What Fracking Can Tell Us About the Future of Fusion

After a year like this one, she might have added “and stop us relying on the likes of Russia for energy once and for all.” Instead, she added: “and maintaining a nuclear deterrent without nuclear testing.” Because, apart from the unfortunately revived relevance of those words in 2022, that is what the NIF was set up to do after the end of underground testing of nuclear weapons. The achievement of “ignition” will doubtless inform continuing research into fusion energy, too, but the NIF’s technology wasn’t designed to that end. So-called tokamaks, like the (delayed) Iter project being built in France, operate differently and are viewed as a more likely path to commercial fusion energy becoming a reality.

We live in an era of energy breakthroughs that exist on a spectrum of varying degrees of reality. They are often hard to identify in real time. For example, in June 1998, an engineer working for Mitchell Energy & Development Corp. — now part of Devon Energy Corp. — successfully applied hydraulic fracturing to produce natural gas from a well in the Barnett shale basin near Dallas. That did not change things overnight; US gas production didn’t begin its resurgence for another decade, and the shale oil boom took several more years to get going. But in demonstrating that shale resources could be produced economically, it touched off a genuine revolution that upended energy markets, national economies and geopolitics. One small but topical example: The liquefied natural-gas tankers crossing the Atlantic today to help European countries cope with Russian gas cutoffs can trace their launch all the way back to the S.H. Griffin Estate No. 4 well in Texas.

There have been other energy breakthroughs in our lifetime. Australian scientist Martin Green’s innovative PERC cell architecture in the 1980s  improved the efficiency of solar panels significantly, making possible their eventual breakout from niche industrial applications to humdrum household rooftops.(1) Similarly, the development of the rechargeable lithium-ion battery by scientists at Exxon Mobil Corp. (!) in the 1970s paved the way for electric vehicles, grid-sized energy storage and the device on which you are most likely reading this.

As different as they are, these revolutions share some things in common. They represented engineering refinements of existing technologies and processes as opposed to the blinding flash we tend to think of. This does not take away from their genius; even the successful fusion ignition just witnessed resulted from endless iteration and will now inspire more of the same.

Rather, it is to emphasize that progress in energy tends to be iterative. Fracking had been around for decades before that fateful well; Soviet engineers had even tried doing it with nuclear weapons (reader, they were unsuccessful). Mitchell Energy’s dogged commitment to making it work — rather than inventing it per se — is now the stuff of legend in shale circles. Similarly, solar and battery breakthroughs reconfigured existing technologies with new designs and chemistries, yielding transformational results. Eventually.

That latency is another thing they share in common. All required a confluence of other factors to ascend to being true breakthroughs. The shale revolution required, among other things: sophisticated energy futures markets, perhaps somewhat less sophisticated investors willing to fund excessive drilling, an earlier bubble in gas-fired power plant construction and an existing ecosystem of US hydrocarbon production. Attempts to replicate fracking’s success elsewhere have been patchy, most notably in Europe, demonstrating that discovery is only part of the battle and not necessarily transferable. With solar and batteries, one could argue the advances made in materials only had the impact they did because of another “breakthrough”: Germany’s enactment of generous renewable energy subsidies from 2000 onward spurring Chinese manufacturers to scale up production and reduce costs drastically.

The last sudden energy breakthrough involving a genuinely new form was fusion’s little sibling, fission. Today’s hopes of abundant, cheap power from banging atomic nuclei together echo similar optimism about splitting them in the 1950s and 1960s. Yet here we are 65 years after the first commercial reactor switched on, still debating how much of a future this once-vaunted energy of the future truly has. Ironically, here in the US, the hopeful side of that debate centers on small modular reactors or, put another way, refinement of the existing technology.

If this all sounds like a bit of a downer heading into the new year, it shouldn’t. Consider that we have made great strides in extending access to reliable energy, using shale gas to replace coal-fired power — and constrain Moscow’s power — and deploying renewable sources at ever faster rates. Even if Tesla Inc. is closing out the year with its stock seemingly in free fall, electric vehicles are now the source of all growth in the global auto business. And all of this is happening less because of some quantum leap but instead reasonably steady progress on familiar fronts: manufacturing efficiency, financial backing, political will. There remains huge untapped potential in our existing technologies, be it redesigning electricity tariffs to encourage smarter consumption, upgrading building codes to require better insulation and heat pumps or — more advanced but quite feasible — utilizing the batteries in parked EVs as grid resources.

Besides fusion, there is great excitement around other transformational energy sources and related technologies, such as hydrogen and direct-air carbon capture. Hydrogen isn’t new, of course; rather, it is the concept of producing that gas without emissions and using it to replace coal and natural gas that has people excited. While hydrogen certainly looks as if it will be useful where electrification isn’t, such as in high-temperature industrial processes, the current hype looks overdone. For example, visions of fleets of specialized tankers shipping the stuff around the globe run into the reality of hydrogen’s inherent lightness — meaning lots of expensive voyages needed — as Bloomberg NEF founder Michael Liebreich lays out here.

One thing all these mooted silver bullets have in common is timing, with advocates expecting them to be the next big things by mid-century, coinciding with many countries’ net-zero emissions targets. Yet they are all competing essentially for the same thing. For example, if fusion power became cheap and ubiquitous, the addressable market for hydrogen and carbon capture of any kind shrinks enormously. Similarly, if carbon capture ends up working well and economically, just use natural gas, which is far easier than hydrogen to handle and transport.

Meanwhile, in the background, we’ll have been collectively tinkering with renewables, batteries and other iterations of all the existing clean tech for a few more decades. There’s a decent chance that some of the energy of tomorrow gets stranded the day it arrives.

More From Bloomberg Opinion:

• Fusion Cynics Reflect a Century of Genius and Hype: Stephen Mihm

• Chile Bets Big on the Hydrogen Revolution: Eduardo Porter

• How to Fund Climate Plans Amid a Currency Crisis: David Fickling

(1) PERC stands for Passivated Emitter and Rear Cell. This design improves the top and rear side of a silicon solar cell in order to keep electrons moving freely for longer, thereby generating electricity more efficiently.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Liam Denning is a Bloomberg Opinion columnist covering energy and commodities. A former investment banker, he was editor of the Wall Street Journal’s Heard on the Street column and a reporter for the Financial Times’s Lex column.

More stories like this are available on bloomberg.com/opinion