Energy and Ingenuity 

Ingenuism Weekly 26

“Knowledge has to be improved, challenged, and increased constantly, or it vanishes.” –Peter Drucker


Energy Abundance Now - Silicon Valley Examined 15

On the Silicon Valley Examined podcast, Robert Hendershott and Don Watkins discuss Matt Yglesias's article "The Case for More Energy," the vital importance of dramatically expanding the availability of low-cost energy, and how an understanding of Ingenuist principles can help.

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Energy and Ingenuity 

Robert Hendershott and Don Watkins 

Energy production and consumption has been dominated by a scarcity mindset since the 1970s energy crises. In response, interest in conservation jumped and per capita energy use in the US has steadily drifted lower. 

Is that something to celebrate?

If people used less computing power because chips became more expensive, we wouldn’t celebrate “computer conservation.” We would see that for what it is: regress.

What we want, ultimately, is not conservation but abundance.

Abundance enables exploration and discovery. Mechanizing agriculture to allow a tiny fraction of people to produce so much food that obesity is a bigger problem than malnutrition freed up humanity’s ingenuity to spawn a series of revolutions—industrial, information, and biotech—that have created miracles. None of which are possible if people have to spend all day every day acquiring the calories to survive. 

The value of abundance is especially profound when it comes to energy, since energy is the technology that powers every other technology. Yet, the way we currently think about energy is holding us back from energy abundance in two important ways.

First, our ingenuity is targeted at incremental efficiency to allow humanity to make do with less. Efficiency is great when it allows us to cost-effectively do more with less. But obsessing over efficiency makes no sense. Incremental efficiency suffers from diminishing returns while innovation has the potential for increasing returns (exponential growth). 

Focusing on efficiency is like deciding to deal with food shortages by slowing human metabolism and food consumption. No – GROW MORE FOOD. (That actually happened: when doomsayers warned of global starvation during the 1960s and 70s, we didn’t stop eating—the green revolution created unimaginable food abundance.) 

Second, insisting on energy efficiency can actually hold progress back. New technology often starts very energy inefficient and then improves over time. New ideas that are immediately dismissed for being energy inefficient miss the opportunity to evolve into something more tenable. Ingenuity transformed mobile phones from large bricks that held less than 30 minutes of charge to small, sleek devices that we trust to hold and manage our entire lives. Ingenuity transformed cars, making them safer, more reliable, and more efficient. Efficiency follows invention.

We need to switch to an abundance mindset. Innovation in energy production is long-term far more impactful than investment in conservation. Once you’ve picked the low hanging fruits of conservation, you end up with programs that focus on getting people to turn off their air conditioning during peak-use hours. How is that progress?

Ingenuity will produce the greatest benefits when applied to greater energy production. The shale revolution already radically increased the availability of low-cost oil and gas in the places that allow it. Low-cost nuclear energy would change the world (and the experience of places like South Korea suggests this low-cost nuclear is far from a fantasy). Yes, there are fears about safety, but a society that flies over ten million metal giant metal tubes filled with people through the air each year with zero crashes given the chance can figure safety out. Geothermal energy leveraging the advanced drilling technologies developed in the shale oil boom also has the long-term potential to produce reliable, inexpensive baseline power virtually everywhere on the planet. 

The goal of energy abundance should unite humanity. Whatever one thinks about fossil fuels or climate, anyone who values human flourishing should value innovation to increase energy abundance and see it spread around our connected world (particularly to the billions of people mired in poverty with little to no energy).

Matt Yglesias’ recent article deftly points out how massively expanded energy abundance would allow us to do things that are otherwise wildly uneconomical. Matt focuses on desalinizing to eliminate drought, carbon capture from the atmosphere, and hydrogen production. 

But even more important, Matt’s ideas are just the tip of the iceberg! We literally have no idea what might be possible in a world where energy is dramatically cheaper. What we do know is that when human ingenuity meets abundance, miracles happen. 


Why science is boring

Matt Clancy asks the question: is science too conservative?

It might seem obvious that we want bold new ideas in science. But in fact, really novel work poses a tradeoff. While novel ideas might sometimes be much better than the status quo, they might usually be much worse. Moreover, it is hard to assess the quality of novel ideas because they’re so, well, novel. Existing knowledge is not as applicable to sizing them up. For those reasons, it might be better to actually discourage novel ideas, and to instead encourage slow and incremental expansion of the knowledge frontier. Or maybe not.

For better or worse, the scientific community has settled on a set of norms that appear to encourage safe and creeping science, rather than risky and leaping science.

One difference between science and business is that novel business ideas have a high profit potential, and so gatekeepers (mainly investors and potential employees) can be willing to take big risks even when it’s difficult to judge the viability of a novel idea. The upside is simply higher than the downside.

But in science, there is rarely that kind of asymmetric reward for getting behind novel but hard to assess ideas.

Another reason why experiments like Tyler Cowen and Patrick Collison’s Fast Grants are so vital. Science needs to innovate a solution to the problem of scientific complacency.

Our remote work future

CEO Chris Heard sums up the benefits and hazards of the trend toward increasing remote work over on Twitter. A few highlights.

Access talent: The first reason they are going remote-first is simple – it lets them hire more talented people. Rather than hiring the best person in a 30-mile radius of the office, they can hire the best person in the world for every role.

Remote burnout: The productivity inside the companies we’ve spoken to has gone through the roof. Their biggest concern is that workers burnout because they are working too hard. They are actively exploring ways to combat this.

~90% of the workforces we’ve spoken to never want to be in an office again full-time.

Remote fear: most companies aren’t scared about the quality of work that will be produced. They are scared about intangible things they can’t measure ‘quality of communication’ && ‘collaboration in person’ && ‘water cooler chat’. Many have realized these were excuses.

This raises the question: why didn’t this happen earlier? And the basic answer seems to be: because of inertia.

But that raises a far more interesting question: where else are we being held back from huge upside gains through inertia?

Disrupting the suburbs

Speaking of inertia, Noah Smith looks at the coming changes in suburbia—and why those changes are necessary.

[T]he suburban model we created was fundamentally unsustainable. The upkeep on the vast sprawl of roads and other infrastructure was hellishly expensive, especially given the country’s excessive construction costs. New knowledge industries created clustering economies that made density more important for productivity, even as social media and a decline in crime made urban life more enjoyable. And the housing crash of 2007-8 showed that the model of sprawling ever farther outward from city centers had come to its limits — from now on, new Americans must mostly be put into existing urban spaces, which means density. These pressures have created both a rental crisis for renters and an affordability crisis for first-time homebuyers.

Things are starting to change. But what will the future of suburbia look like? Smith has a bunch of interesting guesses. Here’s his take on housing:

The newer, denser suburbs will have roughly the same layout, but single-family housing will be replaced with a mix of housing. New state-level housing bills like SB9 and SB10 are mandating legalization of things like accessory dwelling units (ADUs) and duplexes. But near transit hubs, they’re legalizing even more dense forms of housing, like apartment complexes. And some cities will choose to allow more density than the state governments mandate. Thus, the new suburban landscape will generally include:

  • single-family homes

  • single-family homes with ADUs

  • duplexes, triplexes, and fourplexes

  • row-houses

  • low-rise apartment buildings

How will this change shopping? Transportation? Noah has further thoughts at the link.

Robot trains!

The Wall Street Journal makes the case that well before autonomous cars revolutionize transportation, we’ll see the rise of autonomous trains.

Trains might seem like a mature technology with little room for improvement or expansion, since adding new rail lines is prohibitively expensive, as battles over the cost of the expansion of Amtrak service have shown. But researchers who study the matter say that making them fully autonomous could improve their safety and also significantly increase the amount of freight that can be carried on America’s rail network, by making more efficient use of it.

The transition won’t be easy, however.

Making autonomous trains that run on shared, open rail networks is much harder than accomplishing the same thing on closed metro rail systems, says Jean-François Beaudoin, president of digital and integrated systems at French locomotive manufacturer Alstom. Doing so requires that these trains be given “eyes and ears,” as he calls them—sensors that can look ahead on the track for unexpected obstacles.

The complexity of the U.S. rail network, where many lines are shared between multiple private rail companies, means automating our system could be daunting—a process that “could take decades,” says Dr. Dulebenets. 

“Decades” seems a bit pessimistic, at least if the problem were purely technological. But my read is that the real challenge is to be found in our complacency.

Until we demand rapid progress in every area of life, we aren’t likely to see rapid progress.


The Drop Out: Elizabeth Holmes on Trial and Bad Blood: The Final Chapter podcasts

It’s interesting to think about: why did Theranos fail? On one level, the answer is obvious: because it was (allegedly) a fraud! But on another level, it wasn’t like Bernie Madoff’s fraud. It’s clear that Elizabeth Holmes wanted it to succeed and a lot of smart people were trying to make it succeed.

Why couldn’t they?

It could be that the problem they were trying to solve was just too hard. If Holmes hadn’t resorted to false claims about the company’s success, maybe Theranos would have gone out of business earlier, unable to raise funds.

But it’s worth looking at other factors that might have been relevant. For example, instead of promoting internal connection at Theranos, reports indicate it was incredibly siloed.

Or it could have been that Holmes wasn’t the right person to lead the company given her lack of a medical background. But many successful companies have been led by founders who weren’t themselves technical experts. Andrew Carnegie reportedly claimed he didn’t know much about steel but was expert at finding and leading the people who did.

The most intriguing point I’ve heard anyone make came on a recent episode of The Drop Out podcast, where Venture Capitalist Roger McNamee explained why he chose not to invest in the company early on.

Theranos claimed that they had leaped from drawing numerous vials of blood for testing to a couple small drops. McNamee didn’t have a strong background in medicine, but his take was: innovation doesn’t work that way. You rarely make a giant leap all in one go. You would have expected to see incremental progress and learning from failure. Sometimes major innovative leaps can happen, but you would want really strong evidence before thinking someone had made that kind of a breakthrough straight out of the gate.

The more you understand what innovation looks like, the better you can assess when you’re seeing an innovation—and when you’re seeing…something else.

Until next time,
Don Watkins

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