Jeremy Rifkin, founder of Washington-based think-tank the Foundation on Economic Trends, and author of The hydrogen economy, is convinced that the emergence of a new hydrogen-based energy regime will end global warming, debt in the developing world, and geo-political tension in the Middle East.

He told the Logistics Pilot Forum in Zaragoza, Spain, last week that the logistics industry had the mission and the duty to be an early adopter of the new energy, pressing manufacturers of ships, trains and road vehicles to offer hydrogen-powered products.

With an important international industry such as logistics in the vanguard, he said the technology required to extract hydrogen — he advocates using renewable energy such as solar power and bio fuels — would become affordable all over the world.

This would make global trade — in which currently only 25 per cent of the world’s population participates — available to all. And with energy available to all, tension over remaining oil resources would evaporate, he argued.

After the event, the Global Institute of Logistics asked Mr Rifkin how the logistics industry, which faces tight margins, could be expected to pay for this innovation.

He answered: “Governments will subsidise logistics companies in this. I’ve just come from a debate about the future of the German economy and I had this conversation with Chancellor Angela Merkel. So at least she’s listening.”

He said he believed there was every possibility that the European Commission could subsidise logistics service providers there to make the necessary changes to their energy consumption.

He called on the Global Institute of Logistics and other think tanks to help him take the argument to the commissioner in charge of transport, Jacques Barrot, and to the president of the European Commission, Jose Manuel Barroso.

During a recent visit to Finland, Mr Barrot said: “The continuous rise of the oil price is a powerful argument for reducing transport dependence on fossil fuels. Member states’ cooperation is needed to strengthen the energy efficiency of transport.”

Mr Rifkin said in Zaragoza that there were impressive developments in Japan and in California too.

He added: “The logistics industry can lead in this. And future generations will look back and say your industry in the twenty-first century made a very important contribution to reducing global warming, to reducing debt in the developing world, and to diffusing the geo-political tension in the Middle East.”

A full report of Mr Rifkin’s talk is available on the Global Institute of Logistics website.

We urge logistics professionals all over the world to share their opinions on this important matter. We would like your co-operation in presenting the argument to political leaders, as Mr Rifkin has urged.

Please send comments to stephentierney@globeinst.org.

Full Report 

This is the dawn of the third industrial revolution, and the logistics industry has the right, and the duty, to be at the forefront of it. That’s the view of Jeremy Rifkin.

Mr Rifkin is the founder of a Washington-based think-tank called the Foundation on Economic Trends (FOET), author of famous books including The end of work, and, more recently, The hydrogen economy, and a senior adviser to a string of high-ranking politicians, in Europe and the US.

At the heart of this new industrial revolution will be a new “energy regime”, based on hydrogen, and new means of communicating with each other to manage our energy resources.

The communications have been around for a decade or more: mobile phones, the internet, and so on. The new energy regime is around the corner, but Mr Rifkin feels that the sooner it comes the better, and that the logistics industry can help speed up its arrival.

He explains: “The great economic revolutions in history — the really great ones — happen when there are changes in energy regimes, and changes in the way we communicate to manage energy. They change the whole human equation for ever.”

Three positive results

In this new instance, there will be three hugely significant benefits from this change. A new energy regime, and a new way of using information technology to share energy will end global warming, end debt and inequality in the developing world, and end geo-political tension in the Middle East.

Hydrogen will allow anyone to carry a fuel cell around with them, generating and consuming energy as they go. It’s analogous to carrying a computer around today, generating and consuming information.

At the click of a mouse, you can instantly share the information you produce with billions of people.

Using the same software and the same hardware, combined with personal fuel cells powered by hydrogen, individuals and companies will become their own power plants. They will be able to send back to the grid any excess power they generate.
“We’re talking about reconfiguring every power grid in the world,” Mr Rifkin continues. “We’ll share power the way we share information. This will bring about the third industrial revolution and you will experience it first in logistics.”

The notion that every person, every truck, every freight train, every container ship could produce as well as consume energy by carrying around portable fuel cells raises eyebrows everywhere the FOET founder goes. But he warns that any observer of the situation in Japan, California and the European Union (especially Sweden) will already have begun to witness the change in mindset.

Besides, 50 years ago, not even those involved in the computer industry could imagine that we’d carry computers around with us, or even that we’d all own one. The then head of IBM was asked how many computers he thought the entire world market might require, and he put the number at four.

Revolutionary view

It’s the convergence of communications technology and new ways of generating power that produce industrial revolutions.

On the first occasion, the emergence of oil and steam power led to a new use of the printing press and the written word. Yes, the printing press had been around for some time, but when it began to be used to help manage the distribution of this new form of generating power, it flourished.

The same thing happened when the internal combustion engine powered the second industrial revolution at the start of the twentieth century. This only came about because the telegraph and the telephone were available to help manage the distribution of oil that prospectors had begun to discover in Texas and Oklahoma.

Mr Rifkin’s statement about these revolutions bringing about a change to the whole human equation seems irrefutable when you regard the impact oil has made on the world since then.

“The whole world runs by oil,” he says. “We are ‘oil people’. Plastics, which we use to build so many things, clothes, transport, hear — it’s all about oil. But this has led to three major problems: global warming, debt in the developing world, and increasing political tensions in the Middle East.”
Going into the first of these in more details, he quotes from an article that appeared in the journal Science in November 2005, calling it “the single most devastating piece of information” he has ever read.

Geologists carrying out research in Antarctica said they had discovered that the concentration of greenhouse gases was greater today than it had been at any other time in the history of the world. “We’ve made the greatest impact ever,” Mr Rifkin observes. “We have affected the chemistry of the planet.”

As for poverty in the developing world, he blames business schools for teaching the current generation of leaders in Africa and Latin America that they had to get oil at all costs. This has meant that, for 30 years, developing countries have borrowed more and more money from the International Monetary Fund to pay for oil, never knowing what the price of oil was going to be.

As the price has gone up, so the divide between the “possessed and the dispossessed” has become greater than ever, he insists. There are two billion people in the world who live on $2 a day, and one billion living on $1 a day. Two-thirds of the people in the world have never made a telephone call; one third has no access to electricity.

As for the Middle East, it’s worth pointing out that Mr Rifkin’s role as a policy advisor has given him deeper insight into the thinking of world leaders than most of us may have gleaned from listening to the news and reading our newspapers.

He believes the information that has come from former treasury secretary, Paul O’Neill, since he left his job in the White House is entirely plausible.

Mr O’Neill is said to have begun to become disillusioned after travelling to Africa in 2002 with rock star and anti-poverty campaigner Bono. He complained on his return that the US administration needed to do more alleviate suffering there and later called into question its policies in Iraq.

Mr Rifkin shares these concerns and says: “It’s a very dangerous geo-political game to play.”

Dwindling supplies

He also challenges the conventional wisdom on when oil supplies will run out.

The International Atomic Energy Agency predicts the peak will come in 2037. At that point, more than half of the world’s resources will be used up. “Then it’s over,” Mr Rifkin says, “because the prices will just become unaffordable. And when we peak, most of what remains will be in the Persian Gulf, so if we thank that’s a problem today, it could lean then to a third world war.”

But he’s seen reports from geologists who argue that the world could reach this peak as early as 2010, or in 2020 by the latest. “I’ve been back and forth between the pessimists and the optimists on this,” he explains, “until it hit me. It makes no difference. At most, it’s only a question of an extra 20 years at most and that’s irrelevant.”

In other words, an extra few years of oil makes little difference to the fact the whole world has to face up to a huge energy challenge.

Hydrogen is the way to go, Mr Rifkin feels. But the bad news with hydrogen is that you have to extract it, which in itself takes energy.

Some believe the best way to do this is to use fossil fuels to extract the hydrogen. This would be a retrograde step, the author of The hydrogen economy believes because this process would produce more greenhouse gases and we would fail to stop global warming.

He’s also against nuclear energy as a means of extracting hydrogen because, he claims, governments have never come entirely clean on the cost of nuclear energy, and says it would be too expensive for individuals or companies to run their fuel cells in this way.

Then there are the security questions that nuclear energy poses. He describes nuclear plants as soft targets for terrorists because four or five people with a handheld missile launcher and a sports utility vehicle could inflict serious damage on one, with obvious consequences for the wider community.

Green alternatives

There are alternatives to using fossil fuels and nuclear energy to extract the hydrogen we will need to run our power networks in future. But Mr Rifkin warns that they require patience, and a pioneering effort to bring initial costs down.

His idea is that countries, companies and individuals could use renewable energy from the sun, the wind, the waves, and plants to generate electricity, and use some or all of that electricity to electrolyse water and grab the hydrogen we need. The reason for grabbing the hydrogen, rather than relying on solar energy and so on for all our needs is that, with hydrogen, you have stored energy.

The sun does not always shine, the wind does not always blow, so the best solution is to take hydrogen and store it for later use.

He insists that the leaders in the logistics industry already understand that this new energy regime is within range. “If there are logistics operators that are not thinking about this, they’re already behind the curve,” he says.

California dreaming

Again, it pays to look at Japan and California to form a picture of how things are going to be.

California, the biggest single automotive market in the world, and, in its own right, the fourth biggest economy on earth, is planning to have 200 hydrogen fuel stations within the next four years.

In Japan, hydrogen as fuel is already the subject of huge public-private finance projects. And high-tech companies there are already developing individual fuel cell cartridges, with which people will use hydrogen to power laptops, phones and so on.

The automotive industry has already spent several billion dollars on hydrogen car developments. The State of California announced four years ago that, by 2009, new cars registered there would have to have zero emissions. Mr Rifkin relates that, at first, automotive manufacturers wanted to sue the state. But as it’s their single biggest market, they seem to have reached the conclusion that they should work with, rather than against the ruling.

California has since announced plans to enforce emission reductions on trucks that operate in logistics yards, including forklifts, and on the ocean-going ships that move in and out of its ports. It has estimated that air pollution from logistics operations contributes to 750 deaths in California every year.

The European Union is also working on an exit strategy from oil. Mr Rifkin himself raised the idea with the then president of the European Commission, Romano Prodi, in 2002.

Mission statement

In future, car manufacturers will sell us not just a vehicle, but a power plant.

Logistics service providers, running hundreds, or even thousands of trucks, can become major power producers, Mr Rifkin believes. There will still be room for energy companies and power and utility companies, of course. He believes the best move for logistics operators would be to establish partnerships with them.

He envisages hydrogen trucks that would show the world the future of transport. The benefits to logistics operators, struggling now to manage already high, and rising fuel prices, would be immense.

He adds: “There’s nowhere where this third industrial revolution will be more important than in logistics. But we need early adopters. A new energy regime means more than just a different way of dividing up the pie in this industry. It means baking a whole new pie, one that involves the developing world properly. A new energy regime will mean reglobalisation, this time from the bottom up.”

He points out that only 25 per cent of the world’s population is involved in what we call globalisation at the moment, the rest excluded from world trade largely because they have no power, literally — no energy, no fuel. With a fairer distribution of energy, the whole world can move goods around.

The logistics industry is about to see this revolution unfold, Mr Rifkin concludes. But it has a mission, an obligation to be an early adopter of the renewable fuel and hydrogen energy regime.

“The logistics industry can lead in this,” he says. “And future generations will look back and say your industry in the twenty-first century made a very important contribution to reducing global warming, to reducing debt in the developing world, and to diffusing the geo-political tension in the Middle East.”

Quite a mission indeed.