The Unexpected Perspective
The Implications of Darwin and the Big Bang for Christians ... and Everyone Else


Sometimes the best way to solve a problem is to enlist the help of the other side. Consider how that happened in Georgia.

            So imagine you're a card-carrying member of the Sierra Club.  If you fit the profile of the typical member, you're liberal, well-educated, and especially concerned about the environment.  After all, the goal of the Sierra Club is to protect the environment against any and all hazards.  The latest one, of course, is climate change.

            You need allies to move your agenda forward.  Have you considered the Tea Party? 

            The Tea Party?  Besides being very conservative and pro-Republican, the typical Tea Party member appears to be a climate change skeptic.  Are you crazy?

            Maybe?  Maybe not?  At least some members of the Sierra Club apparently think not, as the Sierra Club has teamed up with the Tea Party in Georgia to help push the adoption of solar energy.  As a result, Georgia has gone from having virtually no solar in 2013 now to being number eight of all the states in solar adoption.

            Sometimes politics makes for strange bedfellows!

            It's pretty obvious why the Sierra Club wants solar in Georgia, so why would it become a priority for the Tea Party?  So far as I know, the Tea Party has not had a "Paul on the Road to Damascus" conversion about climate change.

            The answer: a dislike of excessive nuclear power costs, as well as a dislike of monopolies.  Debbie Dooley, a Tea Party activist in Georgia, has summed it up well: "It's all about message.  Free market, competition, choice, expanding the energy portfolio and energy mix.  I don't want excessive regulation."  She's not alone.

            The recent evidence in Georgia suggests that Tea Party advocates like solar because it's very cost competitive, and also because members don't like being forced to pay for gigantic cost overruns on an as-yet-unfinished nuclear power plant.

            Others who are trying to overcome skepticism about climate change ought to take notice.  Many who fear climate change have been preaching a message of doom and gloom.  It hasn't moved the typical climate change skeptic one inch.  If anything, the louder that advocates of action to stop climate change yell, the more the typical climate change skeptic digs his or her heels in.

            Absolutely no one should be surprised by this.  After all, when was the last time you changed your mind because someone told you a bunch of facts; then, when you expressed skepticism, that person called you ignorant and stupid? 

            The answer: precisely never!  No one changes their mind because someone spouts facts and figures. 

            But minds can be changed.  One way to do is to follow three steps.

            Step 1: acknowledge that it's understandable why the person feels the way they do.

            Step 2: reframe the problem in a way that addresses the skeptic's concerns.

            Step 3: show the skeptic how the "reframing" can benefit them.

            This approach can work well, but it is rarely used.

            But it appears the Sierra Club in Georgia has done that in enlisting the help of the Tea Party.  Let's look how they did this.

            First, they didn't say that the Tea Party was ignorant on the issue.  Instead, they sought their assistance.

            Second, they didn't try to get help by reciting the usual "climate change doomsday scenarios".  Instead, they reframed this as an issue of free markets, competition, choice, and reduction of excessive regulations.  By making these types of arguments, they got the attention of the Tea Party.

            Third, they're getting it done without relying on the usual "requirements" to encourage alternative energy, namely tax credits, net metering, or legislative action. 

This should be exciting news for those of us who want to promote alternative energy.

            So what lesson does the Georgia case provide for the rest of us?  Let me suggest five:

#1: Reframe the climate change issue

            Those of us who are very concerned about climate change keep assuming that we'll persuade skeptics by painting doomsday scenarios.  Folks, it isn't working!  In fact, the "doomsday" strategy reminds me of Albert Einstein's definition of stupidity, even insanity: keep doing the same thing over and over and expecting a different outcome.  Stop talking about polar bears and sea level rise.  Instead, reframe climate change into issues that conservatives care about. 

#2: Build arguments that will appeal to conservatives

            The people in Georgia have reframed it as a matter of lower costs, elimination of monopolies, and less regulation.

            Guess what?  It's working!  So instead of painting those doomsday scenarios, focus instead on how addressing climate change actually helps do things about which conservatives care.  In the Georgia case, it's a desire for lower costs and regulation, as well as a desire to limit monopolies.

            In Georgia's case, lots of people – including lots of conservatives – are really mad that consumers have seen their utility bills go up considerably, all to pay for a behind schedule nuclear plant.  Want to get the attention of a conservative?  Bring up stuff like that!

#3: Make allies with the people you least likely expect to be interested

            Once you find something like this, start considering unusual allies.  Why not create a coalition between the Sierra Club and the Tea Party?  Now those are very strange bedfellows, but they apparently decided to come together in Georgia on alternative energy.  It's not the first time something like this has happened, and it won't be the last.

            Supporters of alternative energy, such as the Sierra Club, appealed to the desire of the Tea Party, reframing the climate change issue as a pocketbook one, as well as one focused on reduced regulation.

            Having done this, they turned attention to a key player in every state – the commission that regulates electric utilities.

#4: Focus attention on your state's utility regulators

            Even though pretty much everyone has taken high school civics, we don't know a great deal about how our Federal government works.  We know even less about our state governments in general, and still less about our state public utility commissions – the agencies that regulate electric power, cable TV, and our phones.  We all really should pay more attention, but we all know there are lots of things to which we should give attention. 

            The reason a state public utility commission is so important is that it has a lot of influence on what electric utilities do.  In Georgia's case, the public utility commission has gotten Georgia Power – the state's major electric utility – to start making lots of investments in solar.  That's the reason Georgia has moved up so much.

            In blue states such as California, getting people on the public utility commission who are sympathetic to alternative energy is fairly straightforward.  But Georgia is a deep red, conservative state, the kind you'd think would be hostile to alternative energy.

            However, if you can get the attention of the Tea Party, and get them on your side, you're likely to have more success influencing your public utility commission in places such as Georgia. 

#5: Focus on alternative energy as a "pocket book" issue

            In Georgia, that has meant reframing climate change in the ways described above – appealing to the pocket books of voters, as well as to those who want less regulation.  Given that alternative energy is now highly cost competitive – certainly more cost competitive than coal, and now even natural gas – consumers of all sorts ought to be very sympathetic – even if they love Donald Trump.  Remember, voters may love Donald Trump a lot, but they love having money in their own pockets even more!

            The experience of Georgia should be very encouraging to all of us who are very concerned about climate change.  If we will only stop preaching about "doomsday scenarios" and start reframing the issue in ways that will persuade climate change skeptics to join us.

post a comment

Legendary investor Warren Buffett sees the promise of alternative energy

            If any doubts remained about the competitive viability of solar and wind as commercial sources of energy, Warren Buffett, the legendary investor from Omaha, has put them to rest.  Buffett's Berkshire Hathaway has made major investments in electric utility power generation.  Recently, his company announced an integrated plan to build 2.7 gigawatts of wind and 1.8 gigawatts of solar.

            That certainly gives a nod of approval to these two industries, but that wasn't the truly important announcement.  Instead, Buffett said he wants his Mid America energy company to be 100% renewable by 2020 – two years from now!  The company will build no new gas, coal, or nuclear plants!  Of course, that doesn't mean that Buffett will get his companies to eliminate all carbon based energy sources by 2020, but it's an encouraging move nevertheless.

            Making such an announcement is what one might expect from truly visionary or "leading edge" investors – people such as Elon Musk of Tesla.  Warren Buffett has been incredibly successful as an investor – a true legend – but he's built his success on very traditional types of investments.  He's consistently avoided leading edge technologies.  As an example, though he became a very good friend of Bill Gates many years ago, Buffett still consistently avoided investing in information technology, claiming that he really didn't understand technology.  More recently, he's made some investments in technology companies, but long after they were known to be on the leading edge.

            That suggests two things to me.  First, it indicates that alternative energy technologies such as wind and power truly have become mainstream.  Buffett obviously sees that they are better investments than traditional energy sources such as coal and natural gas.  The Sage of Omaha is known to have Democratic leanings, but he also is well known to leave his political opinions and proclivities at the front door of Berkshire Hathaway.  When he goes to work, he's "all business".

            Second, it suggests that he sees wind and power as far better long term investments, even without the subsidies that have been common.  Many people have claimed that wind and solar are only viable because of government subsidies.  Take those subsidies and credits away and the investments become uneconomic.  Well, that was true for a long time, but it isn't true any more. 

            Buffett and his investment partner, Charlie Munger, are clearly shrewd enough to know that tax credits and subsidies can disappear with the snap of the fingers.  I find it hard to believe they would ever make an investment that depended upon the presence, or continuation, of subsidies.  Whatever subsidies and credits remain are likely to be removed, sooner or later, but the bet is that solar and wind will stay highly competitive even without such subsidies.

            If anyone really thinks that Buffett is unconventional in his investment, he also recently announced something that should disabuse anyone of the notion that he's more like Elon Musk than not.  Buffett announced that he supports the electric utility industry's opposition to "net metering".

            Where "net metering" is permitted, customers who generate their own power, typically via a rooftop solar system, will periodically produce more power than they consume during the day.  That extra power can be moved back onto the electric grid for use by others.  In effect, the customer's electric meter spins backward for a time, reducing the customer's electric bill.  The permissibility of net metering, as well as pricing of it, depends upon local rules and regulations.

            Electric utilities as a whole hate net metering.  The reason is because they perceive it will reduce their overall revenue but not reduce their costs.  After all, the utility still has to maintain the electric grid, and all of the costs associated with that.  Moreover, the utilities will lose revenue by this.  As an example, California permits net metering, and it's estimated that public schools and agencies alone in California will save $ 2.5 billion in electricity charges over the next 30 years because of net metering.  Private customers will save a lot more.

            Are Buffett and the electric utility industry right in opposing "net metering"?  In my mind, absolutely not!  Opposing "net metering" is just the latest version of monopolistic thinking by electric utilities.  Instead, net metering should be permitted, and the overall marketplace should decide the price of electricity.  I think Buffett and Munger, once they look closely, will change their minds about net metering.  Let me explain.

            It's pretty clear why electric utilities hate net metering.  After all, they want to preserve the typical monopoly they've traditionally had.  Unfortunately, as anyone who has ever taken an economics course knows, monopolies lead to monopolistic pricing and monopolistic service – meaning a lack of good service.  Frankly, a little competition should benefit all parties.

            Electric utilities say that if net metering is permitted, it will create too much uncertainty, and too many disincentives, for the utility to make the necessary investment. Not only that, they say that net metering places an unfair burden on those who don't generate their own solar power. I say, that's hogwash.  It's merely an excuse to create, or maintain, an unjustifiable monopoly.

            At the same time, the utilities that oppose net metering do have a point.  If the power generated by the rooftop solar system and sold back to the utility is simply "netted" against the customer's electric bill, then the customer has effectively sold back power at a retail price.  The retail price of power includes the cost of all of the transmission grid. 

            A more fair way to do this is to permit the rooftop solar system to sell power back to the utility but only at a wholesale price.  That price might be the same as what the utility could buy solar power from another utility or from a power wholesaler.  That wholesale price would definitely be lower than the retail price.  As an example, the wholesale price might be 2.5 cents/Kwh and the retail price might be 8.0 cents/Kwh.  Thus, the rooftop solar customer would pay the following for electricity: a) nothing for the power generated during the day and used by the customer; b) the retail price of 8.0 cents for power purchased at night from the utility; and c) the utility would credit the customer 2.5 cents/Kwh for the power that the rooftop solar system sold back to the utility.

            Using this approach should overcome the utility's objection to having to pay a retail price for power purchased from the rooftop solar system.  Now the utility may still object, saying that it makes things too complicated.  Again, I think that argument is hogwash.  Electric meters, and utility accounting systems, are sufficiently robust that one can easily make these calculations.

            The other big objection utilities have had about net metering is perceived instability it will create in the electric grid.  That used to be a problem, but recent evidence suggests the technical problems have been overcome.

            How should the wholesale price of electricity be determined?  Various data are published regularly.  The utility commission that governs rates for the electric utility can monitor this.  It will probably vary over time, but it's easily trackable.

            The opposition to net metering by electric utilities is short-sighted.  In fact, I think Warren Buffett will change his mind and embrace net metering in the future, especially if states embrace my proposal of having rooftop solar customers sell power back at wholesale rates.  The reason has to do with peak loading.

           Managing peak loads is the real problem that utilities have.  Historically, electric utilities have had to maintain standby capacity.  The standby capacity in northern climates tends to get used in the wintertime in the evenings.  In hotter climates, it tends to get used during the summertime.  Maintaining those standby units is usually very expensive.  In fact, it may be so expensive that the idea of getting excess energy generated by rooftop solar is appealing.  To the extent the utility can purchase excess power at wholesale rates from rooftop solar, it will reduce the need to maintain expensive standby peak load capacity.  Old, expensive standby plants can be shuttered.

            It makes more economic sense to get rid of as much standby capacity as possible and rely more on power generated by customers, especially if the utility can buy that power at wholesale prices.  But in a peculiar way, utilities have been dis-incentivized from doing that.  Instead, they have traditionally been rewarded for being more asset intensive rather than less asset intensive.  That's because they're provided a rate of return on the asset base.  The larger the asset base, other things being equal, the higher the price they can charge consumers.

            What public utility commissions should do instead is reward the utilities for seeking out less expensive sources of power.  There are a number of ways they can do that.  One way is to measure what I'll call the "capital efficiency of power generation".   A simple measure of this is to take the total capital investment of the utility and divide by the number of kilowatt hours produced in a given time period.  That will provide a simple metric: invested capital per kilowatt hour of power generated.  The lower that number, the more capital efficient is the company. 

            If electric rates were set with such capital efficiency in mind, electric utilities would be more likely to try to reduce their capital expenditures in order to produce a given amount of power.  Under traditional utility ratemaking, those companies have absolutely no incentive to be more capital efficient. 

            Imagine, however, if the public utility rate makers took capital efficiency into consideration when setting rates?  It would likely mean that the utilities would have less incentive to buy more assets.  The utilities might be less likely to want to own the solar assets and more likely even want to encourage purchasing power from third parties.  This would likely include rooftop solar.  Capital efficiency should also benefit shareholders.   If anything, they should be pleased if the utility can generate a given amount of kilowatts using less capital.  Utilities can in fact do this, and be more efficient at the same time, if they purchase power from the most efficient sources.  Warren Buffett and Charlie Munger are just the guys to understand such economics.

            Industrial scale solar plants are certainly likely to be more efficient than rooftop systems owned by individual consumers.  Not only that, but it is likely that the consumer will pay less for industrial scale solar power than power generated by rooftop solar.  However, if governments give electric utilities a monopoly in solar and wind power generation, it will discourage investment by others.  The utilities will win but consumers will lose. 

             Let the marketplace decide which makes better sense.  Faceless bureaucrats aren't going to make better economic decisions, and electric utilities are interested in doing things that provide their owners better results, often at the expense of the public.  At the same time, utilities should not be forced to buy power from small generators at retail rates.  Everyone can win using the approach I've outlined.

             So the interest of Warren Buffett and Charlie Munger certainly validates the premise that alternative energy is a smart business decision.  Just so long as the Sage of Omaha and his behind the scenes business partner in Los Angeles aren't "mentally captured" in old-fashioned thinking by the employees in their electric utility subsidiaries.

post a comment

The Big Bang Theory seems to suggest that the world emerged out of nothing at a particular moment in time about 13.8 billion years ago, and Darwin seems to suggest that the world emerged without purpose.


As discussed in the last post, at a minimum, the world view of a religious person, Christian or non-Christian, seems to be at odds with what Charles Darwin and the Big Bang Theory are saying.   This is because the religious believe that God, or a god-like agent, pre-existed the world, then directed the emergence of the world.  The Big Bang Theory seems to suggest that the world emerged out of nothing at a particular moment in time, and Darwin seems to suggest that the world emerged without purpose.

Since Darwin's theory was first elucidated about 150 years ago, religious people, both Christian and non-Christian, have sought ways to reconcile the different ideas.  You'll recall in an earlier blog post, I pointed out two theories – directed evolution and planned evolution – that reconcile Darwin, the Big Bang and Christianity.  A number of Christian groups, including the Roman Catholic Church and various mainline Protestant denominations, have reconciled the ideas.

Reconciliation, however, is not the same thing as a wholehearted embrace: atheists have wholeheartedly embraced Darwin and the Big Bang.  Is there a difference?  I think there is, and let me describe it by analogy.  Recall when you were a child that at least one of your parents, most likely your mother, told you to eat your vegetables because they're good for you.  You probably didn't care for them, but you knew you needed to eat them.  For me, it was Brussels Sprouts.  Today, I'm a man in late middle age (though I imagine that my adult children would say that I've definitely reached senior citizenship!), and my tastes in food are considerably broader than when I was a child … but I still HATE Brussels Sprouts!  Conversely, I absolutely love carrots and watermelon, two other fruits and vegetables.    You likely have your own version of Brussels Sprouts, carrots, and watermelon.

Darwin and the Big Bang to the atheist are like my carrots and watermelon – the atheist absolutely loves these theories, whether he or she knows anything about them.  Conversely, for the average Christian who has reconciled these theories with the Bible, it's still somewhat like my Brussels Sprouts: my "good reason" for eating them was to avoid the wrath of my mother.  But in my own mind, no one, not even my wonderful wife, even to this day, has given me a really good reason I should love them.  

But imagine a different scenario – a variation of the carrots and watermelon one I described above.  Imagine that Christians wanted to embrace Charles Darwin and the Big Bang Theory just as much, if not more than, atheists?  What would be the benefit of that?  Well, let me suggest a bunch of benefits:

 #1: Younger Christians might stop leaving the church as much as they do now, if only because one of the reasons for leaving has been mooted;    

#2: Rather than spending time arguing about "origins", Christians could use the that "bandwidth" to offer constructive comments about other matters of science, particularly scientific matters with an ethical dimension.  Hint: there are LOTS of them!   

 #3: Christians could regain the respect of non-Christians on matters of science.  The latter probably still won't adopt Christianity, but at least some important attitudes could change.

There could be real benefits to this, but it could only happen if Christians could be, in their own minds, given reasons to want to embrace Darwin and the Big Bang.  

You'll recall how I said that entrepreneurs often reframe old problems by asking new questions?  Well, that's precisely what I'm doing here.  Most everyone has some sort of entrenched position on this issue, and no one is budging.  In a case like that, the only way to make any real progress is to re-frame the problem.  Thus, for me, the starting point for addressing the BIG ISSUE – the relationship of Christians to science and technology – actually starts with coming up with a solution to the Darwin/Big Bang issue … and the only way to make real progress on that is to re-frame the entire problem by asking the following question: what would have to happen for Christians to want to "bear hug" embrace Charles Darwin's theory of evolution by natural selection , as well as Georges LeMaitre's Big Bang Theory?

The answer is actually pretty straightforward: the two theories would have to show something that somehow reinforced something else that Christians already believed.  After all, that's really the reason atheists embrace the theory – because the two theories, when taken together, appear to reinforce the idea that the world just emerged out of nothing and evolved without purpose - key parts of the world view of the typical atheist.

So the real question becomes: is there a way to think about Darwin and the Big Bang Theory that provide evidence that reinforces what the Christian Bible has been saying all along, that reinforces fundamental Christian doctrines?  If the answer is yes, then Christians ought to want to "bear hug" embrace Darwin and the Big Bang Theory, not because an atheist said to, but because the Christian Bible, and therefore God, says to do so.

Your initial reaction may be, preposterous!  I invite you to continue along with me, for I am going to take you on a journey to a place you probably thought was preposterous, but which I firmly believe is real. 

post a comment

The people who are most skeptical about climate change may well be the ones most willing to invest in alternative energy

            A fairly significant percentage of people in the USA are skeptical about climate change.  What is even more distressing, however, is that the more that climate change "believers" try to get skeptics to change their minds, the more likely the skeptics are to dig in their heels.

            The current strategy isn't working, so let's stop and try something else.  The "something else" I have in mind is to reframe the issue into a financial one: "taking carbon out of the air could be one of the next great investment opportunities."  If we re-frame the climate change problem into an investment opportunity, I think we'll get where we want to go.  There's already a bunch of evidence to show that this approach works.

            The good news is that both solar and wind farms are turning out to be excellent investments.   In fact, they could become the next great "fixed income" investment, an excellent complement to traditional fixed income investments, and an excellent overall addition to a typical investment portfolio.

            Who traditionally buys such investments?  Quite often, it's people with higher incomes and greater net worth, the very people who tend to be Republican – and Republicans tend to be the people who are most skeptical about global warming.

            I think these more well to do "climate skeptics" will love what I'll call "solar farm fixed income investments".  That's because they have the potential to provide a better return than traditional bonds for a comparable level of risk.  The same is true for wind farms, but let's focus on solar for now.

           What's the problem with good old fashioned bonds?  There are two key problems: 1) interest rates have been very low, so it's been hard to generate reasonable yield without taking on too much risk; and 2) interest rates are expected to rise over the next few years, which means that anyone already holding a particular bond will see the price of the bond decrease commensurately.

            The other thing that could make this particularly attractive is the high price of the stock market.   That's because there's been a bull market for more than eight years.  The Case-Shiller Index for the S&P 500 now stands at 32.34.  It's historical mean is 16.85 and the historical median is 16.15, suggesting that stocks are very pricey, maybe even way overpriced.  Now the record high for Case-Shiller is about 44, so there's still a way to go to get there, but it's still definitely on the very high end.  The obvious alternative is for investors to put money in fixed income investments, but traditional fixed income investments such as corporate, municipal, and Treasury bills and bonds are not especially attractive now.

          So is any of this actually happening?  A recent transaction involving Southern Power and Global Atlantic Financial is instructive.  Southern Power is a subsidiary of Southern Companies, a large electric utility in the US Southeast.  It is what is referred to as a wholesale energy provider.  Southern Power sold a 33% interest in a portfolio of 26 operating solar projects for $ 1.75 billion to Global Atlantic Financial.  Global Atlantic was founded by financial powerhouse Goldman Sachs in 2004 but spun off in 2013.  Global Atlantic provides life insurance and retirement financial products.

            So why would a company such as Global Atlantic want to buy an interest in a bunch of solar farms?  The answer is because the solar farms will provide steady, predictable cash flow to the owner for its customers.  That steady cash flow will help to fund life insurance policies and various retirement plan policies.  For companies like Global Atlantic, it will likely be an excellent alternative to the traditional investment of choice for such companies – bonds.

            Investments such as the one Global Atlantic is making could provide an excellent form of diversification to its portfolio.  That's because the portfolio of 26 solar projects will provide steady, predictable cash flow to Global Atlantic.  It's also pretty likely that the cash flow will be better than alternative investments Global Atlantic might make.  The company isn't going to ditch its other investments, just make such solar investments a part of its overall portfolio.

            The yield that Global Atlantic will likely receive on the solar investment will likely be a good deal better than on a bond.  What, then, makes the company think the cash flows will be steady and predictable?  It's because each of the solar projects in the portfolio likely has a power purchase agreement with a utility. 

            A power purchase agreement typically is a long term agreement entered into by a power provider – in this case, a solar farm – and an electric utility that will sell power to its customers.  The key to such agreements is the terms of sale.  A well-crafted power purchase plan can be very beneficial to both the electric to utility and the provider. 

            The new economics of solar create the potential for a real "win/win".  The average an electric utility can sell power for in the USA is about 12 cents/KWH.  It can generate power from a coal fired plant for about 7 cents/KWH, but solar plants are now generating as low as 2.5 cents/KWH.  Given these economics, the utility and solar generator might enter into a power purchase agreement at 5 cents/KWH.  The utility wins because it can just buy power from the generator at a price of 2 cents/KWH less than what it can either produce it on its own or buy it from another provider.  The solar generator can win because it can make power for 2.5 cents and sell it for 5 cents.

            The other benefit for the electric utility is that it can get help to cover the cost of constructing plants.  Traditionally, electric utilities have built and run their own plants.  They do that by raising capital in the form stock and bonds.  Increasingly, though, utilities buy their power from companies in the business of providing wholesale power.  That's because in many cases the wholesale provider can generate at a lower cost, and it also means that the electric utility doesn't need to make an expensive investment in a new plant.

            So what will Southern do with the $ 1.75 billion check it received from Global Atlantic?  It may distribute some in the form of dividends to the parent company's shareholders, but more likely it will use the money to invest in more solar projects.

            Expect to see more cases like the Southern Power/Global Atlantic one in the future. 

            As an alternative to a company like Global Atlantic, a new type of investor in solar power could be what's called a master limited partnership (MLP).

            MLP's have been around a long time.  The key advantage of MLP's is that the earnings are taxed like a partnership so investors avoid double taxation.  A MLP gets this benefit if it pays out at least 90% of its earnings and if it is in the business of either exploration, production, or transport of energy or real estate.   Historically, the energy generated has been oil or natural gas.  However, solar power is energy, so an MLP should certainly be able to invest in a solar facility.  It could gain the same types of benefits of ownership as a company like Global Atlantic.

            A variation on the MLP is an exchange traded fund (ETF) that is based upon MLP's.  These securities can be more attractive to the investor than the underlying MLP's themselves.  An example of this is the Alerian MLP ETF.

            So just who invests in master limited partnerships?  Generally speaking, people with high incomes, just like the customers of a company like Global Atlantic.  Now there is no reason a lower income person couldn't make an investment in a MLP, especially if it is an ETF, it just doesn't tend to happen. 

            Given the comparative unattractiveness of traditional fixed income investments, MLP's could be a good choice.  The benefits of real estate investment trusts and oil and gas MLP's are well know, so what would make solar energy really attractive?

            For the utility, the key risk is the possibility that the cost of getting power from a source other than the solar plant goes down.  That's pretty unlikely.  For the MLP, the key risk is the possibility that production costs will go up significantly.  Again, that should be fairly unlikely.

            Thus, MLP's and companies like Southern Power could provide a great source of financing for solar power generation.  That will likely be for building additional power capacity, but I think it should also make it feasible for the electric utility to consider abandoning an existing coal plant.  Now if it does that, the utility will probably take a one-time hit to earnings as it writes off the undepreciated plant.  Companies, however, do that sort of thing all the time.  It generally doesn't create a long term problem.  Investors tend to understand, especially if it means that the cost structure will get better for the company.  Conversely, the electric utility will probably score points with the public when it announces the replacement of a coal-fired plant with a solar plant.

            You may ask, why would someone who doesn't believe in climate change willingly invest in a solar plant?  It would be for the same reasons the person makes any investment: to make money or save money.  It's become increasingly clear that alternative energy is a money-making proposition.  What makes it increasingly attractive is the desire for many investors to obtain yield and the comparative unattractiveness of the stock market and other fixed income investments.

            Which again demonstrates that those of us who are most concerned about climate change should spend less time talking about it and more time focused on pointing out the attractiveness of investing in the business of removing carbon from the atmosphere.  Instead of trying to convince climate change skeptics that "climate change is killing the planet", the message should instead be, "you can make a lot of money taking carbon out of the air".  For well to do the climate change skeptics, this latter message is already getting their attention in a way the "scary future" message probably never will.


post a comment

You'll recall in an earlier post I noted that while atheist scientists have absolutely no problem embracing Charles Darwin's theory of evolution by natural selection, only about half of the US population accepts it, and only about a quarter of evangelical Christians do.


You'll recall in an earlier post I noted that while atheist scientists have absolutely no problem embracing Charles Darwin's theory of evolution by natural selection, only about half of the US population accepts it, and only about a quarter of evangelical Christians do.  These same scientists are astounded at these numbers, but it has been suggested that the only ones who should be surprised are the atheists themselves.  Why is that so?

The answer relates to "world views", more particularly, the difference in the world view of atheists as compared to Christians. It really should be no surprise that an atheist would love Charles Darwin and the Big Bang Theory, even if the atheist knows absolutely nothing about science.  This is because Darwin and the Big Bang actually provide a "creation story for atheists."  

Imagine it's 1700 and you're a freethinking skeptic, a "closet" atheist.  You probably wouldn't have announced that publicly, but let's say the word got out, at least to some of your close friends.  One of the things they would have said to you is, how do you explain the world?  Where did it come from?  What possible explanation is there other than that God, or some god-like force, created it?   Of course, in 1700 the skeptic wouldn't have had a very good answer.  Most likely, he or she would have automatically been skeptical of the skepticism.  Moreover, everyone else likely would have ridiculed the skeptic, if for no other reason than that he or she didn't have any good explanation for where the world came from, except via a creator God.

So imagine, then, what "gifts" Charles Darwin, the author of the theory of evolution by natural selection, and Father Georges LeMaitre, the Belgian priest who formulated the Big Bang Theory, have brought to your garden variety atheist?  Suddenly, the atheist has a plausible scientific explanation for how the world began and how life emerged!  Of course the atheist will embrace these ideas, even if he or she knows absolutely nothing about science.  The atheist doesn't need to know any science, merely that someone has developed a plausible explanation for how the world might have emerged without resort to god-like power.

After all, at the core of the atheist's world view is the idea that there is no God, and there never has been a God.  What we see is all the result of natural processes unrelated to a god-like agent.

What does the average religious think about this?  Well, the starting point is the religious person's worldview.  Irrespective of the details, that person's world view likely includes the following key elements:

  • God pre-existed the world
  • God created the world
  • The world does have a purpose, one created by God.

Notice how I said "religious person".  This religious person might be Christian, or he might be an adherent of any number of other religions, but the key element is that the person believes there is a transcendent God.  The person might be Christian, but for this purpose, it really doesn't matter.  At a minimum, the person will be skeptical of Darwin and the Big Bang Theory.  Now the person may decide he or she can reconcile religious beliefs with this scientific explanation, but it will require some work.  

Now let's take this a step further and add in a few additional details, especially those found in the first few chapters of the Book of Genesis.  A practicing Christian already believes that he or she can rely upon the testimony of the Bible, including Genesis. Genesis, however, seems to imply several additional key things:

  • God directed the creation of the universe over a seven day period
  • The first humans were created within the seven day window.

So now the Christian must reconcile not only the idea of a pre-existent God who directed the creation of the universe, he must deal with a clearly laid out scheme of creation that supposedly lasted seven days.  Thus, the average religious person, much less the average Christian, must do a fair amount of "reconciling", something the atheist doesn't have to do.  

If you've ever taken a psychology course, or merely read some popular psychology articles, you're probably familiar with a concept called "cognitive dissonance."  That's a fancy term for the idea that it's extremely difficult to hold two opposing ideas in your mind at the same time.  When confronted with two seemingly contradictory ideas, the average person decides that one idea may be okay, but the other idea definitely must be discarded.  Everybody does this.  Therefore, confronted with the "cognitive dissonance" of alternative #1, the world sprang forth out of nothing and life seemingly evolved to what we have today, and alternative #2, God pre-existed the world and directed its creation to what we have today – is there any surprise about what different people embrace?

  • The atheist embraces Darwin and the Big Bang
  • The religious person is at least skeptical of Darwin and the Big Bang narratives.

Thus, it should be not the least bit surprising that atheists love Darwin and the Big Bang Theory, and the religiously inclined, Christian or otherwise, are at least skeptical.

So from the outset, before one gives the first thought to science, it's likely that atheists will be highly receptive to Darwin and the Big Bang, but Christians and other religious people will have to overcome skepticism … and it actually doesn't necessarily have anything to do with the actual science, but lots to do with world view.  In our next post, let's explore this further.

post a comment

California has imposed a new solar energy mandate that, in an unexpected way, even climate change deniers could love.

            Movies in the 1910's and '20s.         

            Freeways and sushi in the 60's.

            Yoga in the 70's.

            Bottled water in the 80's.

            Smoking bans in the 90's.      

            Even martinis.

            Keep yours eyes fixed on California.  Crazy new trends always seem to start there, then soon appear elsewhere in the USA.

            You've probably heard that before, and there definitely is some truth to it.  Unquestionably, lots of trends begin in the Golden State.

            It may be about to happen again, this time with home construction.  Now it isn't that you're going to start seeing some crazy new home designs.  Of course you might, but that's not the next big thing to come out of California.  Instead, it's the idea of having all new homes built to generate solar power.

            You read that correctly.  California's Energy Commission has adopted a new set of rules requiring all new low rise new residential construction to include solar. 

            Depending upon your political persuasion, you might view that as absolutely wonderful … or absolutely terrible!  I want to suggest that even if you're a die-hard conservative who hates more government regulation, this is one you should absolutely love!  Let me explain why.

            Unquestionably, solar power has been getting cheaper and cheaper.  You've probably heard of Moore's Law, which says that the number of transistors on a computer chip doubles every 18 months.  First posited by Gordon Moore in the mid-1960's, Moore's Law continues to work to this day, a half century later, and all of us benefit in one way or another from the increase in computer horsepower.  The Iphone or Android phone in your purse or pocket wouldn't exist without Moore's Law.

            Which brings me to Swanson's Law.  Never heard of it?  Well, Swanson's Law says that since the 1970's, every time the volume of solar panels put into production doubles, the price drops 20%.  The cost of solar power has dropped by two thirds just in the past decade thanks to Swanson's Law.

            With that, more and more people are retrofitting their homes with solar installations.  Nevertheless, even though the price of solar keeps going down, solar systems remain fairly expensive to install and take a fairly long time to pay for themselves.

            California's new law will likely change all of that.  The reason has to do with what makes solar installation so expensive.  It really isn't the cost of the solar panels.  Instead, it's what is referred to as the "soft costs".  Those are things like design, permitting, and installation.  Anyone who has ever done a home remodeling job knows how expensive it can be.  Experts at the US Department of Energy estimate that in typical retro-fit installations of solar panels in a home, two thirds of the total is soft costs.

            If the solar panels and control system are installed when the home is built, much of that cost goes away.  Oh yes, the solar panels probably will cost the same, but the soft costs will be dramatically lower.

            California's Energy Commission estimates that the cost of solar power in a home where the system is included in original construction will be only 2.5 cents/kilowatt hour.  Here's how they came up with that estimate:

  • The typical residential system will produce 3,015 watts and will generate 133,630 kilowatt hours over 30 years (i.e., 4,785 KWH/year with a 0.5% annual degradation due to system aging)
  • As part of new construction, the solar system will cost $ 3,381
  • The cost/KWH over the lifetime of the system will be 2.5 cents.

That 2.5 cents/KWH may not be meaningful until you consider what the average homeowner pays for electricity.  Idaho has the lowest average cost/KWH and it is 8.0 cents.  The second highest is New York at 18.1 cents.  Hawaii is the true outlier with an average KWH of 33.2 cents!

          So even if you live in the state with the lowest average cost of electricity – Idaho – you stand to save a lot of money if your solar system is an original part of your home.

            California is on the higher end, as you might expect, with an average KWH cost of 15.2 cents.  It's estimated that the extra cost of the solar system - $ 3,381 on the cost of the new home – will increase a typical 30 year mortgage payment by $ 17/month.  That's offset by an estimated $ 80/month in electricity expense, clearly a bargain.

            Which leads me back to why everyone – even diehard conservatives – ought to love what California is proposing.  No need to discuss why liberals and progressives should love this.  After all, built in solar means that much less greenhouse gas emitted into the atmosphere.

            So why should a diehard conservative love this, especially one who doesn't even believe in global warming?

            They should love it because it creates another good way to help people save money and make money.  The new homeowner clearly can save money, so let's turn to how this mandate could be a moneymaking proposition.

            Banks should like it because it increases the size of the average mortgage, but it provides a built in means to more than pay the extra cost.  Going back to the California example, the average homeowner will pay an extra $ 17/month on the mortgage but save $ 80/month in electricity.

            What about the electric utility that supplies power?  At first glance, one would expect electric power providers to hate this.  They'll be selling less power and making less money.  Well, they'll be selling less power, but I think they actually could end up making more money.  That's because the utilities could develop new sources of revenue and also reduce their own costs.

            They could reduce their costs by buying up excess power generated by these new home installations.  The utility could offer to pay the homeowner 2.5 cents/KWH for excess power generated.  The typical cost to generate power by an electric utility around the country is substantially higher than 2.5 cents/KWH.  Thus, every KWH purchased by the utility would reduce its own costs.  That's especially true in the case of peak load demand.

            The second way the utility could benefit would be to install and rent batteries to the homeowner.  The homeowner will probably generate excess power during the day but needs power in the evening and nighttime.  Thus, some type of battery storage will be required.  The utility could purchase such batteries, install and maintain them.  They could charge the homeowner monthly rent on it.   It could easily become a profit center for the utility.

            The third possibility is for the utility to pay the cost of home solar system and rent it to the homeowner.  That would get the system into the utility's installed asset base and permit to earn a rate of return on it.  This is much the same as cable TV equipment installed in the user's home that is rented to the user.  It's estimated that the new California requirement will create additional solar capacity at $ 1.12 cents/watt of generation.  That's pretty close to the cost of building large scale solar plants.  It might even be less in certain states where the cost of construction is lower.  After all, everything in California is expensive!   So instead of building X watts of new capacity, the utility might opt to pay for the cost of new systems for the homeowner.  The utility should be able to work out pricing that cover the cost of the new system for the homeowner as well as provide a good economic return to the utility.  This approach likely won't cover all growth in electric demand, but it could have a significant impact.

            The utility will still be installing and maintaining large power production plants, but it creates the possibility of the utility thinking of its residential customers collectively as another power plant.  In this case, it would be a power plant that produces power at very low costs.  Not only that, it would be a power source that requires little or no capital investment by the utility.

            The economics of solar system installation at time of home construction appear pretty compelling.  That's true not only in California but in the entire rest of the country.  During 2017 there were 614,000 new homes sold in the USA.  If every new home included a built in solar system, pretty much everyone would benefit.  Which brings us back to Swanson's Law.  All those additional solar system sales would make the price of solar continue to decrease

            Is California's move a panacea?  Of course not!  But it presages the future.  More importantly, as I've shown above, it's something that everyone could come to embrace.  Even if you think global warming is a hoax, you'll likely pay attention if it means you can save money or make money.

            So the people who first brought you movies, martinis, and freeways may now be bringing you a way both to reduce greenhouse gases and make money.

post a comment

It's really essential to living.  In this and the next several posts, let's explore what it means to have a world view, then consider how it might apply to views about Charles Darwin.


As I said in a recent post, many atheist scientists are astounded that many Christians don't accept what appears to be very strong evidence for what Charles Darwin was saying.  Yet the only ones who should be surprised are the scientists themselves. That's because they haven't taken into consideration a difference in "world views".  So just what is a "world view"?  It's something we all have.  It's really essential to living.  In this and the next several posts, let's explore what it means to have a world view, then consider how it might apply to views about Charles Darwin.

A world view is simply a theory of the world.  For each of us, it is a "mental model" of reality, and a framework of ideas and attitudes we have about the world.  While our world views are individual, they're not as refined as our finger prints, meaning we don't really have completely unique world views.  Actually, people can be broadly categorized.

What are the factors that affect our world views?  Included are:

  • Inherited characteristics
  • Background experiences
  • Life situations
  • Values
  • Attitudes.

So each of us has certain unique things about our world views, but we can be generally divided into certain groupings.  A world view helps us to organize our thinking.

While the blog is largely focused on science and religion, let me offer an example from the political sphere.  Thomas Sowell is a prolific author and distinguished professor of political science at Stanford University.  A number of years ago he wrote a very interesting book called A Conflict of Visions.  His goal was to try to understand why certain people always seem to line up on one side, and others on the other side, of widely varying political issues.  One would have thought that there would have been much more variety.  Sowell concluded that in politics there are two broad visions, or world views – what he calls the "unconstrained view" and the "constrained view".
Those who adhere to the "unconstrained view" tend to think that humans are essentially good.  Further, they believe that human nature is changeable.  In fact, with enough effort, supporters believe that humanity is perfectible.  Those who adhere to an "unconstrained view" tend to distrust decentralized institutions.  Conversely, there are those who have a "constrained vision".

These people tend to subscribe to the following ideas:

  • Human nature is unchanging
  • Man is self interested
  • There are no ideal solutions, merely tradeoffs
  • People can't put aside their self interest in the long run.

Take a moment and ask yourself, which view is closer to your own way of thinking?
Armed with an unconstrained view, one would more likely to have the following political views:

  • With coordinated effort, just about any social problem can be tackled
  • Centralized, governmental solutions are more likely to be successful than decentralized ones
  • Educated elites have a better understanding of how to problems than do others.

In contrast, those with a constrained view are more likely to have the following political views:

  • Social problems are better solved by letting individuals pursue their own individual interests
  • There are no ideal solutions, only tradeoffs
  • Centralized government is less effective than smaller, decentralized government.

Can you guess which view is more in line with the Democratic Party and which with the Republican Party; or which viewpoint would tend to foster bigger government rather than small governement?  Pretty easy!

Can world views change?  Yes, though they tend not to do so, except over long periods of time.

As I mentioned, Sowell found that people would tend to line up on one side or another.  Let me suggest three broadly different political policy questions: 1) climate change; 2) gun control; and 3) regulation of workplace safety.  These are three dramatically different political issues, yet one would expect liberal Democrats to line up on one side and conservative Republicans on the opposite.  The reason actually doesn't have anything to do with the merits of the specific issues, rather it has to do with Sowell's broad "visions".  A liberal Democrat is more likely to line up as follows:

  • In support of collective governmental intervention to address climate change
  • In support of the same to control guns, with the objective of reducing violence
  • In support of the same, the thought being that governmental regulation will help increase workplace safety.

In each case, the real belief is that collective, centralized action will help to solve the problem.  Conversely, conservative Republicans will likely line up on the opposite of all three issues.  The conservative will very likely have a "constrained" world view, meaning he or she doesn't think that big, collective efforts work.  Instead, the conservative thinks that decentralized action is more likely to be effective.  

This, I believe, helps explain why Republicans are more likely to be skeptical about climate change.  It isn't that they deny what scientists have determined, it's more that they reject the idea that the solution to the problem is more governmental regulation and intrusion into everyone's life.  In their minds, the case hasn't been made that collective action is going to solve the problem.  So Democrats shouldn't necessarily conclude that Republicans are just "stupid" or "intransigent" about climate science, it's that it points to something deeper.

So let's now go back and focus not on how world views may affect politics, rather let's think about how world views might affect the intersection between science and religion.  In our next post, we'll talk more about Christian versus atheist world views, particularly as they might relate to science.

post a comment

Researchers at Stanford Have Developed a New Type of Battery That Could Make a Big Impact in a Few Years

            Everywhere you look you see more and more energy being generated by solar and wind.  The cost of such renewables technology continues to plummet, and renewables now are giving traditional carbon-based energy sources such as coal a real run for the money. 

            But even if solar and wind became the lowest cost sources of energy, critics point out that the wind doesn't blow all the time, and unless you're in a polar region in the summer, the sun has a habit of setting each day with darkness not far behind.   So how do you generate power when the wind doesn't blow hard and the sun is shining on the other side of the Earth?

            The traditional answer is hydropower.  Rivers with dams can be relied upon to supply a steady flow of water even in the middle of the night.  At the same time, water is often diverted into a holding pond for use as a backup.  If extra power is needed, the water in the holding reservoir is released and extra electricity is generated.

            But there are only so many dams in the world, and only so many more good sites on which to site such dams.  Not only that, but virtually every new major dam project raises huge environmental concerns.

            While hydropower may be limited, another technology is emerging as the solution: batteries.  Two battery technologies – lithium ion and molten salt – have been under development for some time. 

This past week, a potential game-changer battery technology was announced in Nature Energy.  It was developed by materials scientists at Stanford University.  The Stanford researchers have built a prototype battery using manganese.  What makes this particularly interesting is that manganese is a low cost, widely available material. 

            All batteries have a cathode (positive charge) and an anode (negative charge).  In the case of the prototype manganese battery developed at Stanford, the cathode cycles between soluble manganese and solid manganese oxide.  The anode cycles between hydrogen gas and water.  The latter cycle is already well known and well understood.

            The manganese battery works, but it's still just a prototype.  What was built in the lab at Stanford is only 3 inches tall and capable of generating a whopping 20 milliwatt hours of electricity.  To put that in perspective, that's enough to power an LED light on the end of key ring.  So it isn't much of a battery – at least not yet – but certainly very promising when one considers than manganese sulfate is a cheap, abundant industrial salt that is already used to make dry cell batteries, fertilizers, paper and another of other products.  When you're talking about a new technology, it's always somewhat reassuring when one hears the words "cheap, abundant, and familiar".

            Yi Cui, a professor of materials science at Stanford, and the lead author of the new paper, estimates that, given the water-based battery's expected lifespan, it would cost a penny to store enough electricity to power a 100 watt lightbulb for twelve hours.

           So the manganese prototype battery can power a pen light.  How much does the technology have to improve for it to be considered as a storage device on the electric grid?  The US Department of Energy recommends grid storage batteries should be capable of: 1) discharge at least 20 kilowatts of power over an hour; 2) at least 5,000 recharges ; and 3) have a useful lifespan of 10 years or more.  The Stanford battery already has more than met the second criterion, and the researchers feel confident of the third. 

            Now the challenge is to build a battery that is both powerful and cost-effective.  The Department of Energy thinks the proposed 20 kilowatt/hour battery above should cost under $ 2,000, meaning less than $ 100/kilowatt hour.  While the key material – manganese sulfate – is inexpensive and widely available, the prototype battery uses platinum as a catalyst to spur the crucial manganese/manganese oxide reaction.  The cost of platinum would make a commercial scale manganese battery uneconomic.  The Stanford researchers think they've found a catalyst that will get the cost of the battery down below the Department of Energy target.

            So just how confident are the Stanford researchers?  Well, Yi Cui, the lead researcher, is seeking a patent.  He's also formed a company to license the technology from Stanford University and commercialize it.

            Assuming the Stanford researchers can commercialize the new battery, then besides hydropower storage, there will then be three different technologies available to store electricity on the grid.

            You're likely familiar with lithium ion battery storage.  Your computer and mobile phone likely use lithium ion batteries. You also know how expensive those batteries are.

            Besides those lithium ion batteries in your computer and mobile phone, you're starting to see them as storage devices for electricity in homes and businesses.  Not only that, Tesla has begun building large scale batteries for storage.  Perhaps the most famous one is the one Tesla built within 100 days in South Australia.  We'll likely see lots more of these installations – and Tesla will likely get the cost reduced significantly over time.

            There's another battery storage technology, however, that you've probably not heard about.  That's the technology to store solar energy in molten salt, sometimes referred to as concentrated solar power (CSP)

            The technology works as follows.  A series of mirrors are laid out in concentric circles, each mirror aiming sunlight at a single tower at the center of the innermost circle.  The focused energy then heats molten salt in the tower.  The molten salt acts as a giant battery.  When the energy is needed, it is converted into electricity by a turbine.  There are several commercial installations in California and Nevada with more planned. 

            Molten salt storage could be a great solution, but it only works if you have a lot of land and a lot of capital.  It's a commercial/industrial solution of a utility, not a homeowner or small business.

            So the manganese battery technology being developed at Stanford could conceivably work in both a small scale/home setting as well as a commercial/industrial setting.  In the latter case, it could become a viable alternative to lithium ion technology in the home and small business.  In the latter case, it could scale to address industrial-sized requirements.

            If all three of these technologies can scale, the key impediment to widespread adoption of renewable energy – the problem of storage – will disappear.  People in the coal industry have been worried about new solar and wind technology.  What they should really be worried about are the people developing scalable battery technologies that will make widespread solar and wind power a realistic possibility.

post a comment

One of the other things I'm very passionate about is the eradication of polio. By getting this book, you can make an important difference in the lives of as many as twenty children and their families.

You may not realize it, but by buying my book, The Unexpected Perspective, you're helping a worldwide coalition complete the eradication of a terrible disease – polio.  The monumental task of ridding the world of this terrible disease is nearly complete, and when the job is finished it will be only the second major disease ever eradicated, the first being smallpox in 1979.

            Only 30 years ago, polio was truly a worldwide scourge.  Every year, there were about 350,000 new cases of polio reported, and polio was endemic in 125 countries around the world.  The leadership of Rotary, an organization of which I'm proud to be a part, was the first to envision the possibility and potential of a polio-free world.  For the past 30 years, a coalition that includes Rotary, the World Health Organization, the Centers for Disease Control and Prevention (CDC), and UNICEF has been fighting this terrible disease.  More recently, the Bill and Melinda Gates Foundation has joined the effort.   To learn more about this partnership, go to  Today, polio remains endemic in only 3 countries – Pakistan, Afghanistan, and Nigeria - and fewer than 30 cases have been reported worldwide in 2016 through mid-October.  While the eradication task is nearly complete, nothing short of complete eradication will keep this dreaded disease from re-emerging on a worldwide scale.

            How does a purchase of my book help this effort?  For each book sold, I'm personally contributing $ 4.00 US to the Rotary Foundation.  Each dollar that I contribute is being generously matched on a 2:1 basis by the Gates Foundation, meaning that a single book purchase will turn into a $ 12.00 contribution.  That's more than the cost of the electronic version of the book, and nearly the cost of a softcover version.  It costs sixty cents to immunize a child against polio, so each book sale means that 20 children can be immunized against the ravages of polio.

            The Global Polio Eradication Initiative hopes to record the last case of polio sometime before the end of 2017.   The World Health Organization will certify the world to be polio free once three years time elapses without a single case of polio reported worldwide.

            Once polio has been eliminated, there will be two tremendous benefits.  First, no child or adult will ever suffer the ravages of polio again.  Second, eradication will produce a "polio dividend."  Right now, the world spends more than a billion US dollars every year on fighting and preventing polio.  Once the disease is eliminated, that money can be redirected towards other diseases.  This won't be a single year phenomenon, it will re-occur every year in the future.

            Polio has been a scourge for mankind for thousands of years.  Thanks to the work of the Global Polio Eradication Initiative, as well as the governments of every country in the world, we truly are on the verge of polio eradication.

            If you would like to learn more about this incredible initiative, please visit

post a comment

Recent Scientific Research May Point the Way Towards Solving the Plastic Water Bottle Problem

            There's a good chance that sometime in the last 24 hours, you've had a drink from a plastic bottle.  If you live in the USA, there's about a 31% chance you recycled it (50% if you're in Europe). 

            Chances are, you've also heard the horror stories about where all those un-recycled bottles are ending up.  

            Absent a medical miracle, you and I will have departed this Earth within 100 years, and absent another scientific breakthrough, all of those plastic bottles will still be here, creating an even bigger environmental nightmare.  The problem has become so bad, it's reported that there are now islands of plastic garbage floating in the world's oceans.

            I'm not aware of any breakthroughs to extend human life, but a game-changing solution for plastic bottles may be just around the corner, thanks to an important discovery that was recently reported by Professor John McGeehan at the University of Portsmouth and Dr. Gregg Beckham at the US Department of Energy's National Renewal Energy Laboratory.  The researchers have found an enzyme that digests PET – polyethylene terephthalate – a plastic that was first developed, and patented, in the 1940's. 

            The average consumer will recognize it by the triangle with a number one in it.  Broadly speaking, there are seven different types of plastic.  PET represents about 8% of worldwide plastic.   It is commonly referred to as polyester, and is often found in textiles, some clothing, and some types of packaging.  Because PET has excellent water repelling properties, it's a great for packaging soft drinks and water. There's a good chance you've got it on the floor of your home or office, your clothes closet, and even in your refrigerator.

            While PET was first developed only about 70 years ago, and wasn't widely used in drinks packaging until the 1970's, evolution has already produced a bacterium that eats PET as food.  The bacterium – named Ideonella sakaiensis 201-F6 – was first discovered at a PET industrial recycling facility in Sakai, Japan.  The bacterium has developed the amazing ability to break down PET and use it to provide carbon for energy.  The reason the bacterium could do this, the researchers found, was because it contained a PET-digesting enzyme named PETase.  When you think about it, it's pretty amazing that the PETase enzyme was able to evolve so quickly to develop the capacity to convert PET plastic into energy! 

            The researchers didn't discover either the bacterium or the PETase enzyme.  That was done by other researchers at the Kyoto Institute of Technology and Keio University in Japan.

            Professors McGeehan  and Beckham built upon the research done in Japan by gaining an understanding of the structure of PETase.  They were able to determine the crystal structure of the enzyme using what's called the Long Wavelength Macromolecular Crystallography beamline at a place called Diamond Light Source.  It's the only device of its kind in the world.

            The researchers were able to get PETase to degrade commercial PET bottles.  They also found that PETase was able to degrade another plastic called PEF, a new type of plastic. The nice thing about PEF is that it is bio-based, as opposed to being a petroleum derivative, as are PET and most other plastics.  Thus it appears the PETase enzyme will be capable of degrading both traditional PET as well as bio-based PEF.

            But in the course of their research, they actually found a way to improve the capacity of PETase to gobble up PET.  The researchers acknowledged that their improvement was somewhat serendipitious, but who cares?  The end result is a more capable enzyme.

            What McGeehan and Beckham have come up with isn't really a solution, at least not yet.  That's because, as previously noted, PET represents only about 8% of all plastic.  Even if all PET can be recycled using the new process, that still leaves the other 92% of plastic still piling up around the world.

            Not only that, but there isn't yet a commercial way to put the PETase to work.  It's probably going to take some time for the researchers to come up with a way for the PETase enzyme to gobble up industrial quantities of PET bottles and other forms of PET waste.

            But think of the possibilities?  The researchers have demonstrated the capacity to improve the digesting capabilities of PETase.  They'll likely continue making improvements; and if fortune truly shines, they'll develop a Moore's Law-like improvement in the process, thus truly creating the potential to recycle huge amounts of PET, and PEF when the latter gains commercial scale.

            It could be a blessing.  But like many blessings, there are some potential downsides.  You really don't want to let plastic eating enzymes get into the wrong hands.  I can envision the next big prank: putting PETase on your friend's polyester pants or sweater.  The clothes you thought you were wearing suddenly start disappearing!  Or how about coating it on some other PET surface and watching the surface disappear?

            On the positive side, it creates the potential for an entirely new industry - large scale elimination of plastic waste.  Recycling is already a pretty big business, but commercialization of the PETase process could dramatically change the environment by providing a way to deal with the 70% of PET containers in the USA - and 50% in Europe - that don't presently get recycled.

            Once again, however, don't start celebrating quite yet.  That's because even if and when a commercially viable process is developed to get PETase to ingest huge amount of PET waste, there's still the problem of getting the un-recycled waste from the consumer to the PETase "factory".

            Someone will have to come up with a viable way to get that "other 70%" recycled, otherwise we'll still have mountains of waste.  While people profess a desire to recycle plastic waste, the actual results fall far short of an ideal solution.  So even if PETase can be commercialized, that doesn't mean the amount of plastic refuse will decrease much.  Needless to say, that requires something other than a scientific or technological breakthrough.

            Recycling has always depended upon getting people either to separate out recyclable items and/or to take them to a special location.  Some people do, and some people don't.  Even then, sometimes it's just hard to recycle. 

            So why not turn the entire model around?  Instead of asking people to take their waste to a recycling center, why not bring the recycling center to them?  The new discovery about PETase creates the potential for portable, personal PET recycling.  Why not create a consumer-sized box filled with PETase?  Just put your PET bottles in the unit and let the PETase feast on the waste? Make it easy!  Commercial and industrial sized units could also be built to handle larger quantities.  

            And then there's still the problem of the "islands of plastic" in the ocean.  Someone needs to develop a "floating factory".  That may sound crazy, but not that crazy.  After all, just as there are "factory ships" that do industrial scale fishing on the high seas, why not a ffloating recycling ship filled with PETase?  The PETase could feast upon the plastic waste, then turn the waste into energy that could be sold back on land.  If the economics work out, there's a potential new business.

            Crazy?  Maybe so.  The more important question though is, is it crazy enough?  What the scientists have come up with is certainly a promising first step, so now they need to take the next step and create both a solution to the "islands of plastic" nightmare, as well as a business of the future.  




post a comment

Buy the Book Now

Westbow Press · Amazon · Barnes & Noble

Get Carl's Updates In Your Inbox

Subscribe to our free e-mail updates and receive a free chapter from his latest book, The Unexpected Perspective.

Carl Treleaven is an entrepreneur, author, strong supporter of various non-profits, and committed Christian. He is CEO of Westlake Ventures, Inc., a company with diversified investments in printing and software.


© 2016 - 2018 Unexpected Perspective - All Rights Reserved.