Two Global Energy Systems, or One Big Blind Spot?

In this edition of Sustainability Decoded, Dr. Wesley Herche is joined by co-author Dr. Gary Dirks, Distinguished Global Futures Scientist and Director of LightWorks® at Arizona State University's Global Futures Laboratory, and the Julie Wrigley Chair of Sustainable Practices. Before joining ASU, Dr. Dirks served as President of BP Asia-Pacific.

See this article and many more at https://www.sustainabilitydecoded.com/

People talk about energy the way they talk about shipping or agriculture. One sector among many. A slice of the economy.

That is a mistake.

Every molecule traded on global commodity markets is extracted, refined, manufactured, packaged, shipped and delivered into the hands of a consumer, all because of energy. Every model trained, every query answered, every data center cooled, every chip fabricated for the AI infrastructure now capturing the world's attention runs on energy. Every calorie of food grown, processed, and delivered to a table; every tonne of steel; every kilometer of freight. Strip energy out of the global economy and you do not have a smaller economy. You have no economy at all. GDP is not powered by energy. GDP is energy, expressed as the sum of everything humans make and move and compute and build and grow.

This distinction matters because what is happening in global energy right now is not a sectoral shift. It is something far older and far larger than that.

Hominids have used fire for at least 400,000 years, but only harnessed it for mechanical work in the last few centuries. Three hundred years ago, a person typically lived and died less than 50 kilometers from where they were born, and spent up to a full day beating their clothes on river rocks to loosen the sweat and dirt. By 1969 more than half a billion people turned on a broadcast television to watch a human delivered by a kerosene rocket step onto the moon. The pace presses your head to the back of the seat, and somehow it's now getting faster still. For the first time in human history, a scalable alternative to combustion exists.

It's a different logic entirely: capture ambient energy flows, convert directly to electrons, move electrons. No burning. No geological time required. Daan Walter, strategist at energy think tank Ember, coined the term for it. In their landmark publication "The Electrotech Revolution," Walter and his colleagues wrote: "Humanity is graduating from burning fossil commodities to harnessing manufactured technologies — from hunting scarce fossils to farming the inexhaustible sun, from consuming Earth's resources to merely borrowing them."

Not a more powerful form of combustion. The emergence of an entirely distinct system of energy logic, built on electrons rather than combustion, on ambient flows rather than stored carbon bonds, on technology manufacturing cost curves and zero-cost fuel rather than geologic deposit extraction: electrotech.

And yet, in the most profound sense, it is not new at all. Capturing energy directly from the sun in real time, converting ambient flows into usable power, is exactly what life on Earth figured out 2.5 billion years ago. That one single trick has made plants the dominant form of life on Earth ever since. Photosynthesis was the original electrotech. We are not inventing something unprecedented. We are, for the first time, doing what plants have always done. With one difference: modern solar panels are now twenty times more efficient than photosynthesis.

Here is where the circle closes. That same plant life, the ones that spent hundreds of millions of years capturing solar energy, storing it in organic matter, dying and compressing under geological pressure, became the dense carbon molecules we eventually learned to extract and burn. Petroleum is not 200 years old. It is 300 million years old. The Industrial Revolution did not create a new energy logic. It found the warehouse that photosynthesis spent hundreds of millions of years filling, and figured out how to open the door. Both systems are just the sun. One accesses it in real time. The other withdrew from a savings account that took an incomprehensibly long time to fill.

Tapping that geologic savings account changed everything. Harnessing fire and our own muscle power was already enough to take us from the earliest hominids living in small kin groups, before tribes even existed, to hunter-gatherer bands, to the first cities and civilizations, to intercontinental empires. But taking humanity's most transformative tool, controlled combustion, and combining it with these fossilized fuels catapulted us into the modern world. It drove the Industrial Revolution. It enabled the sanitation infrastructure that collapsed child mortality. It powered the agricultural systems that ended famine at scale. It connected continents. That's real. That happened.

But the greenhouse gases it released into the atmosphere is also real, and the consequences are serious. Both things are true simultaneously, and pretending otherwise helps no one. The atmospheric record is unambiguous on this point, even if the policy response remains contested.

We want to pause here and name something directly. The energy system built on that warehouse does not have a term that captures what it actually is. "Fossil fuels" describes the raw material. "Hydrocarbons" is a chemistry term. "Oil and gas" is a commodity category. None of them describe the full system: the extraction, the refining, the combustion, the infrastructure, the chemical derivatives, the geopolitics, the 400,000 years of the human relationship with burning things. We need a term that sits at the same level of abstraction as the concept it is being set against.

We introduce it here: petrotech. From the Greek petra, meaning rock. The energy system built on releasing what is stored in stone. We use it not as a pejorative, and not as a eulogy, but as a precise descriptor for a complete system of energy logic that has no adequate name in current discourse. It will need one for what follows to make sense.

Petrotech's uncontested advantages are not in daily power generation, and increasingly not in transport either; it's in the jobs nothing else can currently do. Liquid hydrocarbons are energy in waiting. Park a tanker for months, park reserves underground for decades, deploy exactly when and where needed. The same molecules become plastics, fertilizers, pharmaceuticals, synthetic fibers, lubricants, and asphalt. Electrification has no answer for most of these.

There is arguably a third category worth considering before we go further. Most of the time, heat is an unwanted byproduct of energy conversion, the waste that engines and generators shed into the atmosphere. But sometimes heat is the useful energy service itself, warming a building, a body, an industrial process. Nuclear, geothermal, long-duration thermal storage, and a patchwork of other technologies scattered across the energy landscape can provide heat for various uses. And unlike what we've called here petrotech, these technologies can do it without combustion.

But they are not electrotech either. Electrotech's disruptive power comes from modular manufacturing, site independence, and learning curves that drive costs down with every doubling of deployment.

For many decades, nuclear has run a "negative learning curve". Inflation adjusted, nuclear is now three times more expensive per delivered megawatt-hour and six times more expensive to build than it was in 1970. But where strong government backing and industrial policy can absorb the capital requirements, the economics could look different.

Modularization of nuclear, next-gen geothermal, and long-duration thermal storage are also showing promise. If these technologies can unlock new scale, they may grow in prominence for the future energy mix.

But for now, petrotech has shaped the modern world for over 300 years, and electrotech is scaling faster than any energy technology in history.

The standard framing of the global energy debate treats petrotech versus electrotech as a moral contest. Two armies. Pick your side. This framing is not just unhelpful. It actively prevents understanding. Because these are not mirrors of each other. They are different systems built to do different jobs.

Different systems. Different jobs. Different strengths. Different failure modes.

The destination is not in dispute. We have faith that humanity will eventually deliver all the energy services people need to thrive, without the negative externalities. The only question worth debating is how to optimize the path to get there.

Nuance is not the same as indecision. Understanding both systems with precision is not a failure to pick a side. It is a refusal to let the wrong question determine the answer. If this reads like a both-sides argument, read it again. “Both-sides” arguments avoid conclusions. This one is building toward one.

Asking better fundamental questions is exactly what Clayton Christensen built his career on. Two concepts define his legacy as one of the greatest business thinkers of our time: The Innovator's Dilemma, which explains why well-managed companies lose to inferior upstarts, and Jobs to Be Done, which reframes every market question around what the customer is actually trying to accomplish. As Christensen told it, the transistor radio is where both ideas collide. Sony did not try to out-engineer RCA. They asked a different question entirely: what does a teenager at the beach, away from parents and power outlets, actually need? Not fidelity. Freedom. RCA and Zenith, answering the wrong question with extraordinary precision, never saw it coming as Sony ate their market from the bottom up.

Steel mini-mills disrupted one of the oldest and most capital-intensive industries on earth. Scrap metal and electricity as inputs. Rebar as output. Low grade, inconsistent, quality forever hidden inside concrete. Mini-mills entered the steel market at the absolute bottom, and the integrated mills, blast furnaces, coal, iron ore, decades of capital, looked down and saw nothing worth defending. They were happy to let low-margin, unattractive rebar go. Good riddance. Then mini-mills took wire rod. Then angle iron. Then structural beams. Then flat-rolled sheet.

Mini-mills have now claimed nearly a third of global steel production. The evidence that this trend will continue is already on the table. But as William Gibson said, "The future is already here; it's just not evenly distributed."

The United States is furthest along, with 72% of steel now coming from electric arc furnaces. China is a different story. It produces 54% of the world's steel and still runs 90% of it through blast furnaces. But since 2024, not a single new blast furnace project has been approved there. Every permit issued has been for electric arc furnaces. They already did this with aluminum, subsequently moving smelters out of coal-heavy northern provinces into renewable-rich Yunnan, Sichuan, and Inner Mongolia, province by province, tonne by tonne. Not ideology. Physics and economics. And 93% of all newly announced steelmaking capacity globally now uses electric arc technology.

The managers of those remaining blast furnace operations were not making bad decisions when they ceded market segment after market segment. Their boards were probably delighted. The challenge they were solving for was margin preservation, not market share. They are structurally handcuffed to a system that rewards the behavior that makes their disruption inevitable. Are you certain you wouldn't do the same?

Even the thorniest debates crack open when you ask a better question. Take the decades-long argument over whether natural gas is a transition fuel.

The framing went like this: fossil fuels are hell, renewables are heaven, so maybe methane is the pragmatic purgatory you have to slog through in the meantime. A sensible bridge say some; a devil's bargain say others. Serious and well-meaning people argued either side for years. Among those who rejected the "transition fuel" framing was Michael Liebreich, founder of Bloomberg New Energy Finance and host of the podcast Cleaning Up. He was right to push back. But the biggest flaw was not in any of the answers, rather the question.

Liebreich's more recent work, developed with Anders Lindberg of Wärtsilä, asks an entirely new question: What specific job does a small amount of flexible gas do that nothing else can currently do, and how does that unlock a generation system that is drastically cleaner, and more cost effective.

The reframe is precise. Electrotech (wind, solar, batteries) are already the cheapest form of energy on the planet. Once you pay the front-loaded capital cost, the fuel is free; it will never fluctuate on a commodity exchange, be withheld by a sanctioning regime, or spike in response to a wartime chokepoint closure. The system looks nearly perfect until you hit the Dunkelflaute, a borrowed word from German that describes those extended periods of days or weeks where the sun isn't shining, the wind isn't blowing, and you've run out of battery storage. It's a reminder that the delivered cost of a renewable system includes storage, grid upgrades, and backup, not just the generation asset itself. And that one problem has been incessant enough to keep fossil generation entrenched.

Petrotech's greatest strength is energy that sits indefinitely and deploys quickly on demand. Since that is the one specific job natural gas does better than anything else right now, why not optimize it for that and stop asking it to do everything else? A small fleet of highly flexible open-cycle turbines or reciprocating engines, sitting mostly idle but ready to fire during those rare multi-week confluences, solves the problem without locking in more costly infrastructure everywhere else.

As Liebreich put it:

Ask that question instead of the old one, and the preceding decades of debate might look more like a category error. One certainty remains: hydrocarbons are a finite resource that took hundreds of millions of years to create. We should take that seriously.

Charlie Munger took it seriously, and he was one of the most effective capital allocators of the 20th century. He was also, by his own account, skeptical that climate change would be as severe as the scientific consensus projected. Neither of those facts should stop anyone from reading what he actually said about petroleum.

Munger is making a jobs-to-be-done argument, even if he never framed it that way. The job petroleum does as a combustion fuel is now contestable. The job it does as feedstock for fertilizers, pharmaceuticals, and synthetic materials is not. Burning a barrel that could have become a cancer drug or a nitrogen fertilizer feeding a billion people is not a resource strategy. It is a failure to ask what job this molecule is actually best suited for.

The energy transition is not a move to a new destination, it's a reconfiguration. It's using your best available LEGO bricks to rebuild the house while we are still living in it. You don't demolish the structure either. You continuously swap pieces and rebuild. Some pieces get used more in the new configuration. Some get used less. Some get prioritized for functions they were always better suited for.

The petrotech pieces are not likely to vanish any time soon. The feedstock value is not contestable. The dispatchability is not contestable. The strategic reserve function is not contestable. What is changing is which jobs electrotech now does better.

The need for a better toolkit hits hardest when bills keep rising and the grid chronically goes dark without warning. Faced with this problem, between 2022-2025 Pakistan installed over 25 gigawatts of solar capacity; more than all its coal, gas, and nuclear generation combined. Not centralized, massive solar farms, those only accounted for ~4%. Five gigawatts was developed under their official net-metering program. Another nearly 20 gigawatts was DIY-built across more than one million homes and small businesses. The installation knowledge spread through TikTok tutorials and WhatsApp group chats. By early 2026, the country avoided over $12 billion in fossil fuel imports. When the Strait of Hormuz closed, the solar roof overhead did not.

This is not a one-off story. A 2021 report from the Center on Global Energy Policy at Columbia University noted that since 1984, the amount of oil consumed per dollar of global GDP has declined every single year; through oil shocks, price collapses, recessions, booms, wars, and a pandemic. The authors found it wasn't primarily driven by price signals or policy. It was structural. As economies matured, oil migrated out of power plants and factories where you can swap fuels, and into cars and boilers where the appliance locks in the fuel and efficiency improvements accumulate quietly over decades. Reconfiguration doesn't announce itself, and it's not a new phenomenon.

The low-end energy jobs in power generation, light-duty transport, and residential heat are being reconfigured via a different system, one segment at a time. Petrotech's high-value jobs are likely to remain for some time. Jet fuel. Petrochemicals. Grid backup. Strategic reserves.

For most of human history, the global energy system was never designed. It was inherited. Fire came first, then combustion at scale, then the infrastructure that defaulted to that system. We also inherited the mental models and gaps that came with it. Those blind spots persist whenever we're still asking which system "wins", instead of asking which jobs each system actually does.

For the first time, we have both the conceptual vocabulary and the physical tools to consciously design the global energy system rather than simply inherit the next version of it. Petrotech and electrotech are just two sets of building blocks, not two sides of a debate. The question is which blocks belong where.

That is a design problem. And unlike ideological shouting matches, design problems have solutions.

—Gary and Wes