Our modern world was built. Terima kasih kerana menonton. History has been determined by who finds, who controls, and who burns the dominant fuel of the age. So the past makes sense when you look at it—wearing fuel-tinted glasses. And these are not just a really great fashion accessory for this year’s Fyre Festival. They are, in fact, essential safety equipment for our leaders as they seek to shape history. In the 1970s, for example, the oil cartel OPEC, led by Saudi Arabia, sought to cut off oil supplies to the United States. caused an instant panic and a recession within months. Trump was 27 when those lines of cars snaked around the block. Putin was 21. G. was 20. Our leaders understand in their bones that power comes from fuel.
But now, we’re in the midst of the next great energy transition. So who will control the future? Of clean energy. Who will be the Saudi Arabia of this transition? Well, through fuel-tinted glasses, the answer seems obvious. It’s whoever controls the copper, the lithium, the graphite, the cobalt, the rare earths, the critical minerals that we need. Bye. Our fuel-tinted glasses are broken because this is the first transition, not to another dominant fuel. But to… a technology. And that… changes Everything. Now, I’ve spent a lot of time thinking about what this means. Our team is building one of the largest distributed renewable energy utilities for Africa. Cross Boundary Energy uses on-site solar, batteries, and wind. to bring cheaper, cleaner, and more reliable power to businesses, and cross-border access uses the same technologies.
to bring first-time power to some of the 600 million people living on this continent without it. And here is what I have learned. At the silicon face. of this transition. I’m like fuel. Technology is less extensional. It’s more circular. It’s more. Fungible, and it’s more abundant. So I can use one of our projects to explain how this works. This is Tolognaro in Madagascar. It’s a remote town of 55,000 people next to a major critical minerals mine. Power for the mind. and the community until recently. came from heavy-fuel-oil generators on the mine side. Now, cross-boundary power is the mind with a renewable energy microgrid made up of solar, wind, and batteries. We plan to phase out the generators altogether. Now…
Let me tell you a story. Imagine two cartels. One is real: OPEC, which seeks to control oil prices. The other is an imaginary alliance of the major copper and lithium miners today. Chile? China. and Australia. Now, if you want to run a good cartel, everyone knows you need to have a great job. acronym. And so let’s call it the Pisco Sour Peking Duck Fosters Cartel, or… PPF, for sure. Now, let’s imagine that each cartel, OPEC and PPF, seeks to cut off the supply of their respective commodity to the rest of the world. In Tolognaro, before … our energy transition. This would have caused an instant crisis. Without oil, the community’s lights go out, and the mine shuts down. But after… the transition.
Nothing much changes in Toledo. And that’s because, in a fuel-based world, a constant supply of fuel is existential. That in a technology-based world, without a constant supply of lithium, your old lithium batteries keep working. You don’t need a constant supply of new copper to keep your copper wires conducting electricity. You do not require a constant supply of new materials to survive. But technology gets even better than that because it is also more circular. Approximately zero percent. Some of the energy from oil can be recycled. You burn it. It’s gone. But we don’t… Burn technology. We use it. And so, over 90% of renewable energy technologies can be recycled. That wind turbine I showed you earlier is actually a refurbished unit shipped from Italy to Madagascar. And it works well.
Although it gesticulates more than our technical team initially expected. By 2050, there could be so many recycled supplies that demand for new input materials could decrease. But it gets better than that. Because technology is also more fungible. Now, I’m not actually talking about mushrooms here, but the effect is magic, because almost every input into this energy transition can be substituted for another abundant material. Copper can be replaced by aluminum. Cobalt can be replaced in batteries with iron, and those substitutions have already occurred when temporary price spikes occurred. So even without access to a specific critical mineral, the power of fungibility means that you can continue to grow. Now, hopefully, you’re beginning to feel somewhat convinced that demand for new material will be fundamentally different in this transition.
because it is less existential. Moço, é aquilo aí. more fungible. And those things together make it more flexible. It is more. And that sticks. Bye. We still have a lot of energy left to transition. So we do need a new supply. And so here is my final piece of good news. The materials that we need for this energy transition are abundant. First, we need less stuff. From now until 2050, we need to extract around 230 million tons of end-use materials each year. So … It sounds like a lot. But. Every year, we currently extract over 8 billion tons of coal. Every year, we extract five billion tons of oil and three billion tons of natural gas to fuel our existing energy system.
So that. 230 million. Looks manageable. Now, we will need more materials, such as copper, lithium, graphite, and cobalt. But this is the second point of relative abundance. We’ve got plenty of this stuff. When geologists estimate the likely resource, they show that it easily exceeds our projected demand. Even rare earths are not rare. They were called rare because they were rarely found in their pure form. They were always found with another material. So sure. They’re rare, but they’re rare in the same way that Bert is rare without Ernie. Bye. Is oil. Very different. Our identified oil resource is active relative to demand. As well. And… Identified oil reserves are similarly held by a very concentrated set of hands, as are critical minerals. So what is different?
Well, two things. One. The resource we identified for oil resulted from intensive searching for over 100 years. And we know that oil, in general, is quite rare in the Earth’s crust. Most critical minerals are actually geologically abundant in the Earth’s crust. And we’ve only begun exploring many of them at scale. So if we try, we can diversify. But second, if we’re confronted with the behavior of a PPF-style cartel, that angry kangaroo, who I think maybe was a little bit drunk. The elasticity of demand gives us the time and the leverage that we need to break the cartel. Or diversify our supply. Now, there will be short-term mismatches between supply and demand. But.
Control really matters when supply is scarce and demand is inelastic. When supply is abundant and demand is elastic, control will always be temporary. Here’s one final piece of evidence that can tie all of this together. Can you name me a successful cartel for an energy transition mineral? Have you, for instance, heard of these famous copper cartels? The Secretan Copper Syndicate, the Amalgamated Copper Company, the Copper Exporters Association, the Copper Exporters Incorporated, and the not-particularly-creatively-named International Copper Cartel? These are all real cartels, and they all … Failed. Because when supply is abundant, and demand is elastic, a cartel has the lifespan of your average Game of Thrones character. There will not be. and OPEC. for renewables. OK, fine, but won’t there be a Saudi Arabia of manufacturing in this transition?
Well, no, at least not for the same reasons, because manufacturing is effectively abundant. Your ability to manufacture does not constrain my ability to manufacture. It’s not zero-sum. Nobody can stop you from making a change—solar panels. Now, being good at building and making things creates wealth. And wealth can lead to power. But in this transition, it matters so much less what you have. And so much more. What? You do. The great nations of tomorrow will not be those that focus on controlling materials and constraining the growth of others. The great nations of tomorrow will be those that focus on their comparative advantage and identify and unlock the resources they will all need. Invent. Build and manufacture the technology that we’ll all need. and then sell it at great prices. Terrific presence.
to the rest of the world. That’s what policymakers should focus on—not annexing another source of not particularly rare earths. The leaders we need now are explorers. They are builders, not warriors. And they are innovators. not conquerors. So let’s take off, those fuel-tinted glasses together. Who will control? The future of clean energy. Well, the answer is nobody. And the answer can be… everybody, because the future of energy is not controlled. It’s shared. It’s not extracted. It’s built. and it can belong. to all of us. Thank you.
Leave a Reply