If you are quite young, or quite old, you won’t remember the dot-com madness that swept the world in the late 1990s. For example, ever heard of a site called theGlobe.com? It was an IPO darling in 1998, setting a record for the largest gain in the first day of trading, rising 600 percent. It had a market capitalization of over $800 million, and went out of business without ever making a nickel. There were dozens just like it that died similar deaths.
What does that have to do with anything? Well, old dot-com stories are valuable because they seem impossible unless seen in person. The whole world was caught up in the madness and these things seemed rational at the time. News would break about a 15 year old kid developing a website and selling it for $10 million, and very few people concluded that the business world had lost its mind; they simply set about building their own websites.
This is a valuable parable for today, because we see the exact same phenomenon occurring with modern environmental evangelists. Exhibit A: some guy named Tony Seba, whose presentation was forwarded to me friend who was wondering if oil was soon to be doomed based on Seba’s apparently convincing presentation that EVs would soon dominate the world.
I had a look, and it brought a tear of reminiscence to my eye. Ah, the good old days, when ludicrous statements flew like confetti, and audiences smiled in rapture without a trace of reality on their faces. A typical Seba observation: “By 2030, 100% of cars will be electric and they will be 100% powered by solar and wind.
This is preposterous on many levels, but starting with the obvious: Imagine the economic dislocation of shuttering every refinery, plus every gas station, and abandoning the petroleum distribution network, within a decade and a half…and that’s just on the supply side. Imagine the infrastructure required to convert 1.2 billion automobiles to electricity world wide. Imagine all that happening in 13 years.
Any technology fan who grew up in the 60s, 70s, or 80s probably at some point read Popular Science magazine, and followed a similar nerd-arc: being dazzled as 13 year olds by articles pronouncing that “we’ll all be in flying cars in 30 years”, to sarcastic 20 year olds who mocked the hopelessly unrealistic technological forecasts, and finally to 40 year olds who simply ignore the entire field.
Seba and his ilk seem to be trapped at the juvenile end of this development scale, remaining starry-eyed at the theoretical greatness of it all in a way usually only reserved for the ignorance of youth. The fascinating part though is that the general media flow is now as mesmerized by these projections as they were by the notion that useless new websites were worth billions immediately after their birth. En masse, the sheer force of the herd convinced us that these phantasmagorical leaps were not only possible but probable.
And we’re going there again, and it is a critical distinction we need to avoid falling for. The possible only becomes the probable once major factors are apparent and understood, not when forecasts are wild speculation built on wild speculation. We are being convinced by these waves of trance-inducing visions that the entire global economic order will be turned on its head in a decade and a half. The dot-com age presents an interesting comparison; similar romantic visions of the day actually did have a glimmer of credibility because the developments were all virtual. There really was nothing to stop anyone from building a world beating website. But the current epidemic involves ripping up and rebuilding the world’s energy infrastructure in the same time frame it takes to build a big bridge.
It’s just such sheer lunacy that it defies description. It is beyond belief to think that the world could switch infrastructures that quickly, especially since battery technology has hardly changed and remains the key to widespread usage of wind and solar.
It helps that promoter/salesmen like Seba (he is, fundamentally, just peddling a book, which I refuse to hyperlink) sidestep facts whenever needed, or just make stuff up. Seba’s keynote presentation (on his wildly self-promoting website) salutes Tesla for providing an “Infinite Mile Warranty” on its Model S. That claim is in fact only an 8-year unlimited mile warranty on the battery pack, not the whole car, as Seba unhelpfully implies. The rest of his talk is fanciful nonsense that theoretically could come true but so could a vast number of other highly improbably events.
I’m not being all cranky and melodramatic without cause. Judge for yourself from this quote from a journalist attending an electric vehicle conference in Los Angeles this past November. Pasquale Romano, president of EV charging company ChargePoint, was quoted by auto writer David Booth thusly: “So dramatic, in fact, will be this drop-off in the purchase of new fossil-fuelled vehicles, says Romano, that as early as 2020 or so, consumers will start having trouble finding gasoline to fill up their parched gas tanks.”
This isn’t new. The concept was tackled in 1841 in a legendary book entitled “Extraordinary Popular Delusions and the Madness of Crowds” which is about pretty much what the title sounds like. It’s human nature to be captivated by the new and theoretically possible when it’s exciting and has a wide-open future. It’s not dissimilar from a child with a lemonade stand envisioning a haul of hundreds of dollars.
So the phenomenon will likely never go away either. And that’s ok, because it is what it is and there’s no point trying to change such a basic human tendency. It also can be a great thing when it inspires people to every greater heights because they don’t feel boundaries or constrained.
On the other hand, if you are in an industry that would be vaporized should these speculations come true, it’s important to keep things in perspective and not feel too frightened by the bombast. Remember that these spokesmen are salesmen looking to make a buck or cement their future somehow. They can say anything they want, and do, in order to get attention. If they are wrong, they won’t be sued, or even remembered. In the meantime the sensationalism might sell them a few books.
Terry Etam is a contributor for the BOE Report – The Source for oil & gas news and information