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Opinion: How can subsidized pipelines compete with future green energy?
After Barack Obama gave the thumbs down on Keystone XL, the accusations, now flying, were to be expected. The analysis delivered by the media never really touched upon the biggest factor in the viability of Keystone XL. The media has also failed to recognize the same risk in the Energy East Pipeline, as well.
No, I am not talking about the Kalamazoo and Nexen pipeline failures, I am talking about the viability of the product these pipelines transport: dilbit. It can't compete. That is an important fact, especially in a "free market".
What most journalists don't seem to realize, nor have I expected them to ever understand, it the evolution of technology. While the cost of oil is driven by market forces, the cost of technology is also driven by innovation. Innovation is a tricky business, stand still and you lose.
In 2003, I predicted that the cost of both solar energy and wind energy would be cheaper than fossil fuels in 2015. I was correct. No, I don't have a crystal ball, I understand how manufacturing science innovates products. It's one of those things designers need to learn since the wheel has already been invented. It's also one of the biggest killers of businesses. Slip behind the curve and you are finished.
By charting technology manufacturing costs, we can establish rates of innovation. If we look at the different technologies versus fossil fuels, we can see that some technologies will be about 10 times cheaper than fossil fuels energy in 2025. It doesn't take an economist to figure out that fossil fuels can't compete in future markets. In fact, removing fossil fuel subsidies now would make most fossil fuel products too expensive to sell.
As a designer, I can tell you that no pipeline company can remain solvent when folks can buy a superior, and ethical, product for 10 times cheaper. Did I mention carbon tax? No, no need.