotiate, and I learned how to imagine solutions to strange and unfamiliar problems.
1) There is no geothermal law in Argentina, and all geothermal development must be achieved through expensive mining concessions (which this person did not have access to).
2) The state energy company is not a trusted purchaser of power, and investors will not support a project with a government power purchase agreement (PPA)
3) Based on #1 and #2, I concluded that the only viable strategy is for mining companies to use their existing leases to develop geothermal power plants near a mining operation, and “self-supply” the mine with that power instead of burning imported diesel. In other words, the consumer and producer must be the same entity before a bank will make a loan.
Those were valuable and righteous insights, and form the thesis of a new paper that I am co-authoring with a PhD geothermal researcher in Peru. Unfortunately those insights also crushed the hopes of my small developer friend. So, another optimistic dream died.
Then came my attempt to consult to a waste heat recovery startup. The CFO of this firm had just raised $5 million to launch a new WHR technology firm based on a package of international patents. I offered to use my contacts abroad to help the firm develop a supply chain and intellectual property defense strategy in China.
I spent a week working practically without stop. I didn’t leave my apartment except for once a day to grab a quick lunch and/or workout, and I’d work late into the nights. In one week I mobilized an international team of consultants including an Ex-McKinsey China/manufacturing specialist, an Ex-Accenture aerospace/mechanical engineer with a masters degree in renewable energy systems, and a fluent Mandarin speaker who has toured dozens of Chinese energy systems manufacturing facilities. I built financial models, schedules, a proposal with three different scopes and budgets, and most importantly, a 2-page list of contacts with expertise in manufacturing, IP protection in China, law, and transportation, as well as a list of specialized suppliers capable of manufacturing all the required heat exchangers, pressure vessels, and micro turbine-generator units.
The bulk of the preliminary planning was done, and I was having lawyers draft contracts when I got a simple 2-line email stating that the company's financial partners strongly preferred to not take the IP risk of manufacturing a new technology in China, and instead opted for a US manufacturing base. Although disappointing at the time, the experience now encourages me. I was able to accomplish a great deal and organize a large project quickly - something I certainly couldn't have mustered before my fellowship.
This summary of my year abroad clearly omits a mountain of details. There were thousands of beautiful, hilarious, depressing, shocking, and eye-opening experiences along the way. My most valuable learning probably happened outside of work experiences. I learned volumes about my self, others, and the way the world works. I learned to plan, adapt, connect, improvise, and negotiate, and I learned how to imagine solutions to strange and unfamiliar problems.
Lessons humbled me, and forced me to realize that I still have a huge amount to learn. The energy industry is so complex, and I’ll need a bit more patience and experience before I can learn to develop projects the way that I want to. Luckily I’ve found a great group of mentors, who I’ve already started working for. My first assignment was to present our technology to a geothermal training group from the United Nations in Iceland!
In Montevideo, during my Uruguayan layover en route to Santiago, people kept calling me “caballero,” or cowboy. I couldn’t help but feel like that fit. I’d been roaming the world homeless and alone, chasing random working opportunities on distant frontiers, surviving a range of conditions and lifestyles from the very best to the very worst, and adapting to new social and working environments over and over. I felt haggard, weary and a bit jaded, but also full of adventure and excitement. Those seem to be cowboy-like feelings and activities. So, for the remainder of my trip I considered myself to be an Electron Cowboy. Giddyup.
In Montevideo, during my Uruguayan layover en route to Santiago, people kept calling me “caballero,” or cowboy. I couldn’t help but feel like that fit. I’d been roaming the world homeless and alone, chasing random working opportunities on distant frontiers, surviving a range of conditions and lifestyles from the very best to the very worst, and adapting to new social and working environments over and over. I felt haggard, weary and a bit jaded, but also full of adventure and excitement. Those seem to be cowboy-like feelings and activities. So, for the remainder of my trip I considered myself to be an Electron Cowboy. Giddyup.
