Jeremy Grantham, Chief Investment Officer of GMO Capital, gets it! He would be appalled that Hawai‘i, in the middle of the ocean, seems to feel no vulnerability.
For 20 to 30 years, the world has been using twice as much oil as it’s been finding. The world has fundamentally changed and soon we will pay dearly. Hawai‘i is very vulnerable.
One idea for a solution is biofuels, but that is about feed stock, which involves farmers farming –- and farmers won’t do it for the low payment that is expected.
“Base power” is potentially 85 percent of electricity’s cost, and so we need to concentrate on “base power” in order to get bang for our buck.
Geothermal is a cheap, stable, proven technology “base power.” We need to maximize geothermal for the benefit of all our people, or we will have wasted a valuable resource.
Farmers and other “rubbah slippah folks” clearly understand this. They know that the folks on the lowest rungs of the economic ladder get their lights turned off first.
They also know that folks with money will leave the grid if electricity rates go too high, leaving the rest to pay more.
We should not choose an energy policy that separates us into the “haves” and the “have nots.”
Jeremy Grantham is the Chief Investment Officer of GMO Capital (with over $106 billion in assets under management). He is one of the world’s largest asset managers and articulates the same themes that have been debated on The Oil Drum for the past 6 years.
In his Fall 2008 GMO newsletter, he commented on the underlying causes of the world credit crisis that had just taken place. This article is significant for its content and especially because of who is saying it:
“I ask myself, ‘Why is it that several dozen people saw this crisis coming for years?’ I described it as being like watching a train wreck in very slow motion. It seemed so inevitable and so merciless, and yet the bosses of Merrill Lynch and Citi and even [U.S. Treasury Secretary] Hank Paulson and [Fed Chairman Ben] Bernanke — none of them seemed to see it coming.
I have a theory that people who find themselves running major-league companies are real organization-management types who focus on what they are doing this quarter or this annual budget. They are somewhat impatient, and focused on the present. Seeing these things requires more people with a historical perspective who are more thoughtful and more right-brained — but we end up with an army of left-brained immediate doers (emphasis added).
So it’s more or less guaranteed that every time we get an outlying, obscure event that has never happened before in history, they are always going to miss it. And the three or four-dozen-odd characters screaming about it are always going to be ignored. . . .
So we kept putting organization people — people who can influence and persuade and cajole — into top jobs that once-in-a-blue-moon take great creativity and historical insight. But they don’t have those skills….”
Read the rest here