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The Hydrogen Economy: The Creation of the Worldwide Energy Web and the Redistribution of Power on Earthby Jeremy Rifkin
Throughout history, human beings have occasionally found themselves caught between two very different ways of perceiving reality. Certainly that was the case in the closing days of the
17th century. The Enlightenment scientists and philosophers-Isaac Newton, John Locke, René Descartes, and others-challenged many of the most revered shibboleths of church catechism, including one of its central doctrines, that the Earth is God's creation and imbued with intrinsic value. The new thinkers preferred a more materialist explanation for existence and cast their lot with mathematics and reason. Less than a century later, political renegades in the American colonies and insurrectionists in France overthrew monarchical rule in favor of a republic form of government and proclaimed man's "inalienable right to life, liberty, happiness and property."
James Watt patented his steam engine on the eve of the American Revolution, consummating a relationship between coal and the new Promethean spirit of the age, and humanity made its first tentative steps into an industrial way of life that would, over the next two centuries, forever change the world.
Today, we live in similar times of great tumult, of failing orthodoxies and radical new possibilities. After two centuries of industrial production and commerce, the use of mass human labor yoked to fossil-fuel-powered machines in factories, offices, and commercial businesses is slowly falling by the wayside. New, more sophisticated and "intelligent" technologies are steadily replacing human labor in every industry and professional field. We are making a great transition to smaller, elite workforces collaborating with increasingly smart computer and robotic technologies. Within a matter of a few decades, the cheapest workers in the world will not be as cheap as the intelligent technologies that will replace them, from the factory floor to the front office. By the middle decades of the 21st century, we will likely be able to produce goods and services for everyone on Earth with only a small fraction of the human workforce we now employ. This will force us to rethink what human beings will do when they are no longer needed to labor in the marketplace.1
Physics and chemistry, which have dominated the era just passing, influencing every aspect of our existence, including the smallest particulars of our way of life, are making room for the age of biology. The mapping and manipulation of human, animal, and plant genomes open the door to a new era in which life itself becomes the ultimate manipulable commodity. The biotech era is beginning to raise fundamental questions about the nature of human nature, and the public is quickly being swept up in a great debate between those who view the new age as a biological renaissance and others who warn of the coming of a commercial eugenics civilization.2
The computer and the telecommunications revolution have given birth to the Internet and the World Wide Web, marking a great change in the way human beings communicate. "Access" has become the all-encompassing metaphor for a generation of people who can now connect with one another via an electronically mediated "central nervous system" that spans the globe. The new "speed of light" society is changing the way we conduct business. The market economy, steeped in the exchange of goods and services between sellers and buyers, is found to be far too slow to accommodate the new speed of commercial life. In the coming era, the exchange of property in markets steadily gives way to access to services and experiences in networks. In a society where time itself is the most scarce and valuable resource, suppliers retain ownership of property and users pay for the time they spend accessing goods and services. Subscriptions, leases, time-shares, licenses, and rentals become the preferred way of doing business. The new "temporal" economy is characterized by falling transaction costs and diminishing profit margins, forcing commercial enterprises to introduce a radical new business model based on "shared savings" arrangements among network partners. The transformations from property exchanges to access relationships and from profit margins to shared savings are beginning to restructure commercial life around the world.
Our notions of what constitutes culture is also radically changing. Giant content companies like Disney, Universal Vivendi, AOL-Time Warner, and Sony are mining cultural resources all over the world, transforming them into paid-for experiences of every kind. The high-end income earners-the top 20 percent of the world's consumers-now spend almost as much money on experiences as on basic goods and services. A younger generation of cultural activists who oppose the new commerce are waging an escalating battle against "branding," lifestyle marketing, and new kinds of retail franchising and entertainments, all of which they believe are leading to the homogenization of culture. They argue that the new global cultural commerce is a threat to the world's cultural diversity, and they seek protection of indigenous cultures. The commercial sphere's effort to subsume the cultural sphere and become the sole arbiter of the human story represents a great turning point in the relationship between commerce and culture with profound long-term consequences for every society.3 The transformation in the nature of work, the emerging biotech and communications revolutions, the growing temporalization of economic activity, and the global struggle between commerce and culture are fundamentally altering both the conception and reality of the world around us.
Now, an equally profound change is about to occur in the way we use energy. The modern age was made possible by the harnessing of coal, oil, and natural gas. All of the advances of the past two centuries, whether they be commercial, political, or social in nature, are connected, in some way, to the massive power surge unleashed by the burning of fossil fuels.
Anthropologists say that the amount of energy consumed per capita in a society is a good measure of its relative state of advance. Western society, over the last 200 years, has consumed more energy per capita than all other societies throughout all of recorded history put together. We have come to enjoy an unprecedented standard of living, and we owe our good fortune to fossil-fuel deposits formed millions of years ago. Manna, yes! But, not from heaven, but rather from deep beneath the Earth.
Alas, all good fortunes eventually come to an end. For a long time, we naively believed that, if the supply wasn't unlimited, there was at least enough oil stored away in the nooks and crannies of the Earth to supply all of our needs far into the foreseeable future. When oil production in the United States peaked in 1970-the point at which half of all the recoverable reserves had been produced-geologists became uneasy. But, as long as oil continued to flow from other parts of the world, the average American did not give the matter a passing thought. It wasn't until the Arab oil embargo, three years later, that Americans and consumers in other countries took notice. Waiting in line at filling stations for hours at a time in hope of securing a few gallons of gasoline was a sobering experience for millions of people. At the time, some critics warned that we would soon run out of oil. But it didn't happen.
The United States, and other nations, as well as leading energy companies, began a frantic search for new sources of oil, and they found them. The lines at the gas pump dwindled and the oil crisis abated. The gasoline flowed and it was cheaper than ever. The world got back to business as usual.
At present, oil is relatively cheap on the world markets. Our experts tell us that while oil-and natural gas-will eventually begin to run out, that time is at least thirty to forty years away, maybe even longer-plenty of time to plan for alternative sources of energy.
But what if you were suddenly told that everything is not exactly as it seems on the oil front? Imagine waking up very soon to a headline in the newspaper: global oil production peaks; prices expected to rise dramatically on world markets in coming years.
A growing number of the world's leading geologists are beginning to say just that. This time, they warn, there really is an oil crisis looming on the horizon, and when it hits it will be permanent. So where are we headed in the next few years?
If global oil production were to peak some time in the next decade or so, followed shortly thereafter by a global peak in natural-gas production, it could set off a cascade of events that could unravel much of our industrial way of life. Two developments, in particular, are likely to figure prominently in the coming oil equation. First, while the experts disagree about when global oil production is likely to peak, they agree that when it does, virtually all of the remaining untapped reserves will be left in the Muslim countries of the Middle East, potentially changing the current power balance in the world. The juxtaposition of dwindling oil reserves and growing militancy among many of the world's younger Muslim population could threaten the economic and political stability of every nation on Earth. Political leaders and policy analysts are particularly worried about the escalating conflict between the Israelis and the Palestinians and the possibility that, in the future, Islamic fundamentalists might pressure their governments to use oil as a weapon against the United States and other Western nations for supporting the Israelis.
Second, if global oil and natural-gas production peak, catching the world unprepared, countries and energy companies are likely to look to the dirtier fossil fuels-coal, heavy oil, and tar sand-as substitutes. With Earth's temperature already projected to rise by 2.52 to 10.44ºF between now and the 22nd century, the switch to dirtier fuels would mean an increase in CO2 emissions, a greater temperature rise than is now being forecast, and even more devastating effects on the Earth's biosphere than have already been envisioned.4
Ours is not the first great civilization in history to face an energy crisis. Energy has played an important role in the rise and fall of civilizations. Many anthropologists and historians would argue that it has most often been the critical factor. If there are lessons to be learned-and there are-about how other civilizations have come to grips with their own energy crises, now would be the time to take stock, argue the Cassandras. The fact is, there are ironclad rules that govern the flow of energy, and if those rules are breached, civilizations can perish. The laws of thermodynamics tell us what, in the final analysis, the upper limits are in the pursuit of human power over the environment. Societies that reach beyond the constraints imposed by their own energy regimes risk breakdown.
The United States, and every other country, is vulnerable to mounting internal and external threats and disruptions as we move into the last stages of the oil era. Our vulnerability is even more pronounced because of the highly centralized, hierarchical energy infrastructure, and the accompanying economic infrastructure, that we created to manage a fossil-fuel energy regime. The fossil-fuel era is characterized by a top-down organizational scheme made necessary by the difficulty of harnessing and exploiting hard-to-find forms of energy. The extraordinary costs associated with the processing of coal, oil, and natural gas required vast amounts of investment capital and led to the formation of giant energy enterprises. Currently, ten to twelve mega-companies, both commercial and state-owned, dictate the terms by which energy flows through the whole world. By centralizing power over the Earth's energy resources, the energy companies created the conditions that rewarded economies of scale, and centralization of economic activity, in every other industry.
The burning of fossil fuels also quickened commercial life. Managing the increased density and flow of human commerce further solidified the formation of highly centralized, hierarchical commercial enterprises. Today, fewer than 500 global companies control most of the economic activity of the planet. Globalization represents the end stage of the fossil-fuel era-a period in which fewer and fewer corporate institutions micro-manage both the flow of energy and economic activity in communities throughout the world.
Globalization is the defining dynamic of our time. Proponents look to it as the next great economic advance for humanity and as a way to improve the lives of people everywhere. Its critics view it as the ultimate example of corporate dominance over the affairs of society and as a means to deepen the gap between the haves and have-nots. Transnational corporations, with the help of the G-7 nations, are lobbying to change government regulations and statutes that, they argue, restrict freedom of trade. Anti-globalists are taking to the streets in greater numbers to protest what they contend is the systematic gutting of environmental and labor standards designed to protect the Earth's ecological and human communities from corporate rapacity. The tragic events of September 11th, and its aftermath, have exacerbated the tensions surrounding globalization and have made everyone feel more vulnerable in what is becoming an increasingly unsafe and unsure world.
Despite the growing dissension and polarization, little serious effort has been made to analyze the critical underlying factors that have led to globalization and the acrimonious reactions to it. While globalization can be understood from a number of different perspectives, none is more important than the energy equation. We sometimes forget that without fossil fuels globalization would have been impossible. Fossil-fuel energy has allowed commercial enterprises to radically compress time and shorten distances, making possible a single world market for the exploitation of raw resources and human labor and for the marketing of finished products and services.
It is no wonder that controlling fossil-fuel energy reserves has been the central preoccupation of governments and industry for more than a century. Geopolitics has been, to a great extent, synonymous with the politics of oil for five generations. Those countries, companies, and peoples that have successfully controlled the flow of oil have enjoyed unparalleled wealth, while those who have been denied favored access to the wealth-generating potential of what geologists call "black gold" have slipped further into poverty and have been the subject of increasing exploitation and marginalization.
Consider, for example, the rise in oil prices in the 1970s and '80s, which was a major cause of the escalating debt crisis in Third World countries. Unable to afford the high price of oil on world markets, developing nations were forced to secure billions of dollars in commercial and institutional loans to pay for more expensive oil imports and the increasing costs of all the other activities associated with higher oil bills. The debt burden has worsened in recent years as developing countries have become even more dependent on foreign oil to modernize their manufacturing economies and meet the needs of growing urban populations. Many of the world's poorest countries are now spending more money to pay back past loans than they are spending on basic human services. The result is an irreversible downward cycle of ever-deepening poverty and despair. Protesters at recent global-development forums have zeroed in on the Third World debt crisis as the most visible sign of the inequities created by globalization and are demanding a cancellation of debts owed by poor countries. The fossil-fuel energy regime, then, is both the vital force that makes globalization possible and one of the factors most responsible for the growing divide between the rich and poor nations of the world.
Now, however, the global infrastructure created to exploit fossil fuels and manage industrial activity is aging and beginning to crack at the seams. The fissures are everywhere, and there is mounting concern that the infrastructure might not hold together much longer. Some geologists are beginning to suggest that the system itself could collapse. To be unprepared for what might come, say the worriers, would be foolhardy.
But what does "prepared" really mean? If the fossil-fuel era is passing, what can replace it? A new energy regime lies before us whose nature and character are as different from that of fossil fuels as the latter was different from the wood-burning energy that proceeded it.
Hydrogen is the lightest and most ubiquitous element found in the universe. When harnessed as a form of energy, it becomes "the forever fuel."5 It never runs out, and, because it contains not a single carbon atom, it emits no carbon dioxide. Hydrogen is found everywhere on Earth, in water, fossil fuels, and all living things. Yet, it rarely exists free-floating in nature. Instead, it has to be extracted from natural sources.
The foundation is already being laid for the hydrogen economy. In the next few years, the computer-and-telecommunications revolution is going to fuse with the new hydrogen-energy revolution, making for a powerful mix that could fundamentally reconfigure human relationships in the 21st and 22nd centuries. Since hydrogen is found everywhere and is inexhaustible if properly harnessed, every human being on Earth could be "empowered," making hydrogen energy the first truly democratic energy regime in history.
Hydrogen-powered fuel cells are being commercially produced for installation in factories, offices, commercial buildings, and homes to produce power, light, and heat. The major automakers have spent more than $2 billion developing hydrogen-fuel-cell-powered cars, buses, and trucks, and they expect to mass-produce the new generation of vehicles before the end of the current decade. Locating micro-power plants on-site with the end user-so-called "distributed generation"-threatens the long-standing dominion enjoyed by centralized power plants that grew up with the fossil-fuel era. Now, the end user becomes his or her own producer as well as consumer of energy. When millions of small power plants are connected into vast energy webs, using the same architectural design principles and smart technologies that made possible the World Wide Web, people can share energy and sell it to one another-peer-to-peer energy sharing-and break the hold of giant energy and power companies forever.
The worldwide hydrogen energy web (HEW) will be the next great technological, commercial, and social revolution in history. It will follow on the heels of the development of the worldwide communications web in the 1990s and, like the former, will bring with it a new culture of engagement. While the HEW is potentially a revolution in energy design that could decentralize and democratize energy and recast commercial and social institutions along radically new lines, there is no guarantee that, in fact, it will. Here, the history of the Internet and the World Wide Web is instructional. The Internet contains the promise of empowering billions of people, giving everyone on Earth potential access to everyone else and making communication and exchange of information between people truly democratic. The "Net" activists of the 1990s argued that information ought to be freely shared. While community nets and free-nets were established early to make good on that vision, they were too few, too weak, and too devoid of meaningful content to withstand a better-financed, more highly organized campaign waged by companies like AOL and Microsoft to gain control over the new medium. Commercial forces have conspired, from the very beginning, to gain an unbreakable hold over the portals of cyberspace so that they could become the gatekeepers and arbiters of the Information Age. A similar threat and challenge face the hydrogen energy web.
Whether hydrogen becomes "the people's energy" depends, to a large extent, on how it is harnessed in the early stages of development. Like the Net activists of the last decade, a new generation of energy activists is beginning to argue that hydrogen energy ought to be shared. Making that happen will require that public institutions and nonprofit organizations-especially the publicly owned utilities that provide energy to hundreds of millions of people and the thousands of nonprofit cooperatives with a collective worldwide membership that exceeds 750 million people-jump in at the beginning of the new energy revolution and help establish distributed-generation associations (DGAs) in every country.
Connecting the whole of humanity into hydrogen energy webs is going to require the active participation of the private sector as well. Commercial enterprises will develop and manufacture the new hardware and software of the distributed-generation revolution and will play a big role in bundling energy services and coordinating the flow of energy on the hydrogen energy web. Creating the appropriate partnership between commercial and non-commercial interests will be critical to establishing the legitimacy, effectiveness, and long-term viability of the new energy regime.
The switch to a hydrogen economy can end the world's reliance on imported oil and can help diffuse the dangerous geopolitical game being played out between Muslim militants (in the Middle East and elsewhere) and Western powers. Equally important, weaning the world away from a fossil-fuel energy regime will limit CO2 emissions to only twice their preindustrial levels and mitigate the effects of global warming on the Earth's already beleaguered biosphere.
A decentralized, hydrogen-energy regime offers the hope, at least, of connecting the unconnected and empowering the powerless. When that happens, we could entertain the very real possibility of "reglobalization," this time from the bottom up, and with everyone participating in the process.
The fossil-fuel era brought with it new ways of organizing society, including industrial enterprise, nation-state governance, dense urban settlement, and a bourgeois lifestyle. Because it is so different from the various forms of hydrocarbon energy, hydrogen will give rise to a wholly new type of energy infrastructure as well as to radically different economic institutions and new patterns of human settlement, just as coal and the steam engine and, later, oil and the internal combustion engine did in the past. When every human being on Earth can be the producer of his or her own energy, the very nature of commercial life radically changes. Economic activity becomes far more widely diffused. The disaggregation of commerce, in turn, allows for a disaggregation of human settlement. The centralization of power and economies of scale that so characterized the fossil-fuel era inevitably led to a concentration of human population in mega-cities that used up vast amounts of energy and were ultimately unsustainable. The creation of decentralized hydrogen energy webs connecting end users would make possible the establishment of human settlements that are more widely dispersed and more sustainable in relationship to local and regional environmental resources.
The worldwide hydrogen energy web, like the worldwide communications web, will allow us to connect every human being on the planet with every other in an indivisible and interdependent economic and social matrix. The human species can now become a human community fully integrated into the Earth's ecosystems. Unfortunately, our ideas about personal and collective security are still mired in a fossil-fuel state of mind. In the oil age, each human being's sense of personal security came to mirror the organizational values of the larger institutional framework that managed the flow of energy and economic activity. Autonomy and mobility became the undisputed social virtues of the era, in both personal and institutional life. In the coming hydrogen economy, the sheer density of human interaction, as well as the speed of engagement, will give rise to a new sense of security, bound up in embeddedness in multiple commercial, social, and environmental networks and in global interdependence. Our individual security and the well-being of the Earth's diverse human, biological, and geological communities will become seamless. We will come to see ourselves as part of a single Earth organism. The divisive geopolitics that so permeated the fossil-fuel era will give way to a new sense of biosphere politics in a hydrogen age.
We find ourselves on the cusp of a new epoch in history, where every possibility is still an option. Hydrogen, the very stuff of the stars and our own sun, is now being seized by human ingenuity and harnessed for human ends. Charting the right course at the very beginning of the journey is essential if we are to make the great promise of a hydrogen age a viable reality for our children and a worthy legacy for the generations that will come after us.
--from The Hydrogen Economy by Jeremy Rifkin, Copyright © 2002, J.P. Tarcher, a member of Penguin Putnam, Inc., used by permission
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