Like most serious energy geeks, I'm a huge fan of Vaclav Smil, Distinguished Professor Emeritus at the University of Manitoba in Winnipeg, Canada. His detailed and highly empirical work on energy is enormously useful for those who would have a realistic grasp on the future of energy.

But for heaven's sake, don't forecast the future of energy. Nothing brings down the Wrath of Smil like a confident forecast.

Consider his long hostility to the notion of peak oil. To cite just two examples, see his February 2013 editorial for the American Enterprise Institute, "Memories of Peak Oil," and his February 2007 op-ed for TCS Daily, "Peak Performance?"

In the latter, Smil argues against peak oil on the merits of price: "If there is an imminent peak of oil extraction, should not then the prospective shortage of that increasingly precious fuel result in relentlessly rising prices and should not buying a barrel of oil and holding onto it be an unbeatable investment?" He notes that a barrel of oil purchased for $12.23 a barrel in 1976 and sold for $60 in 2006 would have earned only 1.2 percent a year, a "vastly inferior" return.

But oil prices were depressed in the late 1990s and early 2000s partly because, as Smil notes in the former article, Russia had restored production after "a prolonged post-1991 extraction dip caused by the economic problems of post-Soviet Russia" and caused a short-term glut. We didn't really see the obvious fingerprints of peak oil until the long growth trajectory for global conventional crude oil ended in 2004, so using 1976 as a starting point seems highly selective. A barrel of West Texas Intermediate oil could have been purchased at the beginning of 2002 for $21.13 and sold exactly 10 years later for $102.96, delivering a 17.15% annual rate of return. I think most people, looking back over the past decade, would regard that as an outstanding investment.

In fact, price is the one thing that Smil doesn't mention in "Memories of Peak Oil," because it wouldn't support his view. Instead, he buries the reader in context-free production data, pointing out that the world reached a new crude oil production record in 2012, a whole 1 percent higher than the 2011 total. This was "a remarkable achievement" which disproved "any preordained and immutable validity of Hubbert’s curves (which attempt to infallibly predict U.S. and world oil output for decades to come!)" in Smil's estimation.

The advent of horizontal drilling and fracking have conspired to produce an "impressive" reversal in U.S. oil production, which "catastrophists and peak-oil cultists will find…impossible to ignore," he wrote.

Indeed it is impressive, although the U.S. is at no risk of replacing its need for oil imports any time soon (no matter what the IEA says). This data-driven student of peak oil -- I certainly wouldn't call myself a catastrophist or a cultist -- would point out that peak oil is indeed reflected in our current reality, not only by stubbornly high prices, but by exploding expenses for oil production and increasingly marginal results.

From the beginning of 2004, the year in which conventional crude production plateaued, to the end of 2012, the price of Brent oil (the global benchmark) increased by 375 percent. That near-quadrupling in price produced only a 4.31 percent increase in average annual crude production over the same period. Without that repricing, oil production would have fallen hard, because the remaining resources are poor in quality and have low flow rates. High prices are required to make them viable, and recent comments by industry and the IEA suggest they're still not high enough.

Smil notes that "even though the IEA acknowledges that the world has already reached the peak of conventional oil extraction and that the continuing rise in output is now due only to rising recovery of unconventional sources…that conclusion rests on accepting an arbitrary divide between the two categories," whose definitions evolve over time.

Well, the peak of conventional oil extraction is precisely what peak oil is about. But putting that aside, while the point about shifting definitions is fair, if pedantic, it's also true that unconventional oil from sources like tar sands and tight oil (shale oil) is far more expensive than the old, cheap, conventional crude it is trying to replace. So the distinction is not merely arbitrary, but highly relevant.

In part, today's higher oil prices are a function of the lower productivity of unconventional sources. For example, it takes just 35 rigs operating in conventional fields in Kuwait to produce 2 million barrels a day of oil, while in Texas, where tight oil production from the Eagle Ford formation is all the rage and contributing to the "impressive" reversal Smil touts, it now takes 800 rigs to produce the same amount. The gradual shift to increasingly poor sources is also why domestic oil extraction used to return more than 100 kilojoules of energy per kilojoule invested in the 1930s, but only returns between 11 and 18 kilojoules today.

Transition time

If peak oil prognosticators ruffle Smil's feathers, then those who project a rapid transition from fossil fuels to renewables really make him apoplectic.

In his excellent book Energy Transitions -- a scholarly work on the history of energy transitions packed with data that all renewable advocates should read -- Smil is dismissive of the progress of renewables. In my well-thumbed and dog-eared copy, I highlighted this fact: Generation from wind, geothermal, PV and biomass was just 3 percent of total electricity in 2008, of which half was from wind, while solar contributed just 0.05 percent.

Yet by 2010 those sources accounted for 4.19 percent of electricity generation, according to the IEA's World Energy Outlook 2012, where wind accounted for 1.85 percent and PV accounted for 0.17 percent. When 2012 data is released, it will likely show that these renewables now contribute more than 5 percent. Including hydro, renewables provided 22.8 percent of global electricity generation in 2010.

Energy Transitions was published in 2010, so it seems unlikely that Smil simply wasn't aware that renewables have been growing much more rapidly than the data he cites suggest. From 2000 to 2010, electricity generation from wind grew by 27 percent and solar PV by 42 percent per year on average, according to the IEA WEO 2012.

Smil's mantra is this: "All of the past shifts to new sources of primary energy have been gradual, prolonged affairs, with new sources taking decades from the beginning of production to become more than insignificant contributors, and then another two to three decades before capturing a quarter or a third of their respective markets."

It's also possible that wind and solar could execute the most rapid primary energy transition in history.

Energy analyst Gregor Macdonald's analysis of BP data shows that solar power consumption has increased at a compound annual growth rate of 63.2 percent over the past five years. He believes it should be able to maintain that rate as its rapidly falling costs and simplicity of deployment undercut alternatives. If so, solar would provide more than 10 percent of global electricity demand by 2020, surpassing nuclear generation, even while global power consumption grows by 3.4 percent per year.

In Germany, the world's solar power leader, renewables have grown from 3 percent of generation in 1990 to 23 percent in 2012 -- a very rapid market penetration by historical standards. On a particularly sunny and windy day, power prices in Germany actually go negative. And in Denmark, wind power already meets 100 percent of power demand at certain times -- an eventuality that Smil didn't mention while speculating that large offshore wind might obtain a 50 percent share in that country by 2025.

Smil carefully documented the S-curve nature of energy transitions in his book, with "slow initial advances followed by a rapid rise, an eventual inflection point, and rapidly declining increments toward saturation," but wasn't convinced that the rapid rise phase had already begun. Apart from wind in some EU countries, he believed that "we cannot deploy any particular distribution in confident forecasting." However, he expressed "a great deal of confidence" that even if goals for a rapid transition to renewables "were met, the global primary energy supply in 2025 or 2030 will still be overwhelmingly dominated by fossil fuels and it is highly unlikely that the combined share of coals and hydrocarbons will fall below 50 percent of the aggregate energy demand by 2050."

That is probably true for all primary energy, although it's conceivable that renewables could meet half the world's electricity demand by 2050, with perhaps 20 percent from wind and 10 percent or more from solar -- in line with what Smil considers a normal timeframe for transition. With the vigorous participation of the world's developing economies, we could reach that point even earlier.

Lest I incur the Wrath of Smil: This isn't a prediction. But it's useful to know that it's possible if we work to make it happen. If instead we lie back and say, "Ah, but it would take decades, and fossil fuels will dominate until then," it might not happen with the level of urgency needed to meet our climate challenges.

What is certain -- and what Smil has so far failed to recognize -- is that countries with renewable-friendly policies have entered the "rapid rise" phase of the S-curve, and that a growing number of analysts believe that solar power will be cost-competitive with fossil-fueled grid power by 2020 in much of the world. High penetration rates are being achieved much sooner than the history of energy transitions suggest, and are already playing havoc with utilities' business models. By annualizing the growth rate of all renewables between 1990 and 2008 to 2.85 percent, he starts the clock early during the "slow initial advance" phase. The unwitting reader would have no idea that growth rates for wind and solar have been in double digits for over a decade.

Smil notes that the world only added about 4 gigawatts of peak power in 2007, concluding that therefore "it is not at all certain if we are just years from the formation of a J-bend on the technique's growth/adoption logistic curve -- or if that take-off point is far from being so imminent."

It now seems clear that the take-off point was already upon us when Smil wrote those words. Global installations of PV were 20 gigawatts in 2010, 28 gigawatts in 2011, 29 gigawatts in 2012, and are forecast by GTM Research to be 35 gigawatts in 2013.

The view from Contrary Mountain

What really aggravates Smil is "exaggerated, unwarranted claims regarding the pace and near-term exploits of new renewable conversions." He rails at length against aspirational models put forth by transitionistas like Al Gore, Amory Lovins, and T. Boone Pickens, hurling epithets like "grandiose," "a grand delusion," and "pathetic prayer-like advertisements." He beats Matthew Simmons and M. King Hubbert like rented mules. He declaims the application of Moore's law to solar PV because the growth of PV isn't about increasing efficiency.

But in so doing, he is essentially assailing straw men and missing the point. Gore and Lovins have set forth aspirational goals that surely will not be met, but they serve a useful purpose in motivating progress toward what Smil calls the fourth great energy transition: to renewables. (The first was the mastery of fire; the second was from foraging to agriculture and domesticated animals; the third was from biomass fuels and labor provided by animals and humans to engines burning fossil fuels.)

Indeed, Smil is "hopeful in the long run" about the next transition, and calls it "both desirable (above all on environmental and strategic grounds) and inevitable." And although he prefers to "abstain from any long-term quantitative forecasts," he believes that "having in mind an ultimate goal -- one that cannot be reached in one or even two generations but that would serve as a long-term inspiration -- would be helpful."

Apart from the timeframe, is that not precisely what figures like Gore and Lovins and Pickens have done? Is obtaining 100 percent of electrical power from renewables not a helpful ultimate goal? Has Germany not grown its renewable supply from 3 percent to 23 percent in less than one generation using non-hydro renewables? And haven't they achieved those rapid growth rates using a great deal of distributed generation, without the "profound spatial restructuring with major environmental and socioeconomic consequences" Smil asserts would be required for a solar-based system?

Have we not entered an era of permanently tripled oil prices and exploding costs for oil production, which have enabled a negligible increase in production at ever-growing costs and risks to the environment, more or less when numerous peak oil models said we would?

Are we not now drilling thousands of wells in marginal resources to replace what a handful of wells have done in the past?

Are we not getting less energy from oil in return for greater effort? Certainly some analysts who espoused the peak oil view -- particularly those who believed that U.S. oil production was in irreversible decline -- were premature or too fatalistic, but that doesn't make the entire notion of peak oil wrong.

The strange thing is that Smil undoubtedly knows all of the counterpoints I've made to his arguments here. He might have a better grip on hard energy data than anyone alive today. Yet his use of that data is selective, and he is unperturbed when his arguments shift or contradict themselves as needed to win the point of the moment. He seems to have fallen into the trap of knee-jerk contrarianism: No one else can be right, and his truth must always be different from the consensus. Academics are wont to fall into these traps when they discover the pleasures of being public truth-seekers.

How could the world's most foremost energy historian not recognize that he is living in the peak oil moment now? And how could he be so dismissive of the rapid progress that renewable energy is now making? Smil's work can be immensely useful to those who are working on the fourth great energy transition, so it's unfortunate that he has allowed it to be used by staunch anti-renewables agitators like the American Enterprise Institute.

The history of energy transitions is fascinating and can be instructive. It is not, however, a golden yardstick for the fourth great energy transition. Smil would caution against applying it to the future too confidently if he wasn't doing so himself.

This isn't 1850 or 1950; it's not even 1990. Information now flows around the world at light speed, and global supply chains can be reconfigured in months instead of decades. Whereas previous energy transitions happened mainly by default because newer fuels and machines were better, cheaper, and/or more abundant, this transition is deliberate, being at least partly driven by an urgent and growing awareness that we must do it to avoid self-destruction. It certainly could happen more quickly.

To be sure, we should not expect the fourth great transition to happen overnight. Nor should we regard the outlook of a contrarian who abjures quantitative forecasts as gospel truth, or allow it to dampen our enthusiasm for a transition that he acknowledges is desirable and inevitable.

So please, Dr. Smil: Come down from Contrary Mountain, pick up a shovel, and help us get this job done.


Chris Nelder is an energy analyst and consultant who has written about energy and investing for more than a decade. He is the author of two books (Profit from the Peak and Investing in Renewable Energy) and hundreds of articles, and has been published by Scientific American, Slate, the Harvard Business Review blog, Financial Times AlphavilleQuartz, the Economist Intelligence Unit, and many other publications.