• A nail in the coffin of renewable energy
  • You can’t just magic up more resources
  • A new solution is needed

What if the fatal flaw of the renewable energy transition has nothing to do with energy at all, but with something far more simple? A consideration so obvious that it is hidden in plain sight from the economists and politicians who claim we can reach net zero by building vast amounts of renewable energy and energy storage.

According to a report by Simon Michaux of the Finnish Geological Survey, it really is that simple. Here’s how he explained it to me in an interview…

Nick Hubble:

You summarise this report by saying it “puts a nail in the coffin of certainly a 100% renewable strategy, but probably a renewables dominant strategy.” And you focus that analysis on mining specifically. So what was it about mining and resources and metals that makes that the most important constraint?

Simon Michaux:

So what’s happened is we’ve fundamentally misunderstood the commodities industry. At the moment, for example, oil, gas, coal, and uranium are commodities that lead to our energy. And we have treated them like infinite resources. We’ll always find more. And what is not understood is our ability to extract those resources is the limitation, not the resources themselves. Like, there’s lithium in seawater. Great. Can we access it though? in a viable way, probably not.

So if we’re going to knock out fossil fuels, what we’re going to replace them with is a whole lot of technologies that require metal and it has to come from mining. So I looked at the whole value chain. The first sore spot is going to be the current industrial capacity of China to manufacture stuff. It is too small, right? Even as large as it is. But okay, we can resolve that by building more stuff.

What we can’t do is magic up more minerals. Now the mining industry is actually where I came from in Australia. So it’s an area I was comfortable with. I was able to show that our ability to produce the needed number of metals as we are at the moment is well and truly not good enough. If we were to go down this path [of the energy transition].

And so then I was to look at the basic question of, well, if the mining industry was to aggressively expand, how much by? Are we talking about, like, an extra 10 mines a year or what? So the answer is a couple of thousand percent. And that is the way the mining industry actually has to operate. That’s not practical. It’s just not feasible. Certainly not from the time we’ve got.

Now, time was the problem. I sat in a European Commission meeting in 2017 and they were talking about being 100% green transition compliant by 2030. So everything’s electrified by 2030. And what I remember thinking at the time was that that statement was untethered from reality. It’s terrible. But it was taken as law. And everyone’s nodding along, “yeah, that’s what we’re going to do.” And we’re going, “wow.”

So if minerals are the new oil, how are we going to manage that when we’re moving into an era of scarcity and where the ability to [refine and manufacture] is concentrated geographically on one part of the planet and everyone else is dependent on that bottleneck. And that spells a situation that’s very difficult to manage.

So what I was trying to do is to lay down the boundary conditions of what is rolling in – the hard numbers. Because the apparent solution to a lot of this will be, “We can’t magic up more commodities and we can’t really change our industry profile very quickly, but society itself can flexibly respond and it can respond in an emergency context.”

It’ll probably be like a shortage, like things will just be unavailable on the market and we’ll just have to make do. But it’s not a temporary thing. We’re talking about a permanent shift and a permanent contraction. But you need a data foundation to say that. And that, I suppose, is one of the purposes of the work.

Nick Hubble:

It’s like you pointed out the emperor has no clothes, but in a very scientific way. And I’d be fascinated to know what happens when you present and when you do speak up in those types of meetings, like you mentioned.

Simon Michaux:

They’re all very polite. They’re all very supportive. In the year, I’ve now presented this work 160 times. 91 of those times is in the year 2022. And it was to some fairly high-profile people all over the world. And so what I found was there was a pattern, 100% of the time. First, they were shocked. They were completely unprepared. They didn’t know how to respond.

The second thing was they couldn’t refute what I was saying because the data sources I was using were blue chip and I had the assumptions up. It is based on assumptions. But the third thing is, they actually came back and they said, “All right, mate, you scared the hell out of us. Now you’re going to fix it. Tell us what to do.”

Stay tuned to discover just how outlandish the net zero energy transition really is once you consider the raw materials needed, and how you could profit from this…

Until next time,

Nick Hubble
Editor, Fortune & Freedom