Sustainability and energy transitions in economic and business history

Session organizer/s: Mattias Näsman and Josef Taalbi

The Business of Renewable Energy Development: The Oil Industry and Geothermal Energy in Iceland and California, 1960s-1970s

Session: 2

Authors: Odinn Melsted

Co-authors: NA

Abstract: Renewable energy systems are often thought of as alternatives to fossil fuels. A historical view, however, reveals that different energy systems tend to co-evolve, with incumbent energy constellations shaping the emerging ones. In this paper, I will examine the role of established fossil fuel business constellations in the development of renewable alternatives by looking at the case of oil and geothermal energy in Iceland and California, which both became leaders in geothermal heating and power development in the 1960s and 1970s. While fundamentally different in end use, geothermal and hydrocarbon industries employ similar methods for exploring and extracting fluids and gases out of the earth. Those similarities induced oil companies to enter the geothermal business, and geothermal pioneers to seek cooperations with the oil industry, whereas the business models and practices of oil and geothermal development were deeply intertwined. The volcanically active region of Greater California (U.S. and Mexico), with power plant complexes at The Geysers, Imperial Valley and Cerro Prieto, became a hot spot for geothermal development in the 1960s and still holds one fourth of the world’s geothermal power capacity. Those projects were largely implemented by oil companies – Pure Oil, Union Oil and Chevron – which set up geothermal divisions and acquired start-ups. Oil companies provided the necessary funding for high-risk exploration drilling and applied their expertise to explore and exploit geothermal energy with geoscientific exploration techniques, oilwell rotary drilling and reservoir engineering. Around the same time, Iceland became a leader in geothermal use, as public utility companies built geothermal power plants and district heating utilities all around the island. As a result, geothermal energy provides for the heating of 9 out of 10 houses and almost one-third of the electricity supply today. Unlike California, Iceland never had an oil industry. Even so, petroleum technologies and geoscientific expertise were crucial to Iceland’s transition from oil to geothermal energy, as exploration and exploitation methods were learned from the oil industry. In both cases, the businesses of oil and geothermal energy have been deeply intertwined, not only via expertise and technologies, but also via business models and practices. In California, oil companies sold steam to electric utilities at prices linked to fossil fuels, which made the geothermal business highly profitable in the 1970s. Similar to oil companies, Icelandic geothermal companies employed the business model of charging geothermal tariffs linked to oil prices, which guaranteed a return on investment and allowed to pay off drilling and infrastructure loans. Based on archival research in the U.S. and Iceland, and employing the concepts of socio-technical systems and “oil spillovers”, I adopt a comparative perspective on Iceland and California. As I will argue, we need to look beyond single energy carriers and examine the co-evolution of historical energy systems. My case studies reveal the links and hybridization between fossil fuels and renewables, or oil and renewable energy businesses, and complicate standard notions of energy transitions from one energy carrier to another.

The current energy crisis in historical perspective

Session: 2

Authors: Astrid Kander

Co-authors: NA

Abstract: The energy crisis of 2022 has several similarities to the oil crises of the 1970s, but there are also differences. This paper takes a very long perspective on the situation where EU tries to free itself from fossil fuels to save the climate, and at the same time urgently stand united in the energy war that Putin has inflicted on EU. We will discuss historical and contemporary limitations of areal energy resources, as well as the inflation and interest increases, which will possibly lead to stagflation (like in the 1970s), and the impact on energy markets as well as stock exchange markets. Last we will briefly touch upon whether this energy crisis will make move EU faster in achieving its renewable energy transition.

The Swedish Automobile Industry and the Environment during the Oil Crisis: The present-day environmental transition in perspective

Session: 2

Authors: Mattias Näsman

Co-authors: NA

Abstract: The climate crisis and other environmental problems pose major challenges to contemporary societies, even existential risks. Effective mitigation of climate change as well as other environmental problems will require transformations of social and technological (socio-technical) systems (Khöler et al 2019). While scholarship in various social scientific disciplines including economic and environmental history as well as the history of technology have began studying the drivers, challenges and complexities relating to environmental and energy transitions, business history has thus far overlooked these topics (e.g. Taalbi 2019, Van der Vleuten 2020, Miller and Warde 2019). This proposed paper has a dual purpose: it proposes a transition research agenda for business history research while providing a case study of the Swedish car industry’s political activities during the energy crisis, aiming at delaying regulatory driven environmental adaption of passenger cars. Business history scholarship have a lot to offer in understanding present-day transitions, not least regarding the role of big business in shaping the rules governing the transition (Bergquist and David 2022) and the role of incumbent industries in directing investments deciding future “sustainable” technologies and their development (Newell, Geels and Sovacool 2022). I believe that an exploration of the Swedish automobile industry’s political activities during the oil crises are particularly illuminating for this purpose. The target period bears many similarities with the present, where Western political and business systems were facing ‘polycrisis’ – multiple crises spanning the environment, the breakdown of the Fordist production regime, as well as crises in energy, economic and monetary systems (Zeitlin, Nicoli and Laffan 2019). The paper shows that Swedish carmakers Volvo and Saab, despite being global leaders in complying with stringent emission standards on the US market, heavily objected to implementing stringent emission requirements and introducing advanced emission control technologies in Sweden, while showing how these objections related to crises in the European economy. The paper draws from state archives as well as the library of the Swedish Automobile Industry Association (Bilindustriföreningen) to highlight how the Swedish industry employed several different strategies to exercise power in order to convince or force the, in a European context, very proactive Swedish government to lessen its ambitions on exhaust emission control regulation. Thus, the paper aims at contributing to scholarly debates regarding power in governing transitions while aiming to shed historical light on the present transition of the vehicle fleet toward zero emission vehicles.

ANDEANS VS NORDIC. ENERGY AS A DETERMINING FACTOR. 1870-1930

Session: 3

Authors: Cristián Ducoing

Co-authors: Martin Garrido

Abstract: There are numerous differences that explain the economic trajectory of Nordic and Andean countries (Ducoing & Peres-Cajías, 2021; Ducoing et. al., 2018). However, one difference that has not received enough attention is energy. During the 19th century and first decades of the 20th century, traditional energy reserves in the form of firewood were abundant in Nordic countries. In contrast, in Chile, Bolivia and Peru these reserves were not only scarce but also depleted by mid-19th century due to intensive mining activities. The availability of firewood allowed Nordic countries to develop early industries that were intensive in natural resources. On the other hand, depletion of firewood reserves in Andean countries would have limited them to depend on mineral coal for their industrialization. This article argues that availability of firewood was a necessary condition for industrial takeoff during 19th century and Nordic countries had advantages in their endowment of natural resources compared to Andean countries which could lead to significant differences in their early economic development.

Shades of Green in the Swedish Forest-Based Bioeconomy Transition

Session: 3

Authors: Philipp Jonas Kreutzer

Co-authors: NA

Abstract: The Swedish forestry sector is positioning itself at the forefront of the transition to a bioeconomy both nationally and internationally. The bioeconomy implies the replacements of fossil-based inputs with inputs from biological sources, but the suggested transition goes deeper than input substitution. It requires novel configurations of economic structures and processes.

A contested debate between different visions of future bioeconomies has emerged in related policy, industry, and scholarly arenas. Previous discourse analysis has shown that the debate is dominated by economic visions centered around bioresources and biotechnology.

However, there is a lack of research on which direction the transition to a bioeconomy is actually taking. To address this gap, this paper uses trade journal articles about significant Swedish innovations found in the SWINNO database. The paper maps each innovation related to the forest sector between 1970 and 2020 to the bioeconomy visions it aims to realize. This mapping is based on innovation biographies from the trade journals and previous definitions of each bioeconomy vision.

Conceptualizing innovation as embedded ideas sheds light on the actual direction the search for bioeconomy transition pathways is taking, moving beyond statements of intent. Qualitatively labeling innovation data with bioeconomy visions allows us to advance the bioeconomy debate by making lock-ins into single visions testable and examining trade-offs as well as potential synergies between innovation aimed at different visions.

The bioeconomy case study further highlights the importance and challenge of analyzing innovation in the context of sustainability transitions beyond efficiency gains or pollution reductions.

The Swedish innovation system for sustainable transitions – Insights from innovation output data

Session: 3

Authors: Josef Taalbi

Co-authors: Philipp Jonas Kreutzer

Abstract: This study makes use of historical emission statistics and a database on Swedish innovations, 1970-2019 to investigate the historical evolution and current state of Sweden’s innovation system for environmental sustainability. Departing from environmental innovations identified in the database, we identify trends in innovation and technology-driven CO2 abatement across industries. Moreover, we use innovation networks and Input-Output analysis to trace the influence of systemic network stimulus for innovation and abatement outcomes. The results suggest that technological innovation has had an important role to play in CO2 emissions reduction, and that there has been an intensified rate of environmental innovation from the 1970s, and in recent years. The results point to the automotive and pulp and paper industries as leaders in environmental innovation and CO2 emissions abatement, while the Swedish innovations system for sustainability also has significant bottlenecks in parts of the transportation sector.

Is public energy innovation funding in line with Swedish environmental targets?

Session: 4

Authors: Johanna Fink

Co-authors: Josef Taalbi

Abstract: The current energy crisis has directed public attention towards energy policy and energy innovation. Despite rising research interest, energy innovation policy evaluation is impeded by the lack of a long-run data set that links energy innovations to public funding data and contains information on the directionality of innovation. This paper will contribute to the debate around energy innovation policy research by presenting a novel long-term data set, linking significant Swedish innovations to public innovation funding between 1970 and 2021. The preliminary results indicate that interest in energy innovations is positively correlated with energy prices. Until the 2000s energy innovations were primarily concerned with improvements in fossil fuel technology rather than the development of renewable energy technologies. Only since the 2000s renewable energy innovation dominated in Sweden. Moreover, Swedish data confirms that public funding is important for the development of energy innovations especially for immature technologies. Energy innovation are 17% more likely to receive public funding compared to innovations from other fields. Furthermore, public institutions financed 15% more renewable energy innovations compared to private actors before the new renewables became competitive with conventional energy sources.

Perceived Resources for Battery Manufacturing in Norway

Session: 4

Authors: Øyvind H. Nordbotten

Co-authors: Øyvind H. Nordbotten

Abstract: This work sets out to analyze what resources that were and are available for battery produc-tion in Norway by using FREYR Battery as an example. However, since the company has no production in place, the goal of the article will be to investigate the perceived resources of the company, as perceived by founders, management and investors, while also discussing the po-tential of those resources. To do so, the article will examine how the founders, management, new owners, investors and customers have perceived and understood the resources, and how this, in turn, has been presented to the investment market. It is outside this article’s scope to make definitive conclusions on the future effectiveness of the perceived resources because situations change with time, and the quality of a resource is contextually bound. Nonetheless, an analysis of what conditions for the battery industry are present, or perceived to be, is interesting as it can also shed light on whether the creation of the company is ce-mented mostly in the possibility for profits or genuine green concerns How resources are found and perceived is ingrained in entrepreneurial efforts and an important part of the crea-tion of new ventures. Which advantages are, or perceived to be, present for the creation of FREYR, how is the company’s resource basis presented outside the company, and how has the resource basis initially influenced the company strategy? The involvement and backing of the Norwegian state through Eksfin to FREYR Bat-tery, a resource in itself, could also be an indicator of the perceived resources for the battery industry. Rationally, the state only supports industries and companies if there are sound con-ditions and good advantages available, or important strategic value for national interests

The Little Ice Age energy transition

Session: 4

Authors: John brolin

Co-authors: NA

Abstract: Climate warming and other consequences of fossil fuel emissions has recently elevated the industrial revolution to the status of a geological event or epoch as the anthropocene. Looking for causes rather than consequences, this article proposes to see the fossil energy transition as a homeostatic response to climate cooling. Historical interest in the energy transition is commonly derivative from attempts to interpret the industrial revolution, but the fact remains that the English energy transition to coal was driven by domestic heating. Leading interpretations see it as arising from a population-resource crisis or from rapid commercialisation starting in the late 16th century that led to the introduction of chimneys (the characteristic feature proposed for the coal-burning house). However, chimneys had been a feature of urban life for centuries, and since population pressure and urbanisation were as great around 1300 as in 1550–1600, some additional factor must be at work. Estimating and comparing the heating degree days and growing degree days between these dates, based on historical temperature measurements and recent climate reconstructions for the British Isles, I propose that this factor was climate cooling. Climate affected both the demand and supply blades of the degree-day scissors. The estimated rise in heating degree days is comparable to replacing one month of summer (with no heating) with one month of winter (with maximal heating), while the decline in growing degree days similarly shortened the growing season for London’s supply area, weather only of fuel (Allen) or energy in general including food and feed (Malanima). Thus, while the immediate causes prompting the transition in the late 16th century may have been a general or, more likely, local population-resource crisis and/or rapid commercialisation, the long-term temperature decline between 1300 and 1600 meant that more domestic heating was needed to maintain thermal comfort at the later date, indeed, occasioning the very ‘invention of comfort’ (Crowley) itself. Over the even longer run, the combination of settled agriculture and waning interglacial temperatures made this invention almost inevitable at some time and place – historically it happened with the fossil energy transition in early modern England.