Friday, December 31, 2010

16 Predictions for 2011

Looking Forward, Looking Backward

The Tarot | The Tower
It's that time when people make predictions for the coming year.

This is my first try at making a formal list of prognostications, which I plan to revisit a year hence when I make my second list.

Many are about cleantech and renewable energy, or about things that will affect the future of them.

I hope I'm wrong about many of these.

Without further preamble:

  1. Federal energy policy will go nowhere, the casualty along with most government activity of vicious, party-first partisanship. Gridlock and no compromise will be the norm. Forget a carbon tax, or cap-and-trade. We can expect instead only a weakening of support for cleantech. A national Renewable Portfolio Standard (RPS) is possible, but will only pass if it pre-empts state RPS with a weaker standard. Such an RPS will more likely be recast as (something like) an Energy Independence and Security Portfolio Standard and add natural gas, nuclear, and so-called clean coal on a par with true renewables, with the effect of fatally weakening development of truly renewable energy technologies.
  2. More scientists and scientific organizations will recognize the need to more vigorously and publicly defend science against evidence-free and methodologically vacuous attacks by political demagogues. Nonetheless, facts, science and reason will be trumped by ideology and slick messaging in areas from climate change to ethanol, with the result that we will continue to act policies not because they are effective at solving the stated problems, but rather because powerful interests like them, often for other reasons. We will be able to boast, if that's the right word, that we were present at the end of the Enlightenment.
  3. Politicians of both parties will embrace natural gas as the solution to our energy problems. Over strenuous objections from a broad array of others, foreign oil giant Shell and the rest of the oil giants will grab control of enough limited water in the west to commence oil shale production. Environmental concerns will be pooh-poohed, with actual effects to be discovered only years later. The EPA will abandon its already timid steps to understand and regulate exactly how these companies will operate their shale "plays", what chemical stew they intend to inject into the ground, and what aquifer or groundwater effects they cause. No one will talk much about BP's little adventure in the Gulf of Mexico. Despite talk of our bountiful supply of natural gas, prices will rise.
  4. Environmental concerns will be sacrificed on the altar of supposed economic necessity. As joblessness persists, any regulation, restriction or reservation that impedes any business activity will succumb to withering attack over how it will supposedly cost jobs. Business as usual (BAU) will rule and corporations will be given free reign on fossil fuel projects of every kind. With the acquiescence of the Obama Administration, the Congress will neuter the EPA on offshore drilling, shale development, and carbon regulation. EPA Administrator Lisa Jackson will resign.
  5. Small-scale, decentralized and distributed energy generation technologies will continue to gain traction, especially in the developing world and amongst those looking for energy security, predictable cost, and energy independence. Makers of small wind devices, turnkey solar systems and companies like Hydrovolts will see market gains.
  6. The small bubble in companies that assist homeowners and business with energy efficiency initiatives will start to deflate as that market saturates with too many me-too companies chasing an increasingly over-served demand. What happens when all the homes have had their insulation updated?
  7. Consumers will continue to care little about green, at least as measured by their spending habits. Companies will continue to pursue sustainability strategies anyway because the triple bottom line has become BAU and saves companies money. No one notices a company's sustainability unless it does something outrageous.
  8. Demand for natural resources of many kinds will create imbalances leading to greater price volatility, spot shortages and growing contention amongst companies and governments to secure supply chains. In 2011 this will be most apparent with rare earth elements, water, and possibly copper. Tensions this year presage the military conflicts over resources that will erupt by 2015.
  9. Venture investment will continue to shrink in both size and importance, as fewer firms concentrate on an ever-smaller set of faddish economic sectors, leaving the bulk of innovation ignored and starved for funding. Private investment from angels and super-angels picks up some of the slack, but it increasingly looks and behaves like slimmed-down version of the VC of yesteryear. Strategic investment by corporations will grow substantially, focused heavily on supply chain but secondarily on very early stage highly disruptive and higher-risk innovation.
  10. Unemployment will remain high as corporations continue efficiency efforts. With fewer jobs, there will continue to be more entrepreneurs. Many people point to innovation as the solution to our economic woes, but much of that innovation will be at a very local, even personal scale as the growing legion of downwardly-mobile Americans are forced to get very creative to make ends meet. Not all of this innovation will be legal or ethical, but much will focus on a new ways of extracting marginal value from formerly discarded things. There will be a widespread grass-roots resurgence in reuse, repurposing and recycling activities which will create a few fast-growing and very interesting startup companies. Waste-to-energy and bioenergy will grow at all scales.
  11. Entrepreneurial activity in Africa grows even as violent conflicts continue. The exponential growth of cell phones leads to rapid growth of distributed renewable energy generation, and both lead to more information and greater local-scale economic activity. In the further future, if it can prevent colonial resource exploitation by China and others, Africa's economic might grows significantly for the first time.
  12. China will continue its economic ascendancy, as it relentlessly focuses on executing strategies of resource acquisition, currency manipulation, and mercantilist intellectual property treatment. Its intransigence, even belligerence, with countries such as Japan, and the increasingly imperialist character of its policies will stoke tensions within international institutions and trigger demonstrations in some countries that will start to take an overtly racist tone. Meanwhile, more cleantech companies will choose to do business in China and mostly allow some measure of Chinese ownership in order to globally compete.
  13. Politicians, regulators and corporations continue to talk about transparency, but, especially in the shoot-the-messenger aftermath of Wikileaks, secrecy grows, whistle-blowers are punished, and transparency diminishes. Unpleasant details of how corporations increasingly control our government become more revolting and dismaying, but less frequently revealed, honestly examined, or redressed. One effect is to cement more power with already wealthy interests entrenched energy incumbents at the expense of the smaller cleantech players.
  14. Oil will rise to over $120/BBL, and gasoline to over $4/gallon. Neither will ever be as low again as they are now, however neither will rise so fast or in as sustained a way as would galvanize unstoppable momentum towards actively ending the Age of Oil, even if some of the industry players must game the market to do so.
  15. Waste-to-energy and bioenergy will grow at all scales in both the public and private sector.
  16. People will continue to talk about the importance of the smart grid, but without any government direction, support and vigorous funding, still no one will agree on what the smart grid is. Various implementations of something called a smart grid will happen, but substantial uncertainty and the lack of large-scale interoperability will retard any significant progress. Meanwhile, there will be a cyber-attack in an attempt (likely successful) to destroy a facility somewhere in the world. Likely targets: Nuclear facilities in Iran or France, an oil terminal in the Persian Gulf, or a utility in the US.
Overall, I expect the coming year to be much like this year just completing, but more so. Trends that started to show will become more pronounced. If you think things are getting better you will be pleased to find that they continue to do so. If you see dark storm clouds on the horizon, you will be correct in expecting the sky to get yet darker. We have entered an age of winner takes all.

Good luck. The race goes to the swift.

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