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8.3.16

In The Blink Of An Eye

I want to look at something that has been on my mind for some time.  It's a thought experiment regarding global energy and replacement technology.  The premise is that a new and amazing technology has come along that generates huge amounts of electricity without pollution and with small amounts of cheap, readily available raw materials.

For the purposes of this exercise, we'll assume that Dr. Rossi's E-CAT device is real and viable and commercially available.  We'll also use publicly available data showing that ExxonMobil has a total of 75,300 employees, and extrapolate on that.  We'll also use ExxonMobil's 2014 annual revenues of US$32.5 billion, as a data point.

According to the Wiki-bible, the world consumed 13,371 mega-tonnes of oil-equivalent in 2012, or 5.6 x 10e20 joules from all sources.  Total energy expense for 2011, was US$6 trillion, or roughly 10% of the gross global output that year (likely more each year since).

With these numbers, we see that ExxonMobil's 2014 annual revenues are but 0.54% of annual expenditures.  Using that as a guide, then ExxonMobil's 75,300 employees could be seen as roughly 1% of the global energy labor force.  This would mean that there are about 70 million people worldwide employed in the energy industry, which feels about right, since that is approximately 1% of the world's population estimate.  Taking a WAG (wild-ass guess), let's say the global average annual income of all those folks is US$10,000.  That's an annual total of about US$700 billion in wages.  A sizable chunk of change, if you ask me, especially when you grab 30% for taxes.

Now, along comes Alternative Fuel X (AFX).  It can produce 1Mw of electricity per year for a cost of US$10,000, with little or no maintenance, in a space about the size of a 40-foot container.  Using a conservative estimate for Western countries, 1Mw can supply about 750 houses.  So, AFX can supply electricity to 750 houses for about US$14/year, plus the cost of transmission lines from the generator.

Houston, Texas, to pick a random example, has roughly 718,000 houses.  That means we need 1,000 of our AFX generators to supply every family in the city.  Since the AFX can be installed just about anywhere, we don't need high-tension power lines, sub-stations, or any of that really expensive and high-maintenance equipment to deliver power.  Just 750 high-capacity lines running from the AFX to each of its houses from the parking lot at the local strip center where the box is installed.  Total cost: US$1 million plus cable to install, and about US$500/year to maintain.

Each house now has ample power that is clean, quiet, virtually uninterrupted, and can be maintained by one or two guys in the neighborhood working an hour each week.  Total cost to each house is probably around US$20/year, plus tax.  At that rate, the generator is paid for in one year (no bond issues or other financing needed) and the cost of maintenance is included.

This is a whole lot of data to crunch in your head, and we haven't even gotten into all the ancillary issues, such as power plant workers, linemen, truck and tool manufacturers, even secretaries, real estate, and the thousands of other variables involved in running the computer you are using right now.

Can you imagine what a shock something like the AFX would have on the global economy?  We've only considered home electricity, since AFX wouldn't replace internal combustion engines - at least not right away.  Even if AFX replaced just 10% of global power consumption in the first five years or so, the ripple effect would be enormous.

The price of oil would become almost meaningless to most folks.  Entire job classifications would vanish.  Alternatives such as solar and wind would become useless.  A number of very large global corporations would see their revenues slashed.  Huge government bureaucracies would become even more pointless than they already are.  Municipal bond markets, tax revenues, environmental conservation groups and their bureaucracies...all suddenly unnecessary.

Furthermore, using more or less the same reasoning process, add the economic disruption that will be caused by robots, 3-D printing, add high-temperature super-conductors.  All of these technologies, including AFX are real and are coming to market very fast.

An AFX device in every parking lot, and a robot and 3-D printer in every home would replace just about every service and blue-collar job you can imagine.  It wouldn't take long before there are 3 billion unemployed and angry people in the world, no matter how cheap and wonderful the technology sounds.

Given all this, and the many other technologies that are coming or haven't been invented yet, and we are looking at a mass economic displacement that will be studied for thousands of years if humanity survives it.

And you wonder why the elites of the world are so desperate to preserve the status quo right now?