Does natural resource wealth imply technological stagnation?

Peter Thiel tells us:

Look at the Forbes list of the 92 people who are worth ten billion dollars or more in 2012. Where do they make money? 11 of them made it in technology, and all 11 were in computers. You’ve heard of all of them: It’s Bill Gates, it’s Larry Ellison, Jeff Bezos, Mark Zuckerberg, on and on. There are 25 people who made it in mining natural resources. You probably haven’t heard their names. And these are basically cases of technological failure, because commodities are inelastic goods, and farmers make a fortune when there’s a famine. People will pay way more for food if there’s not enough. 25 people in the last 40 years made their fortunes because of the lack of innovation; 11 people made them because of innovation.

I also liked this bit:

One of the smartest investors in the world is considered to be Warren Buffett. His single biggest investment is in the railroad industry, which I think is a bet against technological progress, both in transportation and energy. Most of what gets transported on railroads is coal, and Buffett is essentially betting that after the 21st century, we’ll look more like the 19th rather than the 20th century. We’ll go back to rail, and back to coal; we’re going to run out of oil, and clean-tech is going to fail.

This very useful post collates and presents all of Peter’s evidence for his view that modern technology has been stagnating.  It is both “interesting throughout” and “self-recommending.”  It is from this blog by Dan Wang.

I very much liked Peter’s new book, Zero to One: Notes on Start-Ups, or How to Build the Future.


I like Peter Thiel, but I can't ignore a glaring inconsistency: one significant reason for growth in mining is precisely the growth in IT. You can't build integrated circuits etc. from household trash.

Thanks for the narrow minded commentary Marian. Thinking outside the box immigration is an alternative to mining. If you line up the immigrants in the correct way you can use them as circuit elements. More research should be done on which two nationalities need to be placed in parallel for a capacitor.

D+. Lazy and unoriginal.

See me.

Troll - Woot, I passed!

You can’t build integrated circuits etc. from household trash?

Why not? Don't the obsolete devices being thrown out use the same elements?

I thought of it too. Given the growth curve of IT all over the world, I would say that it is not possible to cover the demand from trash yet. The world market is far from balanced state.

Companies recycle their bad components for this reason. But the way this industry works is that each part is worth $1 or $2 and you sell 100's of millions. That's how you make money.

And the industry is always moving to cheaper materials. But sometimes it's better to use the more expensive one. The engineering decision is not, "how do we keep some guy from getting super rich". It's, "what is the best way to build this product with the pricing we see in the market today". It's easy for the price of a rare material to be high enough to make somebody rich while still being low enough to be worth designing in.

"You can’t build integrated circuits etc. from household trash? Why not? Don’t the obsolete devices being thrown out use the same elements?"

The economic cost of acquiring it from the trash would certainly exceed the value of the components. It's probable than in many cases, the actual energy cost of acquiring it from the trash would exceed the energy cost of the same product new.

Does mining natural resources include oil and gas? Cracking and horizontal drilling, etc. strike me as innovation. Are these 25 people Arab princes who got their money because they owned the land on which conventional drilling could take place? (Not exactly technical innovation...) Or are they owners and investors in wildcat drillers, etc. (which have prospered in recent years due to technical innovation.)

Just eyeballed the list. The sizable majority are indeed Russian, Arab or Latin. So it would seem that most of the great natural resource fortunes are built on extraction, not tech.

Forbes doesn't count royals on their billionaires list. If they did there would be even more Arab names.

I do not think they are new. They are expensive technologies that were not cost efficient when oil was cheap. North American shale, costs about $65 per barrel to extract.

Isn't that like saying Al Gore invented the Internet? The process of horizontal drilling is a serious technological advancement. It invokes big data and substantial computing resources all along the process from planning to execution, as well as well educated engineers to run the various facets of the operation.

In the early 90's the various luminaries in British Columbia figured that instead of cutting trees a high tech economy should be encouraged. Some wag said rather uncooperatively that 40% of the high tech spending was done by the forestry industry.

His logic is bollocks. He has just assumed that the mining industry undergoes no technological advances. 2/10: see me after the class.

Not at all. I think he's saying that productivity in the mining industry has not kept up with the speed of overall technological improvement of the decades prior to 1980. Otherwise, the real price of oil and gas would be much, much lower. In contrast, mining innovation has simply kept us more or less running in the same spot, not making *dramatic* progress. It's a bit like saying that although we have seen innovations in cars and planes, the final products don't seem *that* different or that much cheaper than those in the 1970s.

If you are on a treadmill that is accelerating, staying in the same place requires big progress in your running speed. If we are way better at extracting stuff, that counts as progress, since it means we can keep going when the easy-to-extract stuff has gone.

"farmers make a fortune when there's a famine."

Surely, this misstates what is going on. Commodities aren't in demand because of shrinking supply, which implies some kind of failure or stagnation.

They're popular because 1) we're finding more uses for metals (tech) and foodstuffs (energy, industry); and 2) and more people use them in places like China as progress, innovation and the rest are driving prosperity.

And oil and food prices wouldn't be so high if their markets weren't so distorted by govt regulations and subsidies.

How regulated is Apple and Google compared with Exxon and Monsanto?

Thiel is one of those people that's excellent at synthesizing a bunch of disparate facts into a bigger picture, but he tends to grossly over exaggerate the certainty associated with individual pieces of information? Buffet investing in railroads as a bet against progress? C'mon, Buffets a value investor, if he's buying something it's because he's getting a cheap price on the fundamentals. Thiels projecting the mindset of a Valley VC, whose portfolio only consists of things he thinks are going to disrupt the future.

By far the most devastating critique from the link: "We have 100 times as many scientists as we did in 1920. If there’s less rapid progress now than in 1920 then the productivity per scientist is perhaps less than 1% of what it was in 1920"

Can that possibly be true? Or is this some very loose definition of scientist, like medical lab techs or something? If it is true, that's incredible. Either we have waaayyy too many people in academia for the intellectual work that needs to be done, or the process of scientific research has become ridiculously inefficient.

Or all the low-hanging fruit has been picked in science?

Sure, that's another possibility. But if so it implies an incredible ramp up in the complexity of the scientific frontier. If the fruit gets any higher hanging at anything like that rate, it implies that soon nearly all scientific progress will grind to a halt. Are we going to 100X the number of scientists by 2120? I don't think there's nearly that many people who even qualify.

I think it is a mixture of "low-hanging fruit has been picked in science" and a much broader role for scientists than 100 years ago

Academia also forces a lot of useless effort.

"much broader role for scientists than 100 years ago"

Probably something to the effect of "you now need a STEM degree to qualify for this job that a normal person would have been hired for in 1920"

They're all social scientists...

Yeah, the argument there is really weak. Trains have always been the best way to ship things around. Trucks are only used because they don't have to pay for the damage they do to the roads. Buffet also buys things he understands.

adding more engineers to a project makes the project take longer. Might be true for science too.

LOL, only once you reach a certain optimum. There are plenty of projects where adding engineering hours reduces the over all time and costs.

I have a sincere question and I promise I am not trolling or trying to stir the pot. My question is, as a casual reader of this blog I notice many times Tyler will make or link to articles that seem rather clearly to contain falsehoods. Now obviously Tyler is an Economics professer at a well thought of School of Economics and seems like a sharp individual. Does he throw these things out knowing they are wrong to generate comments and thought out discussions? On the occasions that this blog talks about things I know well( airlines and Dubai for example), he consistantly presents mistaken points or half-truths about subjects I have a high degree of knowledge in.
Again I am not trying to stir the pot. I am just curious.

Tyler's brain doesn't operate like a normal person, who mostly classifies propositions as true or false. Relative to baseline Tyler holds an enormous number of (often contradictory) ideas at 5-50% probability. In fact if you ranked people by what's the most absurd idea they hold at .1 p, he'd probably come out near top.

So I think he links to a lot of stuff that a normal person would see as falsehoods, but that TC thinks might possibly be true on some outside chance. For the former you'd just ignore it and not bring it up, but for the latter you throw it out there and see if the blogosphere comes back with any additional supporting evidence.

Like what?

And not you, but I could make a full time job of correcting the things experts think they know. Trust me, I'm as shocked at this as anyone. It must have to do with what Doug is talking about plus we are experts in way narrower subsets than we think we are but other people can't tell.

Really bad example: read the "eye witness" accounts of Ferguson. "And the cop is just pulling Big Mike in through the car window for no reason and Big Mike is just trying to get away and the cop just keeps trying to pull him in through the window!" All we know for sure is this"expert" is wrong.

Better example: Thiel is assuming his conclusion as Bufdett's rationale, assuming they didn't talk.

then the comments section would be the place to put the facts straight

Mr Cowen doesn't have views or opinions, he has priors.

Sounds like a Chuck Norris joke...

People are more confident of their opinion than is warranted. Some facts we 'know' are True are not True, or at least not always True. Some facts we 'know' to be False are not False.

Tyler knows this, keeps a broad mind and links to a lot of varying opinions.

"That atoms and the vacuum were the beginning of the universe; and that everything else existed only in opinion...The chief good is cheerfulness, which is not the same as pleasure, as some people have misunderstood; cheerfulness is a condition according to which the soul lives calmly and steadily, being disturbed by no fear, or superstition, or other passion. This state is called euthymia, and euestô, and several other names. Everything which is made I look upon as depending for its existence on opinion; but atoms and the vacuum I believe exist by nature."

Real estate: they're not making any more of it! Almost all of the demand growth comes from countries such as China abandoning central planning. If the Soviet Union were still chugging along and 1 billion Chinese peasants still hard at work growing rice and cabbage, commodities would still be very cheap. The global economy would also be contracting.

The issue today is psychological.The developed world isn't asking how to grow, it is asking how to do more with less. Politicians focus on the gap between group A and B, greens want to cut energy production. Growth in America is solved crudely by importing more bodies; they have no other solution. The West is more matriarchal, not patriarchal, and the result is stagnation.

Thiel is correct. Sure there is still some progress in mineral extraction/farming etc. The point is that the progress has not been enough in recent years to match increasing demand. In contrast, demand for computing power increases rapidly every year, and yet the price per unit (e.g. cents per gigaFLOP) falls.

In mineral extraction we're finding new ways of getting resources (horizontal drilling, fracking, etc.) but they cost more per unit than the old ways. They're profitable only so long as the price remains high. Hence the profit margins are much higher for the lazy rentiers--people who happen to have easily accessed resources--than the innovators.

The argument is that the lack of innovation/progress in commodities is proof that we are stagnating.

Yet commodities are in huge demand precisely because there is so much innovation and progress.

Commod prices are high because of demand, not sluggish supply. We are producing more than ever, largely due to innovation that is, yes, slower than in digital but still innovation.

This is not really Thiel's total argument. You can't just isolate the commodities part. His argument could also be stated as, other than computers and commodities, where are the flying car billionaires, the biotech billionaires, etc.

I think he partly is riffing on the Simon-Ehrlich idea. Non-stagnation would look a lot like lower commodity profits. Just stating such a theory does not prove it, but neither does stating the alternate theory.

So who uses those gigaflops of computing power? Yesterday a system went online at one of my customers. The rollout over a very large geographic area required remote training facilities as well as the hardware software implementation. Quite impressive. To what end? To sell groceries, a backend process to keep track of all the services required to run a store building.

As for primary resources, you should take some time to enjoy the middle class land of opportunity that exists in Alberta. The demand for fuel increases and it is meet by a combination of a resource and huge capital investments, technological advances and application of skilled labor. Do you know what the choke point is for the resource industry? Housing and transportation for the workers. Transportation of the product. Getting people qualified to do the work.

Every enlightened person in North America wants it shut down.

Coal carloads are falling, whereas petroleum volumes are increasing. One could argue that Buffet is betting on more crude being transported via rail as domestic production increases due to shale/fracking. That's a bet on technological innovation and one that has paid off thus far.

Rail Data

This. The BNSF tracks go through my little 'burg. We are up to 80 or more trains per day, most of them oil trains from the Dakotas. This was not the case when I moved here in 1997.

It was (and is) a bet on the bureaucratic and political lethargy slowing down pipeline development.

I consider it a global warming play. Similar to pasting a green label on a product to sell to suckers.

Hmmm. I wonder if anti-pipline folks have made pipelines the new dams -- hard to build new ones.

Whoa! Crude oil by rail really is booming!

Three years ago I would never have guessed it, but the US now resembles Russia in the amount of oil transported over rail. The anti-pipeline folks have ironically made the world less safe given that light crude by rail has an order of magnitude higher safety risk than light oil by pipeline. That being said a lot of this oil would be moving by rail anyway given the fact that the way wells deplete in North Dakota and Texas, by the time the pipeline is built the oil has run out and the drills have moved on.

Paypal made Thiel a rich man, but does anybody consider Paypal a technological breakthrough? What is innovation? Sure, the computer and microchips have allowed great strides in processing information and data, but to what purpose? Is Facebook a technological breakthrough? I think we confuse impressive gadgets with innovation. Vaccines to treat and prevent disease, that's innovation. Paypal?

How else am I going to pay for my cutting edge Atari cartridges from eBay?

Use your head, man.

Clearly people value Paypal a lot, much more than vaccines for viruses they have no conceivable chance of getting. Paypal lubricates commerce, making it easier for people to trade. What you're ignoring is the value of trade to the trading parties, the food, the tools, the entertainment, the labor, the medical supplies etc.

Vaccines are largely at a point of diminishing returns. Software is cheap if not free to add the marginal customer and the big wins are for software with network effects and switching costs. That the big wins are in software is in fact evidence of a kind of stagnation.

You really should get out a bit more. What has PayPal made possible that was not possible or practical previously?

eBay. That's why they bought it. Okay, it wasn't impossible before Paypal, but it sure made selling goods to strangers who live a long way away a lot easier. Also, Thiel himself just today said Paypal failed at its original goal of creating an alternative currency

Is the money made in oil over the last 50 years because of a lack of technological progress in the world? Or is because of the increased demand for oil over the last 50 years due to technological progress? Same with rare metals.

"Or is because of the increased demand for oil over the last 50 years due to technological progress? "

I'm not sure there's been much increased demand for oil due to technological progress in the last 50 years. Certainly not in the last 30 years. The increased demand is from poor countries starting to get richer and utilizing technology that already existed 50 years ago. If all technological progress had stopped 30 years ago, we might actually be using more oil than we currently do.

"Same with rare metals."

The increased demand for rare metals is probably directly tied to technological progress.

Calling a website technological innovation also implies stagnation.

Who is Thiel's audience that can write things like these and no one points the finger to the naked emperor?

Rails are a significant component of transport infrastructure around the world. Self-powered rail transport it's a 19th century technology such as electricity. Also, it's borderline stupid how he ignores the impact of plant genetics and genetic engineering in agriculture.

He made a great job with PayPal and a great bet with Facebook. Those are accomplishments 99.9% of world population won't ever do in their lifetimes. However, that doesn't qualify him to tell the rest of the world they're doing it wrong.

I'll wait for the capital management firm of Mr. Thiel.............since it's not happening, it's just another case of NOT putting your money where your mouth is.

He did found a hedge fund (Clarium Capital) and a VC firm (Founders Fund).

I have no idea what Clarium has been doing recently, but it apparently lost money in 2009 and by the beginning of 2011 was down 65% from its high water mark. A bit shy of Buffett's performance barring an enormous turnaround.

I read him (with p < 100% obviously) as a guy who is very visionary and overconfident. The dollar is going to collapse! (Which I think I read was the impetus for his original idea for Paypal.) Peak oil! Etc etc. He was very lucky with one idea, and that vision and overconfidence really really paid off, but not necessarily a genius forecaster.

Plant genetics?

I thought the big thing was nitrogen from dinosaur poop.

Ever heard of corn hybrids? It is one of the best examples of successful technology transfer from pure fundamental science to applied knowledge. The effect of hybridization spans from late 30s to 90s.

Attributing this development only to nitrogen fertilizers is disrespect to American plant scientists :(

Does this dispute or address what I actually said?

To be fair, sometimes your comments resemble dyfalu.


Of genetics versus fertilizer which is the bigger impact?

Further genetic improvements involve genetic engineering. Does that sound easy?

What about this is difficult to evaluate?

BT corn is nice. At least it isn't a known neurotoxin. Although it is going to create resistance.

The context of the stagnation thing is not there won't be new bells and whistles. The question is what is going to replace the compound growth rates of the industrial revolution, the hydrocarbon exploitation, etc.

I agree that he underestimates the innovation in the genetic engineering of our food supply. I find it hard to imagine that people 50 or 60 years ago would be able to believe that the market is able to feed this many people with very few wide scale famines or food shortages. That's innovation that matters IMO and I'm a complete optimist in that innovation will continue to occur in this area.

Thiel is wrong on several counts.

1. It doesn't take much effort on your part if you are lucky to be in an industry dominated by a cartel, and you ride the wagon for $35 oil to $100 oil due in part to a war in the middle east, embargoes on export, and no fly zones. Oil is a cartel. Sometimes it collapses as it did in the 90s, sometimes it holds together better when some members are restricted on selling, by either war or embargoes and sanctions.

2. Buffets trains. Thiel claims it is coal that Buffet bet on; no, its oil and the slowness of building pipelines. Those are oil trains, not coal trains. You can look at the amount of coal shipped by train over time, and the amount of oil shipped by train over time. Guess which one has been rising, guess which one has been falling. If Thiel thinks that coal is it, he really has a problem or he is deceiving you.

"2. Buffets trains. Thiel claims it is coal that Buffet bet on; no, its oil and the slowness of building pipelines. Those are oil trains, not coal trains. You can look at the amount of coal shipped by train over time, and the amount of oil shipped by train over time. Guess which one has been rising, guess which one has been falling. If Thiel thinks that coal is it, he really has a problem or he is deceiving you."

How does that change Thiel's fundamental point? I'm not sure I buy into Thiel's point, but transporting oil vs transporting coal is hardly a sign of recent technological progress and doesn't negate his underlying premise. In any case, Thiel explicitly says he expects us to run out of oil, so I would presume he believes, as the oil dries up the trains will switch back to moving coal.

I'd be interested in making long-term investments in the train industry, not because of coal but because of retail shipments. I have a suspicion that we're eventually going to the price of gas, innovative logistics, and a shortage of people who want to drive big trucks cross-country are going to eventually drive us into shipping more consumer freight by train car.

Thiel's original premise is wrong. The Forbes list of billionaires is an indicator of the structure of ownership (I.e. who gets the surplus value from the economic activity) not an indicator of the value of the economic activity itself.

This too.

"At the 2:30 mark of the interview below with Charlie Rose, Buffett explains why he thought the railroad was a good acquisition. "

I think the primary driver for Buffett's investing is the ability to allocate enormous capital to stable investments, and as a bonus he can sometimes get bargains where others aren't rich enough to do it. He isn't doing what we would do.

How does this list compare to a similar list a few decades ago?

The creation of horizontal drilling techniques, and then combining them with hydraulic fracturing certainly have been among the most impactful technological innovations of the last 30 years. Of course, the "Father of Fracking," George P. Mitchell, was worth a paltry ~$2 billion when he died last year, so he doesn't make Thiel's list, but still . . .

Is this lack of technological progress, or is it that tech progress, most tech progress that turns a profit (not some internet freeware thing) these days, is made by engineers, who are owned by companies, who are owned by shareholders?

Whereas mining natural resources? Perhaps a powerful personality can gather capital negotiate for themselves, start up, gather momentum, succeed.

Is this lack of technological progress, or Thiel being confused (or ideologically blinkered by Sil Valley fantasies?) about what is really the best industry to be a start up in?

"I sort-of date the end of rapid technological progress to the late-60s or early-70s. At that point something more or less broke in this country and in the western world more generally which has put us into a zone where there’s much slower technological progress."

What is this "something" though?

Low-hanging fruit of all sorts exhausted? ERoEI just sunk like a stone due to environmental limitations? Not enough of the right type of war to steer technological investment? Globalization via some mechanism that will eventually reverse?

on rail - is there a cheaper way to get ten million tonnes of something from A to B every day?

Drones will be useful to bring us parts for the latest gadget we lost the non-usb charger for, but what about moving masses of people, industrially produced goods and resources?

What's happened is that the manipulation of the real world has become expensive and has reached some fundamental technological limits. So we are creating imaginary worlds and experiences in silicon that are much easier to manipulate. Is that bad? Well, if some segment of the real world gets very good at manipulating the real world, they may come and conquer the game players and the simulators and unplug the fantasy.

Just a note, IMHO one should consider the Prius an innovation in the petroleum market. If you get 30% more MPGs from a gallon of gasoline it is like you are paying 30% less than the price at the pump. The Prius is quite high tech.

BTW on this:
The fading of the true Green Revolution — which increased grain yields by 126 percent from 1950 to 1980, but has improved them by only 47 percent in the years since, barely keeping pace with global population growth — has encouraged another, more highly publicized “green revolution” of a more political and less certain character. We may embellish the 2011 Arab Spring as the hopeful by-product of the information age, but we should not downplay the primary role of runaway food prices and of the many desperate people who became more hungry than scared. (Source)

I have friend who is a PHD Agronomist from Brazil and he says that if all growers in brazil used the latest optimum practices that total output could be increased to 6 times the current output.

Real oil prices today exceed those of the Carter catastrophe of 1979–80. Nixon’s 1974 call for full energy independence by 1980 has given way to Obama’s 2011 call for one-third oil independence by 2020. (Source)

To add to what I said above: When we buy fuel we buy travel at a given level of safety and comfort. Today's ICE are more efficient and cars are safer and more comfortable and accelerate much faster so we get more of what we want from our fuel dollars.

On energy, thorium and solar combined with efficiency gains seem a reason for some optimism.

Don't think in terms of MPG, think in terms of gallons-per-100 (or 1000) miles. MPG is a denominator, and results in a lot of things that don't feel intuitive. For example, the fuel savings going from 15 to 20 mpg is greater than the fuel savings from going from 35 to 45. When you compare similar-sized cars, the Prius isn't all that huge an improvement, considering non-hybrid cars of the same size usually get low/mid-30s. The shift from 17-mpg SUVs to 26-mpg crossovers has and will save way more fuel than going from 33-mpg small sedans to 41-mps hybrid versions of the same

Normal engines have actually gotten more mechanically efficient pretty continuously over the last 30-40 years. The reason MPG hasn't improved much is because until recently the consumer has consistently preferred more horsepower to better milage. It's pretty typical today for a run-of-the-mill mass market family sedan to have ~250 hp today. A generation ago it would have been rare for that to be above 180 or 190

Thiel's point about rail being an anti-innovation bet is plain wrong. He doesn't see the underlying resource cost constraint and simply assumes that all exogenous industry growth is connected to the success or failure of technology. The future of energy is going to involve a shift from low-efficiency uses like personal vehicles, air travel and air freight towards to high-efficiency processes like marine shipping, rail and mass transit. This is a function of underlying (cheap) resource depletion, not innovation failure. The most sympathetic interpretation I could make of Thiel's position is that investment in trains is a bet that resource depletion effects will overwhelm innovation in the short term. But that's not the argument he makes.

A couple points:

1) The idea that natural resources are "not tech" is BS. The rich-person list is going to be overweighted to corrupt rent-seekers in corrupt places, but that is not the case in natural resources generally. At heart, every oil company is an engineering company.

2) Warren Buffett's bet on rail is a vastly more complex wager than Thiel makes it out to be. As at least one commenter above has pointed out, it is first and foremost a bet on oil-by-rail shipments displacing coal shipments. Pipelines are more (physically, mechanically, energy) efficient in moving oil, so Buffett is gambling that a) the destination flexibility of rail over pipelines will trump the physical efficiency disadvantage b) political opposition will hamper pipeline development. Additionally, the Panama Canal expansion will allow for a big expansion of contaner ship deliveries to gulf coast and east coast ports (as the giant container ships from China will be able to get there now), and rail shipment is much more efficient than truck shipment. With containers he is making something of an opposite bet re oil- that the cheapness of rail will trump the locational flexibility of trucking (at least over long hauls)

3) Thiel does have a point that in some sense this is a bet against the success of "clean tech" and increased efficiency. The core problem is that for transportation purposes, we have not been able to come up with a battery that can match the energy density (by volume or weight) of petroleum fuels, nor have we figured out how to make them less capital-intensive. Conspiracy theorists notwithstanding, it has not been for lack of trying. The ultimate trump card of oil is that either by weight or by volume, it is the most efficient way to store energy that doesn't require a nuclear reactor to convert into usable forms. That hasn't changed in a century.

2) It's not really a "bet" when he's actively lobbying against the pipelines. It's more like naked rentseeking.

In many ways, just agreeing with you and putting it into my own words and perspectives.

on 1) - the Canadian and Australian mining industries almost certainly agree, as do the hundreds of thousands of engineers and scientists who have worked in these industries over the time frame selected. A Canadian firm can pay engineers hundreds of thousands annually and still outcompete the rest of the world in some of the most technically challenging operations on the planet.

2) metal on metal is very low friction. Far more so than rubber on asphault. This is why rail is a good bet if you expect the future to involve moving large volumes of inputs and outputs.

3) The storage problem (batteries, etc.) is probably the holy grail in clean tech energy. hydrogen cells looked promising. It seems that existing infrastructure for electricity gears a lot of minds to work with electricity rather than thinking about how to design an entire new infrastructure.

Incentives matter.

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