Tony Seba has a background in the information industry. He was an early employee at CISCO and then went on to working for or founding various companies in the sector. He is also teaching on the subjects of this book at Stanford university.
The book can be divided in two big parts. The first one talks about the future winners: Solar energy, electric cars, and self-driving cars.
On solar energy Seba notes massive reductions in price. He also points out that solar may be deployed at the place where you want to use the electricity. In that case, the cost of distribution is zero.
The section on electrical vehicles explains that the only thing keeping gasoline cars in business are the cost of batteries. But those are going down fast. Once that happens, no one will want to drive gasoline cars.
And the section on self-driving cars explains that having them become mainstream will reduce the number of cars necessary to provide the same service.
The second part of the book discusses various old energy options. Nuclear, oil, gas, and coal get a chapter each. Seba thinks they will be driven out of the market by solar.
Now for some comments.
Seba doesn’t mention climate change much. His point is that solar will win already in the marketplace. We can all just relax and watch solar energy wipe the floor with the competition in the next couple of years. Fossil fuels will disappear because of simple market forces before 2030.
If so, that would be nice. I like hearing this kind of optimistic point of view. And I share most of the reasons Seba gives for this optimism.
On the other hand: What should be done to accelerate this transition even more? Seba doesn’t discuss this question. Again, if we believe his book, we can all just relax and watch as the invincible solar juggernaut gets rid of all other energy sources shortly.
My answer is of course: Bring the fossil fuel companies on board. Phaseout Profit Theory.
If one believes Seba, that gives a new reason for fossil fuel companies to start lobbying for supply caps.
That’s because in his story, the fossil fuel interests all become completely wiped out. They are like Kodak and the horse carriage makers, the victims of invincible solar superiority.
If so, adopting Phaseout Profit Theory is not just a way to increase profits. It becomes a way to survive.
After solar has displaced fossil fuel as an energy source, it will still have value as raw material for the petrochemical industry. That will be the endgame, not completely worthless fossil fuel reserves.
If it is inevitable that the fossil fuel industry will lose all the energy business, they obviously should be interested in keeping their profits in the transition phase as high as possible.
And they can easily do so. Just reduce or completely stop their efforts to develop new sources for a while. Then lean back and watch the oil price go to $300.
While it may be true, as Seba says, that solar will disrupt fossil fuel in the next couple of decades, it is not yet ready to do so in the next couple of weeks or months. The transition will take some time.
Anyway, if Seba is right (I think he is), the oil companies need a plan to go from their present business model to one where they only sell oil to the chemical industry. If they adopt Phaseout Profit as a plan, they will get the maximum short term profit, with the added benefit of solving our little global warming problem as a side effect.
I understand that oil companies like profit. Especially short term profit, which is what Phaseout Profit will generate.
Here is a youtube video where Seba talks about his book: