For me, any trip to London always includes a visit to the Portobello Road antiques market. It’s a great place to rummage for historic ephemera, such as old magazine articles that portend strategic lessons for leaders following today’s energy trends.
Here’s an example: “In view of the immense resources of Canada, now being so rapidly developed, it is satisfactory to see a corresponding degree of Canadian enterprise competing for a share of the ocean traffic.”
A fitting comment from the British Empire, I thought. The juxtaposition of this 130-year-old quote against Canada’s current desire to float oil into global markets prompted me to exchange a £20 note for the brittle piece of newsprint.
But it was more than the quote that intrigued me about this fragment of lost Canadiana. What caught my eye was the colourful picture mated with the article (see Figure 1) illustrating the SS Lake Champlain, a steaming sail ship built in Glasgow in 1874 to “provide a vessel specially adapted for the Canadian trade, and strong enough to withstand the roughest storms of the Atlantic.” Commissioned by the Canada Shipping Company of Montreal, the Lake Champlain was the “first steamer built on the Clyde sailing under the new Dominion flag.”
Steaming sail ships like the Lake Champlain harnessed primary energy from both coal and wind. In function, these vessels were like the hybrid vehicles of the 19th century. Such cross-bred ships were common, because the transition from graceful, wind-powered Barques and Schooners to sooty coal-fired steamships was not abrupt. Ocean-going vessels hosted these dual-fuel systems for many decades before masts and sails were fully blown away by coal in the late 1800s. But why did the transition to coal take so long?
Two reasons: A lack of range and refueling infrastructure for coal-fired steam engines. Early steamships couldn’t carry enough coal to make a transoceanic voyage, and even if they could, there was no guarantee that there would be a coal terminal to refuel at the port of arrival. Eventually, a global refueling infrastructure for coal was built. Leading the way was the British Empire with far-flung ports in places like Hong Kong, Singapore, Bombay, South Africa and Canada. Over time steam engines became more powerful and efficient, allowing for longer voyages.
Once range and refueling became a non-issue, coal took over from wind because of compelling advantages: faster propulsion, more direct ocean routing and all-weather operations.
The SS Lake Champlain offers food for thought for those watching today’s germinating trend of plug-in hybrid electric vehicles (PHEVs) and pure battery electric vehicles (BEVs) (see Figure 2). Both types of plug-in vehicles are showing noticeable sales growth in the U.S. market, though collective volumes are still small at 11,000 units per month (about 0.81 per cent of all cars bought in June, 2014).
Like a steaming sail ship a plug-in gasoline car hosts a redundant energy system for backup. The major reasons for not shedding gasoline engines today and going pure battery electric are the same as for steaming sail ships from two centuries ago: range, refueling and high initial costs.
Yet one of the lessons of the SS Champlain is that hybrids are transitional. Once electric recharging infrastructure is established, pure battery electric vehicles could pick up more momentum. Automakers like Tesla, Nissan and BMW are building ‘supercharger stations’ in strategic locations – somewhat analogous to the coal refueling depots of the British Empire. This is a trend to watch carefully as more automakers are likely to follow suit.
The nascent plug-in vehicle trend – PHEV and BEV – is a business challenge to the dominance of the oil industry in the transportation market. Lake Champlain reminds us that there are precedents for big swings in the market share of primary energy. Coal took the wind out of wind’s sails in the 19th century. And in the early 20th century, coal lost the marine and rail transportation markets to oil-based diesel and gasoline. Do PHEVs and BEVs signal another transition in the making?
Today, electrical power generation is still dominantly generated by coal, a domain it has long held. Renewables like wind are making significant inroads into the power market too. Looking at the SS Champlain, it feels like coal and wind want some of their market share back.
Peter Tertzakian is chief energy economist at ARC Financial Corp. in Calgary and the author of two best-selling books, A Thousand Barrels a Second and The End of Energy Obesity.