The Software Revolution That Will Kill the Oil Industry

A couple days ago, we talked about solar energy and how some believe the bold claim that solar could power the world by 2027 using only 1/10,000th of the sunlight that hits the Earth.

This isn’t idle speculation. Rather, it uses historical trends as a guide.

The same “exponential” curve that allowed the Human Genome Project or computer processing power, for example, to double every two years, is moving solar forward in the same way.

Today, we talk about the bridge that’s going to get us there. In essence, this bridge is a tech that has to do with a form of solar… albeit one that few people talk about: Bioenergy.

Bioenergy does not mean ethanol, or government subsidies, or global warming.

In time, we can use biology to reprogram nature in a way that uses the planet’s remaining coal, gas and oil in a smarter and safer way.

Bioenergy means using biology in innovative ways to release the concentrated sunlight in plants.

But in order for this energy source to make sense… let me back up a bit.

Energy Source No. 3: Bioenergy — Year 2021

First, let’s talk about agriculture. What did technology do to agriculture?

The agricultural revolution has been considered the dawn of civilization. And it can be summed up like this: You’ve heard the saying “Take it or leave it,” yes?

For millennia, when humans were hunter-gatherers, they effectively took only what they needed and left what they didn’t. Then at some point, we decided to not “leave it,” but “take it”… take more than we needed for the moment and tell the powers that be — nature, the gods, competing predators — that we were going to have it our way.

We used technology and saved the fruits of our labor because we found better means to store them. Take more than you need for the moment. Prepare for the future. No other animals “take it” on such a grand scale as human beings. We went from a “leave it” culture to a “take it” culture. And the takers systematically killed off the leavers.

Some scholars even believe the “Cain and Abel” story in the bible actually describes this moment, when Cain, the crop farmer, slays his brother, Abel, the shepherd.

Others believe we became a culture of farmers simply because the environment forced us to change. The harsh weather meant we had to plan ahead, store food and create technology that kept us warm and as well-fed as possible.

Check a map of the globe and you’ll see that many civilizations in colder areas advanced more speedily than warmer climates. Perhaps it was because they had to innovate or die. After innovating again and again… here’s what happened to productivity.

In 9000 B.C., the agricultural revolution started. We began rearranging rivers and streams to irrigate and used hand-held tools and virtual slave labor to plow.

By 1830, it took us 250 hours to produce 100 bushels of wheat. But our machinery became more advanced.

By 1890, it was 40 hours.

By 1930, with the plow, tractor and fertilizer, it was 15 hours.

By 1960, with more chemical engineering, it was five hours.

By the 1990s, we were applying infotech and biotech to make it more efficient than ever.

The most rapid jump, as you can imagine, is going from a brute-force method of chemical engineering — using pesticides and herbicides and more — to biological engineering.

We decided to use a more elegant form of knowledge that could change our food from the inside out so that it “naturally” fends off pests, etc. It all had to do with rewriting the genes of life, and in this case, plant DNA.

That was agriculture. So the question is: Why not do this with energy?

In other words, what if we applied biology to energy in the same way we applied biology to agriculture?

Yes… I understand there is the organic food movement… but at least with energy… we won’t be eating it. We can regrow algae, for example, rather than ship corn to ethanol processing plants in Iowa. In some cases, the energy input to output ratio of ethanol is 1:1.

We can do a lot better than that. We can make smarter use of biofuels through genetically reprogramming plants like algae, which is basically oil in its younger form — before it has rotted under pressure for millions of years and turned into a fossil.

In time, we can use biology to reprogram nature in a way that uses the planet’s remaining coal, gas and oil in a smarter and safer way. For example, we can create bacteria that eat waste and produce electricity. Or, we can provide shortcuts, such as organisms that extract coal from mines… rather than using brute force to rip off entire mountaintops.

Such a bioenergy movement would make the perfect transition to the newer alternative energies we’ve discussed this week.

Learning Our Life Code ABC’s

Biology is in the most exciting phase right now that it’s ever been in. Why?

We’re learning to treat a cell as hardware and genes as software.

In the past few decades, we learned to write in 1s and 0s, which is where most of our economic growth came from. Companies like Google, Microsoft, and Apple depend on binary code. It’s what allows all computer hardware and software to operate.

Now, we’re learning to write life code, using the language of DNA: our genes, cells and more.

Hamilton Smith, who won the Nobel Prize for figuring out how to cut genes using something called restriction enzymes, has proved that “digital life” is possible.

Smith built the first transplant of naked DNA. With this naked DNA, a biologist can take an entire DNA operating system out of one cell, insert it into a different cell and have that cell boot up as a different species…

The infancy of genomics was learning to read genes. The next phase will be learning to write it.

Just as in agriculture, and human health, we can write life code that grows energy.

Is Oil Concentrated Sunlight?

What on earth is oil? We still don’t know exactly. One of the best theories out there, however, is that plants absorbed sunlight, rotted under pressure for millions of years and turned into these black rivers underground. In all likelihood, oil is concentrated sunlight inside of fossilized algae.

Maybe that’s why you get these rainbow colors in oil:

So what companies are using genomics to innovate towards better bioenergy?

The best example is Synthetic Genomics. The company was founded by Craig Venter, whose previous company, Celera Genomics, was a driving force in the race to sequence the human genome to produce alternative fuels.

As of 2009, the company is working to produce biofuels on an industrial scale using recombinant algae and other microorganisms. It’s getting funding from companies like Exxon Mobil for this venture. As soon as it goes public, you’ll be the first to hear about it.

Here’s a fun question for you to think about…

If these biotechs takes off like they should, will it mark the end of oil?

Tune in tomorrow as we continue our series with what comes before bioenergy.

Best,

Josh Grasmick
for The Daily Reckoning

Ed. Note: In today’s issue of Tomorrow in Review, Josh clued his readers in to a substance that may be considered a precursor to bioenergy, and gave them a chance to discover the tiny company that’s manufacturing this “miracle water.” If you’re not getting the Tomorrow in Review email edition, you’re not getting the full story – or the investment opportunities that come with it. So don’t wait… Sign up for FREE, right here and start getting up-to-the-minute info on the world’s most exciting tech stories.