We Interrupt the Ongoing Crisis for a Smidgen of Good News

DeepSeek Shakes the Stupidity of the Tech-Industrial Complex

This is either a data center in London, or a locker room at an expensive gym

This is not the newsletter I promised the other day—not the part 2 on How We Make Progress. That’s coming soon. But since we’ve all been weathering the head-spinning assault on the Constitution by the new administration (and, at Third Act and elsewhere, trying to do something about it), I thought it might make sense to provide you with one interesting piece of good news.

It concerns this DeepSeek Chinese AI program that you’ve doubtless been reading about in recent days. I’m the last person to turn to for an analysis of its virtues (I remain fully dependent on my highly-developed Natural Cluelessness), but I am very clear that it complicates the main current task of the fossil fuel industry: glomming onto AI as the latest excuse for building out a bunch of gas-fired power plants.

That narrative—which has been building for a year or so—holds that we will need so much electricity for the data centers to keep this technology running that we’ll have to give up on dealing with climate change for now. It reached its zenith last week when the new administration announced something called Stargate, a $500 billion plan that, as President Trump put it, would be “the largest AI infrastructure project in history.” This was the moment when he declared an “energy emergency” so that we could build more power plants (but not, of course, the solar/battery parks that Silicon Valley experts have testified would be the most efficient way to power these megacenters).

I would venture to say, given Trump’s predilections, that he neither understands nor cares much about the AI part of all of this, but he completely groks it as a way to pay back Big Oil for the $445 million they invested in the last election. (Political donations come in millions with an M, and the paybacks come in billions with a B—of our money). As Bloomberg reported, the whole DeepSeek incident shows how dependent on this AI story the fossil fuel industry is as an excuse for expansion (just as a couple of years ago it was dependent on the Ukraine war story)

In one brutal blow, DeepSeek has revealed just how many energy-related businesses in the US have been banking on an artificial intelligence boom — and the surge in power demand it was supposed to bring.

For the past year, their growth expectations and share prices were boosted by the belief that AI would require an unprecedented wave of data center construction, with some centers needing as much electricity as entire cities. Utilities and power plant operators benefited, too, but the effect went far wider than such obvious industries, touching an astonishing array of companies.

That became clear the moment China’s DeepSeek unveiled a chatbot that could rival the best American AI programs while using just a fraction of the electricity, perhaps as little as 10%. DeepSeek’s announcement hammered the shares of uranium producers and natural gas pipeline operators alike. Companies that supply power plant equipment and data center cooling systems suffered as well in Monday’s big selloff.

I don’t think we know enough yet to know if that claim—”rival the best American AI programs while using just a fraction of the electricity, perhaps as little as 10%”—is actually true. There are voices in the U.S. today beginning to claim that DeepSeek plundered American code to make its breakthroughs (which is truly funny, since American AI merrily plundered everything everyone has ever written, to make its breakthroughs). And there are others saying that DeepSeek, by making AI more affordable, will actually increase the amount that it is used.

But it does seem as if something new is afoot—the search for efficiency, instead of just massive brute force—in constructing artificial intelligence. As the investment gurus Dylan Lewis and Tim Beyers at the Motley Fool put it

One of the main things that has popped up a lot in the reporting on this is that the compute necessary for what is running on DeepSeek is a fraction of the compute for some of the other systems. Watching the way that the market is processing this, we are seeing big tech companies take a hit. We are seeing some of the chip companies take a hit. We're also seeing energy companies take a hit because there is this feeling that maybe as we get a little bit more technologically advanced as other players start coming into the space, some of the energy demands for this technology won't be as big as people have maybe originally thought.

and

There is no way we are going to be building out the amount of energy infrastructure required to service all this at the level we are talking about in the timeframe we were talking about. Then what happens? You have a constraint. Do you keep doing what you're doing and overwhelm the energy infrastructure, knowing full well you can't build it out at the level that you want to, in the timeframe you want to, or do you do what the industry always does, which is find areas of efficiency to scale in a better, more economical way? That's what always happens.

I’m not beginning to tell you how all this comes out. All I’m saying is, the increasingly gloomy idea that there was no possible way we could every deal with climate because AI would soak up every new electron that sun and wind could ever provide, may not be quite as true as it seemed to some a week ago. (It would be awfully nice if this kind of move towards computing efficiency catches on—here’s another story from this week, about new software fixes that seem capable of reducing power demand at these data centers by thirty percent.)

You could, I think, even draw a crude analogy between DeepSeek and solar power, in that it seems to be producing the same thing that OpenAI and Meta are producing for a fraction of the cost, the same way that photovoltaics produces power more cheaply than Exxon. And since it’s open source, it undercuts them in another way too: anyone can get their hands on this and work with it. (“Anyone” meaning anyone who knows what they’re doing—not me, obviously). The advantage of hoarding chips, which has been Big Tech’s strategy may turn out to be kind of like the advantage of hoarding “reserves” of hydrocarbons—less solid than might have been expected. To complete this imperfect analogy, AI, like the solar cell, may have been invented in the U.S., but it’s China who may figure out how to make the most of it.

It was only two (very long) weeks ago that President Biden, in his farewell address, warned us against the “tech-industrial complex.” Some youngsters, working around the constraints imposed by the U.S., seem to have struck a blow in that direction. It’s obviously far too much to hope that the U.S. and China might cooperate to develop this new technology in some rational way—the best we can hope for, I think, is that they won’t actually destroy the planet en route to whatever nirvana these new intelligences have in mind for us.

In other energy and climate news:

+Here’s a fun story. The head of the Saudi state oil company is insisting that the renewable energy transition is failing. But they’re also investing heavily in…renewable energy. As Justin Mikulka points out, something has to keep the cash flowing so that Saudi princes can buy soccer teams and golf leagues

Last year they announced investment in what was at the time the world’s largest solar power plant. Saudi Aramco, the oil company, is one of the investors in the project which is part of the country’s plan to generate 50% of its electricity from renewables by 2030.

The Saudis are also investing in lithium production. This article from last year explains the reasoning for this investment, “Saudi Arabia’s ambitions for an electric vehicle supply chain are part of its push to diversify the national economy away from oil, a project guided by the government’s Vision 2030 reform plan.” Part of the plan is a quarter trillion dollar investment in renewable energy such as “plans to develop 30 solar and wind projects over the next nine years as part of a $50 billion program to boost power generation and cut oil consumption.” They are also investing to upgrade their national power grid to be able to increase capacity.

Last month the Saudi’s invested another billion dollars in U.S.-based electric vehicle manufacturer Lucid. The Saudis now own 60% of the company.

Meanwhile, OilPrice.com supplies some more remarkable numbers from the region

In Oman, the government aims to increase the contribution of renewable energy to the energy mix to 30 percent by 2030, between 60 and 70 percent by 2040, and 100 percent by 2050. This month, the government inaugurated the Manah 1 and Manah 2 solar photovoltaic (PV) power plants in the Wilayat of Manah in Al Dakhiliyah Governorate. Together, they have a production capacity of 1 GW and are the largest to date

I have strolled the corniche in Muscat in 115 degree heat and I predict this technology will work.

+The always reliable Andrew Dessler offers a concise account of how having lots of renewable energy on the grid saves consumers money. I’m not going to quote from it—just go read it. If you’re like me you’ll be smarter when you’re done.

+I think the new UK energy secretary Ed Milliband has been doing a basically good job—he’s kept Britain solidly on course to build out renewable power. But he seems to have also decided to follow Joe Manchin down the carbon capture and sequestration route, investing $22 billion of British tax money in the scheme. The London newspapers are taking him to task. In the Independent:

Energy secretary Ed Miliband only consulted fossil fuel companies, including oil giants BP, Eni and Equinor, between the general election and the government’s announcement to pump almost £22bn into controversial carbon capture and storage programmes, documents show.

The details of meetings released to The Independent under freedom of information rules show that Mr Miliband only met with broader industry members like academics and clean energy advocates after the 4 October commitment, sparking criticism the policy surrounding the contentious technology was being driven by oil and gas firm

+According to the Xinhua news agency, China is building what can only be described as…a lot of batteries

China's new energy storage sector has seen a rapid growth in 2024, with installed capacity surpassing 70 million kilowatts, said an official with the National Energy Administration (NEA).

Bian Guangqi, deputy director of the NEA's energy saving and technology equipment department said that by the end of 2024, the total installed capacity of new energy storage projects in China reached 73.76 million kilowatts, which represented an increase of over 130 percent compared to the end of 2023. The average energy storage duration is 2.3 hours, an increase of about 0.2 hours since the end of 2023.

By the way, China in November of last year adopted its first official Energy Law,

The law notably states that China will prioritise renewable energy development such as hydropower, wind energy, solar energy, biomass energy, geothermal energy, marine energy, and hydrogen energy, while encouraging a rational, clean, and efficient use of fossil fuels. It promotes a safe, reliable, orderly transition from fossil fuels to non-fossil alternatives, aiming to increase the proportion of non-fossil energy consumption.

Compare that to the formula the Trump administration just announced in its energy emergency announcement. “Energy,” it said, would consist only of

“crude oil, natural gas, lease condensates, natural gas liquids, refined petroleum products, uranium, coal, biofuels, geothermal heat, the kinetic movement of flowing water, and critical minerals.”

The two superpowers have literally decided to do precisely the opposite things. It should be…interesting.

https://www.theguardian.com/environment/2024/dec/05/climate-crisis-insurance-premiums

+The financial wizards at IEEFA point out that it was another bad year for fossil fuel stocks, which wildly underperformed the broader market.

These results are becoming a familiar story. The fossil fuel sector has underperformed the S&P 500 in seven of the last 10 years, delivering the lowest performance and highest volatility of any S&P sector. Oil, gas, and coal have been unreliable and inconsistent contributors to long-term investment portfolios.

“The traditional fossil fuel business model faces structural risks in a decarbonizing world, and the industry has yet to demonstrate a coherent response to this reality,” said Connor Chung, IEEFA energy finance analyst and co-author of the report. “Investors should take note that the industry has spent much of the last decade dragging down long-term investment portfolios.”

+Fast Company’s Adele Peters attempts to explain why Donald Trump hates wind so much. It all has to do with…golf

One of his most frequent arguments against wind power is that wind farms are ugly—and that’s where Trump’s own antipathy began. In 2006, he bought land along the coast in Scotland to build a golf course. Then he learned that an offshore wind farm was planned for the area. Worried about the view, he filed a complaint with the government, describing the wind farm as “an ugly cloud hanging over the future of the great Scottish coastline,” and arguing that the wind farm should be relocated or shouldn’t be built at all.

At the time, Trump wasn’t yet a vocal opponent of climate science. In 2009, two years before he started fighting the wind farm, as the world gathered for climate talks in Copenhagen, Trump signed an open letter calling for climate action that ran as an ad in The New York Times. It said, “If we fail to act now, it is scientifically irrefutable that there will be catastrophic and irreversible consequences for humanity and our planet.”

But as his feud with the Scottish government grew, Trump ramped up his complaints about the energy source. In hundreds of tweets, he talked about how wind turbines are “bad for people’s health,” “ruining the beautiful parts of the country,” and “disgusting looking.” (By 2012, he was also claiming that climate change was a hoax created by China.)

+We’re starting to get some more in-depth reporting from the wild fires in LA. Veteran writer Abe Streep has a powerful piece in the new issue of New York that gives you some sense of the scale and the fury

Park was sent to the fire’s western front in Malibu. Along the Pacific Coast Highway, he and 15 colleagues prepared to defend oceanfront homes. He chose two houses that were near a hydrant so he could refill the tank on his truck. After clearing debris from the front of the homes, he directed his team to move flammable material to back decks overlooking the sea. The smoke cloud drifted overhead, blocking the sun, and flames appeared on a ridge. The fire announced itself with a sound like a jet engine. Embers began to rain down —  “Just tens of thousands of tiny little embers,” Park said. “It’s the most beautiful and most terrifying thing.”

Park lost one house and saved another; he permitted one of his colleagues to try to extinguish a fire in the upper story of an apartment building, then thought better of it and ran into the black smoke, retrieving the man. Then Park got word that some people might not have evacuated from a road called Rambla Pacifico, which is notorious among firefighters. The road runs up an overgrown canyon where homes are built into the vegetation. It lacks escape routes, and many homes don’t have adequate defensible space — the clearance around a building that allows firefighters to do their work.

When I asked Park how he felt about risking his life to save houses that had been built into thick brush, he paused, then said, “If that’s how people choose to live their life, I respect their choice to live that way. But also, keep your expectations tempered. You gotta accept the consequences of your own decisions.” He and his crew drove along Rambla Pacifico. “It was just fire 360 degrees all around,” he said. “It was above. It was below. The duff on the ground. There were power lines down that were on fire. The poles were on fire.”

Meanwhile, the first “attribution studies” of the LA fires are making it clear that climate change dramatically increased the risks. As Inside Climate News reported,

Global warming caused mainly by burning of fossil fuels made the hot, dry and windy conditions that drove the recent deadly fires around Los Angeles about 35 percent more likely to occur, an international team of scientists concluded in a rapid attribution analysis released Tuesday.

Today’s climate, heated 2.3 degrees Fahrenheit (1.3 Celsius) above the 1850-1900 pre-industrial average, based on a 10-year running average, also increased the overlap between flammable drought conditions and the strong Santa Ana winds that propelled the flames from vegetated open space into neighborhoods, killing at least 28 people and destroying or damaging more than 16,000 structures.

“Climate change is continuing to destroy lives and livelihoods in the U.S.” said Friederike Otto, senior climate science lecturer at Imperial College London and co-lead of World Weather Attribution, the research group that analyzed the link between global warming and the fires. Last October, a WWA analysis found global warming fingerprints on all 10 of the world’s deadliest weather disasters since 2004.

Several methods and lines of evidence used in the analysis confirm that climate change made the catastrophic LA wildfires more likely, said report co-author Theo Keeping, a wildfire researcher at the Leverhulme Centre for Wildfires at Imperial College London.

“With every fraction of a degree of warming, the chance of extremely dry, easier-to-burn conditions around the city of LA gets higher and higher,” he said. “Very wet years with lush vegetation growth are increasingly likely to be followed by drought, so dry fuel for wildfires can become more abundant as the climate warms.”

+The essential analyst Brett Christophers has a long essay in the London Review of Books pointing out that the fossil fuel industry has survived the Paris accords intact—much of their effort to force them to “strand assets” by keeping hydrocarbons in the ground has run out of steam.

We live carbon-intensive lives, especially in the global North. This was all too apparent during the inflation surge of 2021-23, when sharp increases in oil and gas prices accounted, especially via household energy prices, for a large share of headline inflation. The concern among policymakers is that a reduction in fossil fuel supply – the very object of stranding – without a commensurate reduction in demand could only result in one thing: a rise in prices. And that is anathema to governments, which as we have seen tend to get ejected from office after periods of inflation. This is why governments worldwide have maintained vast demand-side fossil fuel subsidies – tax exemptions, fuel vouchers, even direct support to consumers – through decades of climate breakdown, and why meaningful carbon taxes have rarely been implemented.

As usual, I think the only way to even begin to square this circle has to do with the rapid deployment of renewables—though as Christophers pointed out in his important 2024 book The Price is Wrong that won’t be easy.

+Some good news as we end. For the first time ever, Europe made more energy from solar power than from coal last year. The Guardian:

Solar panels generated 11% of the EU’s electricity in 2024, while coal-burning power plants generated 10%, according to data from climate thinktank Ember. The role of fossil gas fell for the fifth year in a row to cover 16% of the electricity mix.

“This is a milestone,” said Beatrice Petrovich, co-author of the report. “Coal is the oldest way of producing electricity, but also the dirtiest. Solar is the rising star.”

Rising star indeed. As David Vetter points out in Forbes in an article about a new report from the thinktank Ember, fossil fuels—even as they control the Trump administration—are losing sway across their birthplace

“Fossil fuels are losing their grip on EU energy,” said report lead author Chris Rosslowe, commenting on the release. “At the start of the European Green Deal in 2019, few thought the EU’s energy transition could be where it is today; wind and solar are pushing coal to the margins and forcing gas into structural decline.”

And now back to fighting fascism for a while!