Note: This video was recorded over the summer during one of Peter’s hikes.
Lithium has played an important role in the green transition and remains a crucial resource for the future of electricity; however, it’s not going to be all sunshine and rainbows for lithium…
While lithium is the primary option for electric vehicle batteries, its low energy density and safety concerns leave much to be desired. Unfortunately for us, lithium is pretty much the only option at this point. There remain some much-needed breakthroughs in the battery chemistry space, but even if those happened tomorrow – reaching mass production would take at least a decade.
The lithium supply chain is no clean sheet either. Chile and Australia are the top producers, but between nationalization efforts in Chile and a slower extraction method used in Australia – disruptions are pretty standard. The bottlenecks don’t end there. Processing capacity is concentrated in China, and with collapse right around the corner, get ready for a whole new slew of problems.
If I controlled the flow of investments into this sector, I wouldn’t be dumping billions of dollars on lithium production. Instead, I would allocate funds to the physical science research to develop a better battery chemistry. Diversifying our battery technologies is the only way to make the green transition stick without hindering global progress toward sustainable energy solutions.
If we put all of our eggs into the lithium basket…We’ll have a long road ahead of us.
Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:
First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.
Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.
And then there’s you.
Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.
Today’s video comes to you from the peak of Mount Evans.
Is the superconductor of every Green’s dreams finally here? I hate to burst your bubble, but the LK-99 is just too good to be true.
Despite their claims, these ‘new’ studies on LK-99 have largely been dismissed by the scientific community due to inconsistencies in the methodologies used. In reality, we haven’t gotten any closer to the superconductors we’ll need for the green transition to stick.
One of the big problems with green energy comes down to transmission. Once your solar panels or wind turbines generate all this power, you still need to get it to the people who will use it. If you can’t do that, then what’s the point?
While this might not be the answer to our superconductor needs, at least this topic will get some new eyes on it and much-needed attention. And who knows, maybe it will even kickstart policy reform…
Prefer to read the transcript of the video?Click here
Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:
First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.
Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.
And then there’s you.
Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.
Hey everybody. Peter Zeihan here coming to you from the peak of Mount Evans. Behind me is Mount Bear Start and Square Top. And behind that, Geneva and Silver and Decatur and treasurer and all the others. Today we’re in talk about something a lot of you have written in about, and that is the 99 superconductor information that has recently been leaked onto Twitter and Reddit.
The idea of a superconductor is it doesn’t lose any of its throughput regardless of distance. And if you can do that over long distances, you can transfer power from anywhere to anywhere relatively easily and cheaply. That’s the idea anyway. The short version for Elk 99 is that it’s probably nothing. The reports in question date back over 15 years, and the only thing that’s new is that they were leaked and they were put online and a number of institutions within Korea, because that’s where the first tests were done.
I’ve already come out and saying that at best they’re flawed, but none of them have ever been replicated, including by the team that did the original report. So there’s probably nothing here. It’s just that it’s getting a little bit of fresh air all of a sudden. Now, if you want to bet on semiconductors, I welcome you to to it.
It’s one of the materials science breakthroughs that we really need if we’re going to make the green transition stick. One of the problems we have with the green transition is that you can generate a lot of solar in the southwest and a lot of wind power in the Great Plains, but that’s not where most of the American population lives.
And even in the United States, where people only, only live, a couple thousand miles away from those zones, that’s much better than you’ve got in, say, Europe, where you’d have to basically go to the great Eurasian steppe for wind and into the Sahara for solar. So if you can solve the semiconductor and the transmission problem, great. There’s also another issue in the United States, because it’s hard to transmit power.
And, you know, very, very, very, very loose rule of thumb. If you transport power about 500 miles, it costs almost as much to do that transmission because of the loss as it does to generate the power in the first place. So you’re generally not going to send electricity very far. What that means is in the United States, most electrical concerns, all the utilities are local.
So each town or each county has their own. There are very few large utilities in the United States. And if you want to make solar and wind work at scale, you either need larger and larger and larger entities, or you need the ability to transfer power across jurisdictional lines, especially state and grid boundaries. Superconductors would, in theory, allow us to do that technically, but we still need the legal structure to do it.
Now you can do high voltage lines, which will double, triple, maybe even quadruple the distance. You can send power in an economically viable manner. But until you can cross those boundaries, it doesn’t really matter. So what we need now, even before we get superconductors, is a multiple acts of Congress to break down the legal jurisdictions to allow power to be sent long distances.
And as soon as Congress does that, a number of states will sue. Because right now this has been a local and a state legal prerogative. So we need a significant legal overhaul before we can really do the green transition, even if we did have superconductors. So I’d say start now and get the laws changed. And then hopefully we can have that physical science breakthrough that is necessary to do this at scale and over distance.
The economics of green energy are vastly different from traditional fossil fuels, and we must understand their differences if the transition to green energy will ever be successful.
When building a traditional power plant, most of the costs come from the fuel used to manufacture the plant, which can be paid over time by the fuel you sell. Most of the expenses for green energy plants come from the plant’s initial construction, which requires lots of capital on the front end.
There are two complications with the transition to green energy. First, the cost of capital is rising and will continue for the next 10+ years, making those upfront costs even heftier. Second, energy costs are traditionally inelastic. So as the system is converted to green energy, the cost of components will have to be factored in.
The bottom line is not that we shouldn’t go green; instead, we should only put these plants where the technology matches the geography. Putting solar where it’s sunny and wind where it’s windy. Once we can figure that out, we’ll just need some help from the tech space and Congress to help with the transmission side of things.
Prefer to read the transcript of the video?Click here
Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:
First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.
Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.
And then there’s you.
Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.
Hey, everybody. Peter Zeihan here. Coming to you from the hike and bike trail in downtown Austin. Today I wanted to talk a little bit about energy economics, specifically green energy economics.
Now, the idea that once you’ve paid for the sunk cost of the solar or the wind system, that you’re in the clear. You know, to a degree that’s true. But you first have to get the thing built. There’s two complications here that we’re facing. The first is capital. So when you’re going to build like a normal thermal power plant, about three quarters, 60%, three quarters of the cost of that plant is actually in the fuel that you are going to burn over the lifespan of the project. You don’t have to finance that upfront. You pay for that as you go. And you typically use the income that you get from selling your electricity to your customers to pay for that. So the only part that you have to finance is that initial construction, which is typically a quarter to a third of the total.
With GreenTech, that’s not how it goes. With green tech, roughly 80% of the cost of the project over the life span is in construction. And even if you can get into a situation where you’re in a sufficiently sunny or windy place that the per cost for the kilowatt hour or the power you generate is or over the lifespan of the project, the same as it is for a fossil fuel system. You still have to finance that all upfront. And with the baby boomers moving into mass retirement and liquidating all over their holdings because they can’t take a shock of a currency crash or a market crash anymore, the cost of capital in the United States is going up, and it will remain high until such time as the Millennials are the capital rich group in our population. That won’t happen until most of them are in their fifties, and that won’t happen for another 10 to 12 years. So we’ve got this period of much higher capital costs, which means much higher development costs for electricity projects in the green space. There’s really no way around that.
The second problem has to do with the elasticity of energy costs. So let’s say you need a gallon of gasoline in order to drive to work. If you can only get 9/10 of a gallon, it’s not like you park your car and walk the rest of the way and just leave your car for all time and up. You will pay whatever you have to pay to get that last 10th. And that price then applies to the entire market. And if you have a shift in demand of only like 10 to 15%, you can easily see a change in price of 50 to 100%. And we know this is true for electricity, for coal, for natural gas, for oil, and even for nuclear fuel. Now, if we decide we are really going to go with the green transition in mass, then all of a sudden a lot of the components that go into electricity generation are going to become power fuels. That’s chromium, that’s copper, that’s aluminum, that’s fiberglass, that’s graphite, that’s lithium. We have not priced in that the system.
The bottom line of all this is not don’t go green. The bottom line of this is you only put these technologies in places where the geography matches the capacity for these things to work. So you put up solar where it’s sunny, you put up wind power where it’s windy and if you’re going to put it somewhere else. Not only do you have to think of the cost over the long term in an entirely different light, you’ve got to change the metrics because it’s going to cost more to build and is going to cost more to finance. And that means we ultimately need better technologies than what we have now, especially in transmission, so that we can bring the electricity from where it’s produced in a reasonable manner to where most people actually live. And that requires, among other things, multiple acts of Congress, both to appropriate the money for that research and to make it easier for power to pass through different states, jurisdictions, and especially between the three power grids that the United States shares.
Alright. That’s it for me. Talk to you guys later.
As the US attempts to reshore many previously outsourced industries, the Chinese are looking for any opportunity to retain their competitive edge…so let’s talk about solar panels.
China isn’t known for its grand technology or innovation, but through a mix of labor, security and scale, they have emerged as the dominant manufacturer of solar panels.
China’s not letting go of the reins anytime soon. So what will happen next…Industrial espionage? Technology theft? One way or another, the US is bringing solar home.
Prefer to read the transcript of the video?Click here
February is here and that means the Webinar is only 17 days away!
Join me on Feb. 17th for the webinar – Global Outlook: One Year into the Ukraine War. We’ll dive into the global impacts the war has had on supply chains, agriculture, and much more. After my presentation we’ll have a Q&A portion to answer all those burning questions.
Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:
First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.
Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.
And then there’s you.
Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.
Hey Everybody. Peter Zeihan here coming at you from fairly windy and noisy Miami. I hope the sound on this one’s okay. The news that you can use this week is that the Chinese government is considering putting export bans on certain types of solar panel manufacturing, specifically the ability to make the wafers and silicon ingots that go into certain types of solar panels.
Some people are saying that this is a retaliation to things that the United States has done recently with semiconductors. But I don’t think there’s a direct link here. A couple of things. First of all, when you think of technology and you think of China, those two words only go together in the word manufacturing. The Chinese do not have a history and really any industry or subsector of being the innovators. They’ve got the manufacturing plant because it used a mix of labor and security and scale in order to become the dominant player in a lot of sectors…solar panels are one of those. But they don’t do much innovation at all. In fact, we were kind of racking our brains over this in the offices when what items out there were the Chinese the pioneers at, that they hold the technological edge, and there’s still a demand for it outside in the rest of the world. There is really nothing.
What’s going on here is that the Chinese have discovered that the United States is starting to build on an industrial policy and lots of other countries in the world are going with it. And once you marry state power to the efficiencies that you get from the American workforce and capital markets and market size, well, the Chinese just aren’t nearly as important in that sort of world.
So in those rare places where they do have a technical edge, they would like to keep it. This brings us to the solar panels. The Chinese dominated this space years ago and drove out most of the competition completely and then were left as the only ones in the space. Something like 80% of the global total and the assembly of solar panels requires a lot of fingers and eyes, something the Chinese dominate because of the size of the labor force. And that means they have made certain technological advances. The one that they’re talking about at the moment, the most important one by far, is that the Chinese and only the Chinese can make the wafers for the PV panels larger and thinner than anyone else. It’s an edge they would like to keep. But with the United States now mandating that a certain percentage or rising percentage of solar panels have to be manufactured in the United States. This technology is going to move there, whether it’s the U.S. having to develop it or not. So the question comes down to what kind of time frame are we talking about?
If the Americans started from a naked start, this would probably be a 5 to 8 year process, which for the Biden administration is just not fast enough. And so that brings us to the question of espionage. Now, the Americans, as a rule, are not great at industrial espionage, and it’s because our economy is too large and the government tends to be too hands off. So let’s say, for example, that the CIA did have the capacity to steal the plans for the next transmission that the Germans were able to put together. Who do you give it to? Ford? Chevy? Doesn’t work that way here because we would have to choose sides on everything. Our economy is too big. There just aren’t a lot of sectors where we only have one significant firm. But that’s not the case in most other systems where you have national champions, in part because of technology theft.
The three countries that would be most likely to go after this are three countries that after China are the biggest thieves of technology in the world, and that would be France, South Korea and Israel. And of those three, the South Koreans are definitely the ones to watch because they now have a fairly robust history of building industrial plants within the United States in order to meet whatever requirements the US government demands. So I can absolutely see a future where either the Biden administration breaks with longstanding policy and actually gets intelligence professionals involved in technology transfer against the wishes of the home country.
Or more likely, the South Koreans have already stolen stuff and they’re already negotiating with the Biden administration on how to build stuff on our side of the border in order to get the Koreans concessions and other economic sectors, which is something they would dearly love anyway.
One way or another, this is going to happen. The Biden administration has already put out the money. The demand is there. Solar panels are getting more efficient every year. They’re making more sense and more parts of the country. But most of all, most importantly, the political will for the general population to play hardball with the Chinese is there.
So all the pieces are in place and Chinese leadership in this sector, its days are numbered. And even if that proves to be false, if the Chinese refuse to export the tech to the United States, then the United States will have no choice but to build the stuff itself. One way or another solar panels are coming home.
There’s a few reasons people love manufacturing in Texas – it’s cheap, it follows American law and low tax rates.
Electronics manufacturing is something that Americans haven’t worried about in decades…they could just outsource it to East Asian countries. Now that these countries are facing headwinds in their economic systems, Americans will either have to make it themselves or kiss those shiny toys goodbye.
This reshoring effort will require somewhere in the ballpark of 2 million jobs. Not too bad right? Oh wait, they’ll also need to send some of that labor-intensive stuff to their southerly neighbor. So find somewhere with excess employment capacity, large populations, solid infrastructure, a workforce with diverse skill-sets…and in close proximity to Mexico.
That’s no small feat, but there are a few locations that meet the long list of criteria. Can you guess what city tops the list?
Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:
First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.
Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.
And then there’s you.
Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.
