Inside the Musk Cocoon: Teslarian Tomorrows

"You can either sell or you can drill, but you can't do both."

   

Timing Matters.

If you are a prudent designer of your own future, you are already taking steps to get out of the way of the ear-shattering whoosh when the greatest economic bubble in history bursts the limits of “extend and pretend.”

Nonetheless, how and when you prepare for that historic shift matters. If, like Ted Kaczynski, you hole up in a cabin in the Montana mountains and stop telling people where to find you, you are a very committed prepper. You may miss some of the circus extravaganzas that always attend peaks in civilization (like the Classic Maya theater state).

If, as time passes without any collapse and you become worried about your stranded investment in the downslide, perhaps, like Kaczynski, you will be tempted to bend your talents towards speeding its demise.

You wouldn't want to run up all your credit cards – and those you can quickly acquire – to their limit in anticipation of the crash of the banking system only to discover that it didn't happen that fast, and moreover, your country has recently reinstituted debtors' prisons.

Who would have predicted that global Ponzi civilization had enough staying power not only to survive the hurricane-force gust of the subprime-home-mortgage financial deflation in 2008 but to stretch that same derivatives balloon to many times its impossible size in the ensuing 6 years? What is this thing made of?

As Richard Heinberg points out in his latest book, Afterburn, the current fracking bonanza and its effect on gas prices was predicted in the late 1990s by Peak Oil gurus Campbell and Laherrere. Does the tapping of the Bakkan Shale mean "Saudi America" oil wealth for the next century, climate be damned? Hardly.

Uncorking shale gas drill technology – something that has been known about for half a century  merely demonstrates two key premises: (1) energy addicted industrial nations will seek ways to replace rapidly depleting reserves of fossil energy at any price and (2) replacements will no longer be low hanging fruit unless we are speaking of palm berry ethanol. Mostly, they will be deep ocean, Arctic, fracked shale, and other exotic substitutes at much lower energy density and return on investment and much quicker depletion rates. These substitutes will temporarily depress the price so much it may even fall below production cost, bankrupting producers and curtailing further exploration. "There is no Goldilocks zone," Heinberg says, meaning there is no price point at which it is possible to drill and also sell. You can either sell or you can drill, but you can't do both.

Enter Silicon Valley, home of exuberant optimism, and its Demigod Wunderkind, Elon Musk. For readers living in a Montana cabin and downloading this by ham modem, Musk is the South African lad who dropped out of a PhD track at Stanford (high density capacitors) to start Zip2, a proto-Facebook, in 1995. It sold to Compaq in 1999 for $307 million (hmmm, whatever happened to...). 

Musk, 27, put his profits into another idea that we know today as PayPal. That sold to eBay in 2002 for $1.5 billion. Musk, 30, then put $100 million into SpaceX, whose stated purpose was to colonize Mars with at least a million people over the next century, and then $70 million into Tesla, the electric sports car. Both are now bleeding about $100 million per quarter.

In 2006, he spent $10 million to launch SolarCity, whose goal it was to revolutionize energy production by creating a large, distributed utility that would install solar panel systems on millions of people’s homes. That idea is succeeding nicely, although SCTY is still bleeding red ink.

Musk is profiled by Tim Urban, who had lunch with him earlier this year.

This guy has a lot on his mind across a lot of topics. In this one lunch alone, we covered electric cars, climate change, artificial intelligence, the Fermi Paradox, consciousness, reusable rockets, colonizing Mars, creating an atmosphere on Mars, voting on Mars, genetic programming, his kids, population decline, physics vs. engineering, Edison vs. Tesla, solar power, a carbon tax, the definition of a company, warping spacetime and how this isn’t actually something you can do, nanobots in your bloodstream and how this isn’t actually something you can do, Galileo, Shakespeare, the American forefathers, Henry Ford, Isaac Newton, satellites, and ice ages.

I talked to him for a while about genetic reprogramming. He doesn’t buy the efficacy of typical anti-aging technology efforts, because he believes humans have general expiration dates, and no one fix can help that. He explained: “The whole system is collapsing. You don’t see someone who’s 90 years old and it’s like, they can run super fast but their eyesight is bad. The whole system is shutting down. In order to change that in a serious way, you need to reprogram the genetics or replace every cell in the body.” Now with anyone else—literally anyone else—I would shrug and agree, since he made a good point. But this was Elon Musk, and Elon Musk fixes shit for humanity. So what did I do?

Me: Well…but isn’t this important enough to try? Is this something you’d ever turn your attention to?

Elon: The thing is that all the geneticists have agreed not to reprogram human DNA. So you have to fight not a technical battle but a moral battle.

Me: You’re fighting a lot of battles. You could set up your own thing. The geneticists who are interested—you bring them here. You create a laboratory, and you could change everything.

Elon: You know, I call it the Hitler Problem. Hitler was all about creating the Übermensch and genetic purity, and it’s like—how do you avoid the Hitler Problem? I don’t know.

Me: I think there’s a way. You’ve said before about Henry Ford that he always just found a way around any obstacle, and you do the same thing, you always find a way. And I just think that that’s as important and ambitious a mission as your other things, and I think it’s worth fighting for a way, somehow, around moral issues, around other things.

Elon: I mean I do think there’s…in order to fundamentally solve a lot of these issues, we are going to have to reprogram our DNA. That’s the only way to do it.

Me: And deep down, DNA is just a physical material.

Elon: [Nods, then pauses as he looks over my shoulder in a daze] It’s software.

***

I think I’ve successfully planted the seed. If Musk takes on human genetics 15 years from now and we all end up living to 250 because of it, you all owe me a drink.

Last week Musk, 43, announced that he had inked deals with Panasonic, the Japanese giant tech company, to produce a revolutionary new battery that would dramatically cut the cost of energy storage for renewables. Tesla aims to begin delivering units by this summer from its California car factory and later shift production to a $5 billion Panasonic plant under construction near Reno, Nevada. When the Gigafactory starts production next year, Tesla cells will deliver 12% higher energy density.

Tesla's “power wall” batteries — ranging from a $3,000 7-kWh wall-mounted unit to $25,000 for the 100-kWh unit  represent a significant price drop. Utilities such as Duke and ConEd have installed large battery systems next to wind farms. Nationwide, 62 megawatts of batteries and other energy-storage devices were installed in 2014 at 180 sites, up 40% from the previous year.

In California, state rebates cover 60% of the price of the battery. In the US, batteries that are connected to solar panels are eligible for federal tax credits equal to 30% of the price of the battery.

The battery developed by Musk is not new science. Lithium is the highest energy density element for the anode side of a storage battery. Exxon scientists proposed the idea of using it in batteries in the 1970s, and Sony produced the first commercial Lithium Ion battery in 1991.

What has changed is the quality. The early Sony batteries were lithium cobalt oxide (LiCoO2). Packaged in polymer battery packs, there were problems with runaway overheating and outgassing which Sony discovered only after one of their cellphones caught fire near its user's ear. Tesla had a similar experience with its Model S roadster in 2013.

In 1996 the anion du jour was lithium iron phosphate (LiFePO). Besides being flame resistant, LFP lacked carcinogenicity because it contained no radioactive cobalt. Unfortunately, it was 60% less energy dense. In 2002 performance was boosted by doping LFP with aluminum, niobium and zirconium. In 2013, the standard went to vanadium alloy, which is what you will find in the Tesla and Chevrolet Volt. LFP batteries today have 4 to 5 times longer cycle lifetimes, 8 to 10 times higher discharge power and 30 to 50% less weight than predecessors. Li batteries are enjoying their own Moore's Law.

Musk has been pushing incremental improvements along multiple lines:

Similar to lithium oxides, LiMPO4 may be synthesized by the following methods: 1. solid-phase synthesis, 2. emulsion drying, 3. sol-gel process 4. solution coprecipitation, 5. vapor phase deposition, 6. electrochemical synthesis, 7. electron beam irradiation, 8. microwave process 9. hydrothermal synthesis, 10. ultrasonic pyrolysis, 11. spray pyrolysis, etc. Different processes have different results. For example, in the emulsion drying process, the emulsifier is first mixed with kerosene. Next, the solutions of lithium salts and iron salts are added to this mixture. This process produces carbon particles of nano sizes. Hydrothermal synthesis produces LiMPO4 with good crystallinity. Conductive carbon is obtained by adding polyethylene glycol to the solution followed by thermal processing. Vapor phase deposition produces a thin film LiMPO4. Another type of synthesization is flame spray pyrolysis in which the FePO4 is mixed with Lithium carbonate and glucose and charged with electrolytes. The mixture is then injected inside a flame and goes through a process of filtering to collect the synthesized LiFePO4 at the end.

He describes the evolution in a July 2014 Tesla Conference Call formerly found on YouTube (at 25:23 to 27:37):


25:23 Journalist: On the Gigafactory, is the chemistry going to be the same battery chemistry that you're currently using or is that part of the discussions that are going on with Panasonic?
 

25:34 Elon Musk: There are improvements to the chemistry, as well as improvements to the geometry of the cell. So we would expect to see an energy density improvement and of course a significant cost improvement. JB, do you want to add anything? 


25:53 JB Straubel: Yeah, that's right. The cathode and anode materials themselves are next generation. We're seeing improvements in the maybe 10% to 15% range on the chemistry itself.
 

26:09 Elon Musk:Yeah, in terms of energy density.
 

26:09 JB Straubel: Energy density. And then we're also customizing the cell shape and size to further improve the cost efficiency of the cell and our packaging efficiency.
 

26:22 Elon Musk: Right. We've done a lot of modeling trying to figure out what's the optimal cell size. And it's really not much. It's not a lot different from where we are right now but we're sort of in the roughly 10% more diameter, maybe 10% more height. But then the cubic function effectively ends up being just from a geometry standpoint probably a third more energy for the cell or maybe 30%. And then the actual energy density per unit mass increases.
 

27:09 JB Straubel: Yeah. Fundamentally the chemistry of what's inside is what really defines the cost position. It's often debated what shape and size, but at this point we're developing basically what we feel is the optimum shape and size for the best cost efficiency for an automotive cell.
 

27:25 Elon Musk:Yeah.
 

27:28 Journalist: The chemical formula will be the same, it's just shaped differently or…? 


27:32 Elon Musk: No.


27:32 JB Straubel:No.
 

27:35 Journalist: Is it a different formula?


27:37 Elon Musk: Yeah.

The first thing those of us outside the fog of Silicon Valley ask when we hear about things like a technology breakthrough is, is it safe for the planet, does it deplete non-renewables, and can it scale? Silicon can scale, because it is just sand. The ocean makes more every day. Neodymium, the rare earth at the center of lasers, wind generators and electric car motors, is, despite its periodic table location, not rare. In China it's a fertilizer.

Lithium, on the other hand, is more constrained. About 70 percent of the world’s lithium comes from brine (salt lakes); the remainder is derived from hard rock. The low hanging fruit has already been picked. Research institutes are now developing technology to draw lithium from seawater, with exactly the same as the desperation seen in the hunt for for new uranium.

It takes 750 tons of brine, the base of lithium, and 24 months of preparation to get one ton of pure lithium to alloy. Lithium can also be recycled an unlimited number of times, but it takes 20 tons of spent Li-ion batteries to recover one ton of commercial-grade lithium.

In 2009, total demand for lithium reached almost 92,000 metric tons, of which batteries consumed 26 percent. Musk's announcement, coupled with Telsa's policy of open patents, could push demand up considerably. Should you be looking into lithium futures? At the time of this writing, there are no other materials that can replace lithium with comparable energy density, nor are there battery systems in development that offer the same or better performance as lithium-ion.

The failure to find a Goldilocks zone may eventually come to lithium the same way it came to fracking.

Moreover, graphite, the anode material, could also be in short supply. A large EV battery uses about 25kg (55lb) of anode material. The process to make anode-grade graphite with 99.99 percent purity is expensive and produces much waste. Recycling is difficult and expensive. As we have written here before, biochar substitutes for graphite have been proven effective, at far lower cost, but they lack comparable energy density.  If space is at a premium, as it is in a Tesla Roadster, a biochar anode is not an option. In a home system, it might be.

Musk has hedged his bets. Space X has plans to mine asteroids, and depending on how the surveys of the red planet go (and Peak Debt) we could see Space X lithium mines out there. The million Martian residents need gainful employment, after all, and what better thing to be doing than to power the Tesla Roadsters of Silicon Valley billionaires?

But then, timing is everything. Whether you invest in Panasonic, Solar City and Tesla or a cabin in Montana might be a good indication of how long you think Musk's fantasy has to run its course. In the meantime, everyone stands to gain by cheaper, more powerful batteries.