New Energy in the "Free Market" Age: Will large corporations really be able to help us?

I read with interest an op-ed article "The Courage to Develop Clean Energy" by Jeffrey Immelt and Jonathan Lash in the 21 May 2005 Washington Post. The title seemed to come right out of the theme of the NEM conference in September 2004 in Portland, Oregon entitled "New Energy: The Courage to Change" Without yet identifying the authors of such a seemingly prophetic piece, I read on.

"After inventing the light bulb", the essay begins, "Thomas Edison was asked where he grew inspiration from. ,I find out what the world needs', Edison replied, ,then I proceed to invent.'"Who are these enlighted beings, I asked, that were able to speak our language (and Edison's) and be able to break through into the mainstream media as well, denied to us for such a long time?

Eagerly, I read more. Immelt and Lash proposed that three ingredients were necessary for developing clean energy: "(1) the brainpower to develop new technology, (2) a market that makes clean technologies profitable, and (3) a strong dose of American will." Innert and Lash then argued we had the first two ingredients in place, but we needed to develop the third. I don't agree. The requirement for profit, under some conditions, might actually eliminate many promising options which are either not ready yet or are intrinsically cheap. Hence Corporate America's emphasis on more mundane and massively deployed technologies which could quickly turn in the profit. Hmmm, who were these authors anyway?

My eyes then flashed down to the authors' biographies. Jeffrey Immelt is chairman and CEO of General Electric Company and Jonathan Lash is president of the World Resources Institute. Heavy hitters...

What can we learn from their statement? In my opinion we all have a lot in common, except for the profit "requirement". What kinds of profits? Who decides how much profit is enough? To satisfy shareholders, any company like GE must turn in a humongous profit in the energy and war machinery fields to grow and thrive. All this assumes, then, that any kind of new energy must come under a private capitalistic umbrella. The implication here is that, if a new energy technology were basically free, then it might not be worth GE's or any other large corporation's while to press forward with the technology. They would pass. Or tap into the long sordid history of promising new technologies being buried to maintain a profitable status quo.

This leads to a more fundamental question: what if a given commodity which was highly polluting but profitable (e.g., oil, coal, gas and nuclear power) could be replaced by a very cheap clean technology which would turn in very low profits? Would GE be happy if it had to give up its nuclear and gas turbine power plants for this? Dubious. The article clearly implied that no large corporation accountable to its shareholders could give up their profits for something less profitable. In fact, the authors gloss over the rationale for their profit requirement and making the profit motive axiomatically true for all energy technologies at all times. They then shift the blame for our poor energy track record to what they see as the lack of the third ingredient: a strong dose of American will. I would argue, to the contrary, that the first and third ingredients are there but latent, and that the capitalistic axiom is what is blocking us.

Some of us have examined in other essays on this website objections to a new energy future posed by scientists, environmentalists, and the U.S. government But this one recent article coming from the bowels of the U.S. corporate Establishment, while giving lip service to innovation, can effectively veto concepts that cannot turn in sufficient profits. New energy would appear to be a candidate for a veto. Meanwhile, the CEO class can blithely blame the American people for their lack of will. Very tricky, and dishonest...

Think about it. I believe that some corporations have become so powerful, they have set our energy policies purely out of the profit motive and have joined at the hip with the U.S. government through power brokering and fighting resource wars . But this issue so affects the global commons to let wars and privatized resource grabs and conventional power generation to dominate our decisions. When it comes to energy, war and water, the public will need to learn how to take its power back, to awaken so we can steer the ship of state away from catastrophe. That process is now well underway here in Latin America and needs to enter the consciousness of the American people at this critical juncture.

Of course, in the real world, the "profit axiom" does dominate and may be the greatest source of the suppression of new energy. Not that we shouldn't make profits from new energy developments. But profits cannot be the pacing item in bringing in new energy. Alas, many of us in the U.S. particularly look at the world through the fuzzy filter of privatization as a panacea to world economic challenges. But can we trust the testimony and rationales of those now in power? Or do we truly have the courage to address fallacious assumptions about future policies that would require turning in huge profits?

The corporatization of basic human activities have made a mockery of Adam Smith's original thinking about free markets. Instead it has led to the dangerous accumulation of private power warned about by so many former U.S. presidents including Jefferson, Lincoln, both Roosevelts and Eisenhower. The CEO of General Electric can wax eloquently about clean energy innovation and blame the American people for their lack of will, but does GE have the courage to tame (I'm not saying eliminate) the profit motive in the event of significant new energy breakthroughs?

I have an open question for Mr. Immelt. Hypothetically, what if GE were to be invited to manufacture 10 billion clean 10-kilwatt new energy power packs to be sold to the whole world for $10 apiece, turning in only a small profit, certainly not on the scale of GE's conventional power plant systems? Would GE do it or pass or maybe suppress the new technologies? What other corporations would want to be involved and and how? Is this not a question of cooperation trumping competition?

Answering this question could give us a key to our collective survival. And if Mr. Immelt or any other CEO's answer perchance were to be yes, then profits truly could combine with ethics and I'd like to collaborate. I'd also like access back to the media which has effectively blacked out new energy activities. Meanwhile, we can be very wary of making much progress with the capitalists, and I know much of this would seem heretical to the Amerian way. But we need to create a new context for change that transcends the optimization of profits. That's only a part of the picture and has held us in its grips for much too long. The New Energy Movement is in search of more discussion of these pressing issues.

Brian O'Leary, Ph.D
July 2005