Seeing Green

1. How to Think About Energy

Thiel opens by reprising his four-quadrant framework: you can be optimistic or pessimistic about the future, and you can hold definite views or vague ones. A concrete plan beats an aspiration — 'I intend to get rich and famous' is a wish, not a strategy — and portfolio- or process-driven thinking is what people substitute when they have no specific picture of what comes next.

Winning without a plan is hitting the jackpot, and most people do not hit the jackpot.

The contrast with mid-century America is stark. Eisenhower's 1953 'Atoms for Peace' speech promised energy too cheap to meter, and people expected supersonic travel next. Today determinate optimism about energy is essentially dead: both U.S. parties push indeterminate portfolios, while China locks up resources and Europe economizes.

2. A Brief History of Energy

History shows a power law: at any moment one energy source dominates. Wood ruled the 19th century, coal the early 20th, oil from the 1930s and 40s onward, with natural gas lately displacing coal as number two. It would be a strange coincidence if several radically different technologies happened to be almost exactly equal in cost and effectiveness — yet that is precisely what portfolio thinking about energy assumes.

• China has overtaken the U.S. in total energy consumption, and its GDP and energy use have grown in lockstep at roughly 8% a year.
• The world burns about 85 million barrels of oil per day; the U.S. accounts for roughly 18 million of them.
• If China consumed per capita like America, it alone would need about 72 million barrels a day — close to all current world production.
• Oil demand is brutally inelastic: a 10% jump in demand can drive something like a 100% jump in price.

Peak oil is the sharpest version of the squeeze. In 1956 Shell geologist M. King Hubbert noticed that discoveries lead production by 20 to 30 years and predicted U.S. output would peak in the mid-1970s; he was dismissed, then proven right, and pricing power passed from the Texas Railroad Commission to OPEC. Thiel reads 2008 partly as an energy crisis — with oil at $140 a barrel, the only way to contain the price was to destroy economic activity — and he reminds the class that energy runs through two millennia of war, from West Virginia's coal in the Civil War to Churchill taking over Persian oil before WWI.

3. Why Cleantech 1.0 Failed

Cleantech investment surged past Internet investment during the 2000s, powered by a muddle: is the problem that carbon is wrecking the climate, or that oil is running out? The two diagnoses imply different cures — subsidize alternatives versus ration fossil fuels — and few people bothered to separate them. Against this backdrop Thiel lists ten things a startup must get right. Most cleantech companies got zero or one.

8 out of 10 is sort of a B-, and 5 of 10 earns you an F.

• Markets — pick one you can actually dominate
• Competition and mimesis — don't do what's fashionable
• Secrets — know something others don't
• Escape incrementalism — deliver a real step change
• Durability — still winning 20 to 30 years out
• Teams — engineers and builders, not just salesmen
• Distribution — a concrete way to deliver the product
• Timing — catch the wave, not the mirage
• Financing — need neither too little nor too much
• Luck — whatever remains after mastering the rest

1. 1

   Market framing

   Solyndra shipped over 1,000 systems totaling 100+ MW — 10.5% of the small U.S. solar market, under 1% of global solar, and a dot in the 15,000 GW world power market. Founders shrink the market to look dominant or inflate it to a trillion dollars; either way they fool themselves.

2. 2

   Fashion instead of secrets

   Solar was culturally fashionable, so crowds of near-identical startups fought over scraps. Thiel's verdict on 'doing well by doing good': serving two masters at once usually means serving neither.

3. 3

   Increments, not breakthroughs

   Solar, wind, and battery costs all fell only gradually — no step function anywhere. A venture that takes 10 to 15 years to build needs a big secret to escape competition, and cleantech had none.

4. 4

   Salesmen in charge

   Cleantech founders wore suits and ties while tech founders wore t-shirts — a tell. Sales-led leadership signals a product that needs heavy persuasion because it cannot speak for itself.

5. 5

   Distribution as afterthought

   A superb solar farm in the desert is worthless without transmission lines to the city. Even Obama's budget office knew permits for new power lines would take years — stimulus money deliberately skipped unconnectable projects.

6. 6

   Timing and financing

   The cleantech wave was forever four to five years away, and capital needs were extreme: Solyndra absorbed $1.65 billion in late-stage money. Thiel's heuristic: be wary of any company that needs less than $1 million or more than $1 billion.

4. The Post-mortem: Ask the Engineering Question

When Solyndra collapsed, Republicans hunted for scandal and Democrats defended the integrity of the loan process. Nobody asked the substantive question: did the technology actually work? That is the tell of an indeterminate culture — it asks legal and financial process questions where a determinate culture would ask engineering questions. A determinate president could have named the two or three technologies the country would seriously pursue; since that was politically impossible, the administration was left defending process, a fight it could not win.

• Inspiration versus incrementalism — cleantech executed increments competently, but conventional increments carry no secret
• Complex coordination — fitting a technology into the grid, regulation, and society was treated as somebody else's job, i.e. left to luck
• Breakthrough technology — for the most part, nobody even tried

The Internet comparison is blunt: a web startup can succeed almost without talking to anyone, but energy is the opposite — a coordination-heavy business where the grid, regulators, utilities, and customers all have to move together.

5. Energy Futures: Software and the Thorium Secret

In one sense the best cleantech companies have been Internet companies: eBay is a giant recycling operation, Amazon reduces sprawl, and smart thermostats, demand-shifting software, and eventually self-driving cars squeeze real waste out of the system. But conservation alone cannot win — American savings get canceled as the developing world catches up; when every household in Uttar Pradesh gets a refrigerator, our smaller fridges wash out. So the old question returns: can energy actually become too cheap to meter?

Thiel's candidate secret is thorium. In the 1940s the government weighed three fissile elements — plutonium, uranium, and thorium — and dropped thorium precisely because it cannot be weaponized. The priority was bombs, not power, so an entire branch of nuclear engineering was politically orphaned. Decades of neglect for non-technical reasons is exactly what makes a secret.

• Abundant: enough for on the order of a million years at current consumption
• Clean: uranium reactors burn only about 0.7% of their fuel; a thorium cycle consumes far more of it with far less waste
• Safe: no runaway chain reaction, and no need for vessels holding hundreds of atmospheres of pressure
• Cheap: roughly an order of magnitude better — think a $250 million plant versus $1.1 billion for uranium

Run thorium through the ten-point checklist and it starts with roughly six boxes already checked: it is unfashionable, secret, non-incremental, durable, well timed, and financeable in staged milestones. What remains is the hard human work — defining the market, recruiting nuclear engineers, and coordinating distribution and regulation. Solve those, and you have done everything possible to put mastery ahead of luck.

6. The Government Question

There are only three molds for a technology company's relationship with government: sell to it, take subsidies from it, or replace it. Venture capitalists dislike all three — subsidy dependence most of all. And the macro picture makes subsidies a wasting asset: the U.S. deficit runs near 10% of GDP with no credible plan to close it, a secret hidden in plain sight because nobody knows what to do about it. Whatever the future holds, there will be less free money.

The conclusion sends cleantech back to the quadrant where the Internet lives: determinate optimism. The classic definition of technology is doing more with less — so name the breakthrough, then improve it relentlessly. A decade of good intentions produced failure; twenty years from now, John Doerr should be able to tell his daughter that actual progress was made.

The first step, as usual, is to think big and think boldly about the future.

Then vs. now (2026)

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