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Insights from “How the World Really Works.”

“I am not talking about what could be done, I’m looking at the world as it is.”
- Vaclav Smil

Why this is worth your time? Published last Tuesday, this book couldn’t be better timed. Vaclav Smil is a distinguished scientist committed to explaining the modern world’s material foundations. This is the culmination of his life’s work and previous 40 books.

The dominant theme of this exact moment in history is the focus on digital flows giving way to the limitations of physical reality. The “exponential age of technological abundance” is now encountering some extremely primal forces of war, famine, and disease.

Source: Getty Images

This delightfully combative interview with the New York Times will give you a good sense if this book is for you.

What is the book about? A valuable expert can tell you precisely what’s happening right now, then their opinion, then their forecast. Smil’s work separates what we all might want to be true from what is currently true and what is likely to be possible in the near future. He illustrates the current state of the fundamental building blocks of the modern world. His “Four Pillars of Civilization” are cement, steel, plastics, and ammonia.

“In 2019, the world consumed about 4.5 billion tons of cement, 1.8 billion tons of steel, 370 million tons of plastics, and 150 million tons of ammonia.”

These pillars are essential, energy intensive and utterly embedded in the fabric of our limitlessly complex society. We are now operating at such unimaginable scale, that even if a superior substitute were found for any of these today, actually replacing them could take decades.

Cement is a good example. In just two years (2018 and 2019), China produced nearly as much cement as the U.S. did during the entire 20th century. The world now consumes more cement in a single year than it did during the entire first half of the 20th century. Cement also degrades over time, which means it needs to be constantly replaced. A less energy-intensive replacement would need to scale up to meet that kind of extraordinary and completely historically unprecedented perpetual demand. Currently there are no commercially available and mass-scale alternatives that can displace any of the established processes for producing the four pillars.

Food

Food is another remarkably topical example. The unfolding agricultural crisis is making many more of us aware of the precarious nature of global food production. Natural gas is the most important feedstock for the synthesis of ammonia, as both the source of hydrogen and processing energy. Smil’s assessment of the importance of ammonia is staggering.

“In 2020, nearly 4 billion people would not have been alive without synthetic ammonia…. the Haber-Bosch synthesis of ammonia [is] perhaps the most momentous technical advance in history.”

But it’s not just fertilizers, fossil fuels have also revolutionized the entire process of food production. Producing wheat now takes less than two hours of human labor per hectare (compared to 150 hours in 1801). This has freed up a vast proportion of the population to do other things:

“Between 1800 and 2020, we reduced the labor needed to produce a kilogram of grain by more than 98%—and we reduced the share of the country’s population engaged in agriculture by the same large margin.”

The question is therefore how you either make these processes less energy intensive or provide a scalable alternative.

Energy Intensity

The underlying theme of Smil’s work is the basic physics of energy intensity. Bill Gates has described Smil as one of his favorite scientists. Gates said something several years ago I’ve thought about a lot.

“When I was trying to figure out why lives have improved so much in the last 300 years, where we've gone from a third of kids dying before 5 to - by 1990 it was down to 10% - now it's down to 5%. And saying why, over all history, there were smart people, but that number didn't change. Average lifespan didn't change. What's magical about what's been deemed the Industrial Revolution? It's really energy intensity.”

Smil notes that our modern lives are staggeringly energy intensive.

“An average inhabitant of the Earth nowadays has at their disposal nearly 700 times more useful energy than their ancestors had at the beginning of the 19th century…. And when put in terms of physical labor, it is as if 60 adults would be working non-stop, day and night, for each average person; and for the inhabitants of affluent countries this equivalent of steadily laboring adults would be, depending on the specific country, mostly between 200 and 240.”

This makes the transfer of Western living standards to the lower-income world a wildly tricky conundrum. If the countries whose standard of living today is the same as China’s in 1999 were to achieve only a tenth of China’s recent growth, the results would still be extraordinary. They would experience a 10x increase in car ownership and a 40x increase in air conditioners.

But looking at the four pillars the outcome would be even more extreme:

“Replicating the post-1990 Chinese experience in those countries would amount to a 15-fold increase of steel output, a more than 10-fold boost for cement production, a more than doubling of ammonia synthesis, and a more than 30-fold increase of plastic syntheses.”

Decarbonization

Taken in this context, it’s obvious that Smil is extremely skeptical about neat targets based around specific years with limited quantitative commitments. The promise of renewables is also tricky. Electricity gets a lot of the focus; but it’s only 18% of global final energy consumption.

For example, Germany will soon generate half of its electricity from renewables. But the total share of fossil fuels in the country’s primary energy supply has only declined from about 84% to 78%.

The U.S. share of fossil fuels in primary energy supply was still 80% in 2019. Meanwhile China’s internal share of fossil fuels fell from 93% in 2000 to 85% in 2019—but demand for fossil fuels tripled in the same timeframe! China’s rise is the main reason why the global consumption of fossil fuels rose by about 45% during the first two decades of the 21st century. It’s also why, “despite extensive and expensive expansion of renewable energies, the share of fossil fuels in the world’s primary energy supply fell only marginally, from 87% to about 84%.”

Production of the four pillars takes up about 17% of primary energy supply and generates 25% of CO2 emissions. For example, Smil notes that even a highly efficient modern steel Electric Arc Furnace needs as much electricity every day as an American city of about 150,000 people.

Some personal conclusions. The primary criticism aimed at Smil’s analysis is likely to be a lack of imagination. But he fully accepts that the nature of human innovation is relentlessly impressive. It’s the reason these numbers are all so unfathomably large in the first place! But planning for the success of nuclear fusion, hydrogen, asteroid mining, or Mars colonization ignores the importance of our current physical reality. In fact, decarbonization technologies are more likely to be decidedly unsexy things like better insulation, using fewer SUVs, or wasting less food. In energy specifically, we’re already transitioning to more renewables, hydro, nuclear, and cleaner natural gas. It’s my personal opinion that deglobalization is going to accelerate from a relatively gradual phenomenon to a much more rapid trend over the next couple of years. The supply chain crisis got our attention, but Ukraine really lit a fire. Governments will therefore need to rebuild domestic industries, militaries, energy grids, and general infrastructure. This makes understanding the reality of the hard stuff about hard stuff as important as it’s ever been.

Let me know what you think or you’d like to discuss.

Tom

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