Thunder Said Energy: homage to the Waste Land?

‘What the Thunder Said’ is the final section of T. S. Eliot’s 1922 masterpiece, the Waste Land. The poem describes a bleak and unproductive world. Nothing will grow. We think it is important to avoid the world becoming a Waste Land. Environmentally. Industrially For investors. So we humbly hope that Thunder Said Energy’s research into the energy transition can help.

An Environmental Waste Land?

“What branches grow out of this stony rubbish? Son of man, you cannot say, or guess, for you know only a heap of broken images, where the sun beats, and the dead tree gives no shelter, the cricket no relief, and the dry stone no sound of water. Come in under the shadow of this red rock, and I will show you something different from either your shadow at morning striding behind you or your shadow at evening rising to meet you. I will show you fear in a handful of dust”.

The primary motivation for the energy transition is to avoid Planet Earth becoming a Waste Land due to the destruction of the natural world, rising global temperatures, and a planet that ultimately becomes unhospitable.

Global temperatures have risen by over 1.2C since pre-industrial times (data below), which is primarily due to rising atmospheric CO2 concentrations, rising methane concentrations and other greenhouse gases, and there are pathways looming that will see 3-8C of global warming by the end of the century.

The reasons for rising atmospheric CO2 span across a constellation of over 40 industries, which each explain more than 0.5% of the world’s CO2. These industries have another name — “the entire global economy”. It is tempting to scapegoat one or two industries. But it is unproductive. Ultimately, a credible roadmap to net zero must address every single bar on the chart below. This requires finding constructive solutions.

In our view, the saddest source of CO2 emissions is from the destruction of nature. Each year 10M hectares of primary forest is destroyed, which releases more CO2 than all of the world’s passenger cars. One third of the world’s primary forests have been destroyed in total, releasing an average of 200 tons of CO2-equivalents from 5bn acres of the Earth’s surface. This is 1 trillion tons of CO2-equivalents, and possibly as much as one-third of all anthropogenic emissions to-date. It has negative consequences for 40M species on planet Earth. Hence a large part of our roadmap to net zero specifically focused on restoring nature, forests and high-quality CO2 removals.

An Industrial Waste Land?

“Phlebas the Phoenician, a fortnight dead, forgot the cry of gulls, and the deep sea swell, and the profit and loss. A current under sea picked his bones in whispers”.

Devastating energy shortages have their own problems, which are also detrimental to human civilization. Following $600bn of cumulative under-investment, global energy markets are likely to be 2-10% under-supplied through 2030. As a result, energy prices must rise to the level that “destroys demand”. In turn, higher energy prices are likely to absorb an additional 10% of global GDP, which remarkably, is a 3x higher cost than the energy transition itself.

Reasons energy shortage matters
Primary energy has absorbed 4% of global GDP on average, going back to 1900. It spikes to 8% in the first oil shock, 12% in the second oil shock, and could surpass 14% in the late 2020s without sufficient energy investment.

Clearly, categorically, restoring the world’s energy surplus should be an important goal of the ESG movement, as important decarbonization itself. This is not instead of achieving an energy transition. It is so that we can achieve an energy transition. The note below outlines this point, clearly, concisely.

What the Thunder Said — the resolution?

“I sat upon the shore Fishing, with the arid plain behind me, Shall I at least set my lands in order? Hieronymo’s mad againe … These fragments I have shored against my ruins”.

The Waste Land’s narrator seems to descend further into madness, as the poem continues. We can sympathize. In our research into the energy transition, we have reviewed hundreds of technologies, modelled the value chains across over one hundred different industrial processes that all need to be decarbonized, and attempted to educate ourselves on the overwhelming complexities of power grids, metals and materials, energy efficiency technologies, modelled dozens of supply-demand balances, and constructed over 1,000 different data-files.

“The black clouds gathered far distant over Himavant. The jungle crouched in silence. Waiting for rain… Then spoke the Thunder…. Datta, Dayadhvam, Damyata, Shantih, Shantih, Shantih”.

‘What the Thunder Said’ is the title of the Waste Land’s final section. It hints at a resolution, bringing rain to the dry Waste Lands below. Large clouds gather over the Himalayas and the thunder begins to speak a few words. Although they happen to be in Sanskrit, and remain painfully cryptic even once translated into English (thanks Eliot).

As a resolution across all of our research, our roadmap to net zero aims to integrate all of our research into a fully modeled pathway, which can meet the energy needs of the world, while also decarbonizing. We hope it is clear, non-cryptic and it is also backed up with dozens of models that can be be evaluated in more detail.

Avoiding An Investment Waste Land?

“Unreal City, Under the brown fog of a winter dawn, A crowd flowed London Bridge, so many, I had not thought the markets had undone so many. Sighs, short and infreuqent were exhaled And each man fixed his eyes before his feet. Flowed up the hill and down King William Street, to where Saint Mary Woolnoth kept the hours; With a dead sound on the final stroke of nine”.

Achieving an energy transition is not going to happen via divestment. Our roadmap to net zero requires primary spending in energy to rise from below $1trn pa today, to $4-5trn per annum. We hope our thematic research into the energy transition helps investors to find opportunities with exciting returns, where the technology “works”, and there are exciting opportunities to support. We have assessed over 1,000 companies to-date in our energy transition research, which is all available via the TSE research portal.

For more on our approach to research, please connect with us.

Copyright: Thunder Said Energy, 2019-2024.