Forget electric vehicles: carbon is the future

Back in 2004, the film The Day After Tomorrow depicted the end of the world, as we know it, through extreme changes in weather that plunge us into another Ice Age.

In the film the cause of these extremes in weather was global warming and while the science is wildly inaccurate, there has been something ominously truthful in its predictions.

This year in the UK alone, we had record heatwaves, forest fires and snow in March. In the US it’s been even more extreme – as shown by the tragic California wildfires.

The problem is our production of carbon. Something we do almost every day. Switching the lights on and off, heating our homes or driving all burn fossil fuels and release carbon. The carbon traps heat and temperatures rise.

In order to prevent further warming it is clear that drastic changes need to happen, with the UN stating the world will require a transformation in society that is “unprecedented in scale”.

Even with an apocalyptic warning, seen from examples such as the fire in Paradise, California, people still choose to push back on global warming as fake.

Donald Trump, arguably the leader of the climate change deniers, refuses to accept the extremes in weather as any indication of global warming. Instead, in the case of the wild fires in California, it was negligence. Forest miss-management that he comically suggested could be resolved through raking the forest floors.

I believe for most people the resistance to global warming is less an objection of the science, and more an objection to the changes people would have to undergo, if they were to accept it as true.

As cited above, the transformation in society would be unprecedented and would affect all walks of life, in everything we do. And ultimately, people are resistant to change.

Despite the gross ignorance, which is frustratingly obvious, in some ways I understand people rejecting the solutions to climate change because, at the moment, the solutions are singular. They do not offer any choice.

The one lane solution

The automotive industry is a prime example; the only viable solution offered up is electric vehicles. But, for people who already own combustion cars the move to expensive electric vehicles is not desirable.

As an example, my grandparents, who live in London, were promised cheaper tax by the government if they bought themselves a diesel car. Now they are being told that was the wrong decision. Diesel is actually worse, and they must purchase an electric vehicle. Unsurprisingly, they are frustrated by the prospect.

Moreover, despite all their benefits to the climate, electric vehicles are not without their flaws. The infrastructure for electric vehicles, for example, is expensive. It’s currently costing the tax payers £400 million for a charging network.

To put that in perspective, it was the promise of £350 million in extra funding for the NHS that has been credited as one of the deciding factors in the Brexit vote.

If the charging network were to be installed, it would require the national grid to produce another 20 gigawatts of energy in order for it to function properly. This is double the amount of energy currently generated by all the UK’s nuclear power stations.

Furthermore, at a time where reducing our carbon emissions in the energy sector is as crucial as the transport sector, the extra 20 gigawatts, if produced from fossil fuels, could make the positive impact from electric vehicles obsolete.

Now, I believe electric vehicles will play a crucial role in the development of our society. They are inherently a good thing. They create cleaner, less polluted environments, they are on the whole carbon neutral and it is a step away from fossil fuel reliance.

But what about offering a choice? Giving people an option to be climate change aware without a dependence on electric vehicles.

Welcome to the fast lane

I have discovered a company out in Squamish, Canada, that offers this option. It is called Carbon Engineering and it is using carbon to create fuel. What I think is so clever about its approach to climate change is that it has succeeded in making the problem part of the solution.

By using its DAC (direct air capture technology) Carbon Engineering sucks air out of the atmosphere and refines it, removing the carbon. It then combines the carbon with hydrogen and water to create fuel, a fuel that is chemically identical and, therefore, 100% compatible with the vehicles we use today.

Not only is it chemically identical but it is high performance, it burns clean and it is carbon neutral. What this means is it has created a fuel that is great for your car (better than the petrol or diesel we use today), it is less pollutant – making our roads cleaner – and it doesn’t contribute to global warming.

And, this is using the same infrastructure we already have in place. I’m sure you can understand the economic value of maintaining infrastructure rather than completely changing it. But just to hammer home how cost effective this solution is, we might imagine a scenario where we replace all cars with electric vehicles.

There are one billion cars in the world. For an estimation, let’s say everyone replaces their cars with the cheapest Tesla, which costs $35,000. To replace every car with an electric car right now could cost in the region of $35 trillion. This is using the cheapest model of Tesla you can get. And we would still be spending $35 trillion.

Carbon Engineering has not only developed a fuel that is carbon neutral but it goes one step further. It actively removes carbon from the air. Using the same DAC technology, which refines carbon for fuel, it can remove the carbon and store it underground.

Therefore, when using the carbon neutral fuel that Carbon Engineering produces, plus the safe removal and storage of carbon underground, one can contribute negative emissions. What this means is that while driving, you could be actively contributing to the removal of CO2 from the atmosphere, rather than its production.

For me that’s incredible. I am environmentally conscious but I am also interested in motorsports. With this fuel, my interest in motorsports would not have to be in contention with my push for environmentally friendly causes. It’s a win-win.

And, while this is a menial example, I think the implications of this technology stretch much further than that – for the everyday person, I think it matters. For most people, going “green”, as they say, is difficult because it results in changes to everyday life and perhaps even taking away the things people have enjoyed.

With this technology, they don’t have to do that (at least from the automotive sense). They have the choice either to go electric or to carry on as they were.

As with everything, Carbon Engineering does have its drawbacks. Unfortunately, it has similar pitfalls to electric vehicles. The plants use a lot of energy to operate and if this energy is not supplied by a renewable source then, like charging your vehicle that gets its electricity from the oil-powered plant,  it is no longer a completely emissions-free endeavour.

On top of this, we have the issue of cost. While electric vehicles and their infrastructure are expensive, unfortunately this is too. At the time of writing, it costs about $100-$150 per tonne of CO2 captured. This is if an individual DAC plant is operating at max capacity capturing one million tonnes of CO2 per year. The price probably increases as the plants get smaller and even so, $150 per tonne is still pricey.

However, this is not a finished project, it is still a private company looking for investors and if you compare it to other carbon capture companies such as the European company Climeworks, which is using CO2 to boost plants photosynthesis, its running costs last year was $600 per tonne of CO2.

The importance of choice

I believe what it comes down to is a matter of choice. Electric vehicles are making leaps and bounds in the automotive industry and that’s a good thing. I remember the G-Whiz being the only electric car on the road. Now multiple manufactures are chiming in and building technologically advanced motors that blow the current combustion cars out of the water.

But in many ways we just aren’t ready for them, and while they are the future, they don’t have to be the only future. There are other options.

Instead of the government implementing bans and forcing us into a single lane, one should be able to make their own decisions. Choosing either combustion engines or electric vehicles as they see fit. What companies like Carbon Engineering do is re-open the other lane. They add choice to people’s decisions and allow us to upgrade and replace.

Unfortunately, this company is still private, but I believe its potential is massive. Its current investors include Bill Gates, and you can be sure that it will be making headlines in the future.

Until next time,

Donovan Mathews
Exponential Investor

Category: Energy

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