Soaring oil and gas prices —“Trump’s Carbon Tax”—accelerates the energy transition. How slow ships, narrow straits and “just in time inventory” lead to chronic supply shocks. Taking a page from Buckminster Fuller and inventing a better model (and a better model car). Negamatts! How the combination of the energy transition and the materials transition leads to transformation.
Donald Trump has managed to break the two-century-old grip of fossil fuel on the human imagination. As he explained to the GOP House caucus last month, “no other president can do some of the shit I’m doing.”
— Bill McKibbben, Oil and Gas=Peril and Poverty/ Solar and Wind=Prosperity and Protection
It certainly is a plot twist. Who would have thought that a “Drill, Baby, Drill” fossil fuel diehard, a climate change denialist willing to blow up “a whole civilization” in order keep Middle East oil and gas flowing would be the one to make the strongest case yet for why the world would be better off without oil and gas?
The “war of convenience” has managed to accomplish in a month what 30 years of UN Climate COPs, mountains of scientific data, news reports, documentaries and protests couldn’t: get people all over the world on the same page imagining a future less dependent and less addicted to fossil fuels. The last of the oil tankers, cargo ships and LNG carriers that set sail from the Persian Gulf before the US, Israel and Iran began trading missiles and drones have now reached their destinations. With no more ships to follow, at least for a while, the shortages are real, the higher prices are real and the pain is real.
For the time being, more than 2,000 ships that have been held hostage in the Gulf for almost two months stranding billions of dollars’ worth of cargo and 20,000 sailors are staying put, caught in a stand-off between Iranians in gunboats determined to maintain control of the Strait of Hormuz and a US blockade patrolling just beyond the boarder in the Gulf of Oman.
There is no telling how long this impasse might last or whether it will end peacefully. There is also no guarantee the Iranians won’t try to seize control of the Strait again at some point. A line that had never been crossed has now been crossed with remarkable ease thanks to a small fleet of drones and a handful of soldiers zipping around in speedboats armed with missile launchers and mines. A war that was supposed to be quick and whose stated aim was to keep Iran from developing a nuclear bomb has instead provided Iranians with a new weapon of mass destruction and the war drags on. Iran’s economy may be in tatters, but every day the Strait remains closed it is taking the rest of the world down with it.
A TANGLE OF TRADE
It just doesn’t seem plausible. How is it possible that in the 21st century a global economy can be sent into a tailspin by the closure of a couple of shipping lanes only six miles wide, buffer lanes included? How can one small speck of real estate gum up the works of global trade? It is because it is the 21st century and now takes a world to make just about anything, especially anything with a chip. Materials, ingredients, parts and fuel are sourced from points far and wide. Supply chains have supply chains.
The headline isn’t that 20% of the world’s oil and gas pass through the Strait of Hormuz, but that nearly 100% of everything you see around you, from computers to food to the paint on the walls, has at least one component whose sourcing has been impacted by the war.
This is true even if there isn’t a drop of oil, a puff of gas or a single petrochemical from the Middle East in the product. The price of those commodities are set by global markets, which is why gas prices in the US have been hovering around $4 per gallon, even though Middle East oil accounts only for 8% of imports. That is still a great deal of oil—247 million barrels or 120 supertankers-full—but not enough on its own to account for a 25% price spike.
The combination of slow ships, narrow straits and fifty years of management consultants advising companies to reduce costs by offshoring manufacturing and relying on “just in time inventory” has made global trade increasingly defenseless against supply shocks. It’s the butterfly effect. Anything that disrupts one part of a complex system has consequences elsewhere. And anything that involves ships, which carry half the world’s cargo by value and 85% by volume, has large, rippling consequences. These massive vessels with an average cruising speed of 20 mph can take weeks to cross an ocean.
In a world where speed has become the default, where we can order almost anything on an app and expect delivery within hours, 20 mph is the metabolic constant upon which all global trade depends. If a ship doesn’t arrive on schedule to replenish “just in time inventory,” then the seamless facade of near-instant gratification starts to crack. For consumer goods, it may be just an inconvenience. But a shortage of parts can shut down a factory. A shortage of fertilizer can lead to lower crop yields and higher food costs. A shortage of LPG (liquified petroleum gas) for cooking means people might go hungry. A shortage of LNG (liquified natural gas) to generate electricity can mean higher utility bills and blackouts. A shortage of oil can lead to higher prices at the pump, fuel surcharges, fuel shortages and flight cancellations.
There simply isn’t much slack in the system. Even though most of the world’s oil and gas—80%— does not travel through the Strait of Hormuz, the loss of the 20% that does is enough to cause economic chaos.
TRUMP’S CARBON TAX
In mid-March, Patrick De Haan of the gas-price tracking service Gasbuddy noted that Americans were spending about $300 million more per day to fill up their tanks than they were before the war.
Per day.
A month later in mid-April, the tally is at least $9 billion, which is more than enough wipe out any tax savings from the Big Beautiful Bill, no matter what happens next. Nobody knows what’s going to happen next.
That’s important.
Climate change and pollution ought to be a good enough reasons to swear off fossil fuels, but apparently not. Instead, the uncertainty of supplies and unpredictable, soaring costs, call it Trump’s Carbon Tax, is kicking the energy transition into high gear. Global demand is stronger than ever for solar, wind, batteries, energy efficiency—anything that can provide predictable, affordable, price-stable, distributed, scalable, renewable power. Even in the US where the words “climate change” have been banished from government websites, the market for used EVs is through the roof and plug’n’play balcony solar panels are becoming increasingly popular.
“We live on a planet where the cheapest way to make energy is to point a piece of a glass at the sun,” notes activist and author Bill McKibben. From sun to solar panel, photons ship direct in only 8 minutes and 20 seconds. No wells, refineries, pipelines, tankers or blockaded straits to navigate. No merchant mariners held captive. Add battery backup and it’s 24/7 power. Nothing intermittent about that.
A carbon tax, even one that benefits oil companies and rogue states, chips away at the “green premium,” a term coined by Bill Gates referring to the higher costs many clean-tech startups struggle with as they scale up. “Price parity” is the holy grail for these companies. Thanks to Trump’s Carbon Tax, the gap is narrowing.
NOT ONLY OIL AND GAS | NOT ONLY HORMUZ
While the crisis in the Persian Gulf has put the focus squarely. on oil and gas, there are actually dozens of global commodities in short supply. There are 60 minerals on the USGS Critical Minerals List, including many considered essential for the energy transition. For the past five years, there have been shortages of natural rubber, the only material strong and resilient enough for tires capable of landing an airplane. Freshwater, used for drinking, agriculture, mining, manufacturing, energy production and cooling data centers, is a declining resource in part due to melting glaciers and the depletion of aquifers.
Likewise, although the Strait of Hormuz is uniquely critical for energy markets, there are dozens of maritime chokepoints. In 2021, a cargo ship traveling from Malaysia to the Netherlands got stuck in the Suez Canal for 6 days, leading to a traffic jam involving hundreds of ships. In 2023, a devastating drought in Panama, blamed on a one-two punch of a strong El Niño and climate change. reduced water levels in the Canal to such an extent that authorities had to slash the number ships that could make the passage. The slowdown lasted more than year. With experts predicting a “Super El Niño” forming later this year, it could happen again.
What happens to global trade if more than one critical strait or canal is out of commission at the same time?
SUPPLY SHOCK ALARM CLOCK
Supply shocks are now rippling into supply shocks, with each shock a wake up call and an opportunity. The status quo is failing, but the status diende (next) is well underway. We see this with the energy transition where wind and solar are now cheaper than fossil fuels. But that is only one part of the story. The materials transition—how things are made and what they are made of—is the yin to the yang. These two transitions amplify each other; together they lead to transformation.
Buckminster Fuller, for whom “think different” was simply thinking, famously said, “You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete.”
The existing model has us on a trajectory off a climate cliff, poisoning our air, water and soil along the way. Re-opening the Strait of Hormuz won’t fix that. But just as Trump’s Carbon Tax is speeding up the energy transition, supply shocks of every kind are giving the materials transition a boost. It is simply getting too difficult and expensive to keep on making things the way they have been made.
I have interviewed dozens of clean-tech companies across every sector—textiles to metallurgy, packaging to construction—for a book about the materials transition. Net-zero (low-carbon emissions) and circularity (low-waste systems) are a given, table stakes. These products also offer “negamatts,” benefits that cascade from using new or different materials or processes. Priced at a green premium, they can still be a bargain. At price parity, they are the obvious yes. And against a backdrop of chronic and worsening global supply shocks, they offer a way forward.
Examples of negamatts include:
shorter, more diversified supply chains naturally resilient to supply shocks and tariffs
distributed manufacturing models that simplify logistics and reduce transportation costs
processes that are energy and water efficient, often using “waste heat” as an input, reducing utility costs
manufacturing methods that use less material and/or reduce waste
products that use fossil-free feedstocks
products that replace or eliminate the need for metals and rare earth elements on the USGS Critical Minerals List
BUILDING A FOSSIL-FREE (or a fossil-fewer) FUTURE TODAY
The inventors, innovators and entrepreneurs of the materials transition use nanotech, biotech, green chemistry, physics, AI, biomimicry, and—most important—boundless imagination to figure out how to do more with less and how to do different. Working across a variety of sectors, they don’t always realize their work is part of a larger movement or that together they are ones building the future. But whether replacing petrochemical resins with drop-in ready seaweed nurdles to make compostable thin film plastics (Sway), or developing a cheaper and more energy efficient method for manufacturing ammonia and nitrogen fertilizer (Ammobia), or using a perennial grass as an alternative to wood to make strand board for home construction (PlantD), or inventing a recyclable carbon nano-material to replace copper (Dexmat)—all are part of the materials transition.
From my silo-skipping perch, I am better able see the patterns, parallels and how different materials and technologies could to be used together.
For example, imagine an EV with…
A sodium-ion battery. Unlike lithium-ion batteries, sodium-ion batteries are made of a cheap, abundant material that can sourced and processed with considerably less environmental mess. They are not as energy dense, but also are less likely to catch fire from a thermal runaway explosion, with negamatt implications for insurance premiums. Chinese EV-maker, BYD, is developing both sodium-ion and solid-state sulphide batteries, which also are less likely to catch fire.
An exterior made from a wood composite. Strong by Form had developed bio-inspired engineered plywood that layers additional wood strips in areas where more strength is needed similar to how a tree grows denser, stronger wood where it’s needed. In partnership with BMW, the company has experimented with wooden car parts.
Seats upholstered in mycelial leather. Ecovative, a pioneer in mycelial materials, is one of many companies growing a leather-like material from mushrooms. Mycelial upholstery has negamatts to spare: Unlike conventional leather, there are no cows to feed, water or in need of veterinary care, no land needed for grazing or feedlots, and no need for a slaughterhouse. And it takes only days to grow the material compared to the years it takes to grow a cow.
Interiors made of injection-molded cellulose. Simplifyber has partnered with Kia to test out a process that would replace plastic surface parts, reducing and possibly eliminating the need for a sub-surface petrochemical foam. Instead of multiple materials layered together to make a dashboard, it would be possible to design a mold to do it all, using a material that could be locally sourced.
Iron nitride instead of rare earths used in permanent magnets for motors. This is another example of using cheaper, more abundant material that can be sourced and processed with considerably less environmental mess. Niron is scaling up the manufacture of iron nitride magnets. Although applications for car motors are still in the future, they are working with a Formula-E designer. Research suggests iron nitride permanent magnets could improve EV performance.
Low-emissions, domestically-produced high-grade iron used in permanent magnets for motors. The entire US supply high-grade iron used in permanent magnets is imported from China. That could change when Hertha Metals’ demonstration plant comes online over the next 18 months. The Hertha process uses an electric arc furnace that produces lower emissions than a conventional blast furnace. If the source of electricity powering the arc furnace is green, then there are almost no emissions. Additional negamatts include saving time and fuel by eliminating trans-oceanic shipping.
Tires that improve performance. EV tires wear out faster because batteries are heavy. ENSO tires, which are made from sustainably-sourced natural rubber and recycled and bio-based feedstocks, are specifically designed for EVs and generate few microplastics than conventional tires.
Let’s tally up some of the benefits: No lithium. No battery fires. No rare earths. No messy mining and refining for lithium and rare earths. Less steel. Less plastic. Fewer microplastics. More components domestically manufactured using cleaner processes. And, of course, a vehicle that doesn’t burn fossil fuels.
None of these improvements require a trip through the Strait of Hormuz.
A SAMPLING
The seven companies in the “Imagine an EV” exercise span many disciplines: energy, chemistry, forestry, biotech, textiles, metallurgy. While the energy transition is focused on single lynchpin issue: energy, the materials transition, the yin to the yang, is the generalist. Individual innovations can seem incremental, but collectively they can dazzle. An EV with all those improvements and simplified supply chains—all those negamatts—is how something good gets even better.
There materials transition is in full swing all around us. Below is a sampling of seven more companies, each with different approach to a materials-based solution:
Shellworks is a UK-based startup that invented a shelf-stable, food-grade, dishwasher-safe, shower-safe, bendable, home-compostable plastic bottles made from microbial polymers. Instead of using microbes to break down biomass to use as a feedstock for a bioplastic, Shellworks uses biomass as food to fatten up microbes that are then harvested for natural polymers. The resulting material is called Vivomer. Although the exact recipe is proprietary, the raw materials—microbes, biomass and water—can be sourced anywhere. And if freshwater is in short supply, there are formulations using salt water microbes.
On, the Swiss running shoe company, now makes a spray-on running shoe—Lightspray—that uses a fraction of the material of a conventional shoe. It also has only eight components, far fewer than a conventional shoe. Production is automated—a robot arm does the spraying—which simplifies and speeds up manufacturing. After several years in development and the release of limited editions, commercial production is now scaling up at a new factory in South Korea. Although the shoes use a conventional petroleum-based plastic, On has also experimented with a fossil-free plastic made using a bioethanol produced by microbes. Perhaps one day these two great ideas will merge.
Rubi, based in San Francisco, is named for rubisco, an enzyme (a bio-catalyst that speeds up chemical reactions in cells) critical for photosynthesis. The company developed an enzymatic process to turn CO2 into a cellulosic fiber called lyocell. Typically, lyocell is made from a wood pulp, a process that requires growing a tree, felling a tree, then turning the wood into a pulp through an energy and water intensive process. Rubi cuts to the chase, producing fibers in a vat in a fraction of the time and using a fraction of the energy and water. The fibers can then be spun into yarn and turned into clothes. The company recently announced $60 million in off-take agreements from brands and manufacturers interested in using the product. With minimal space needs, Rubi can turn a shipping container into mini-plant inside a client’s factory to produce fibers on site.
Samsara Eco, an Australian company, uses enzymes to deconstruct polymers, turning polyester fabrics and plastic bottles into monomers chemically identical to what would be extracted from a fossil feedstock to make polyester and plastic. Although the Samsara Eco process doesn’t solve all the issues of plastics,* it has the potential to made a dent in the demand for fossil feedstocks. (Squint and every pile of old clothes or trashcan full of plastic bottles starts to look like a mini oil well.) The company recently opened a new plant with a large R&D lab in Jerrabomberra, with plans to build a network of recycling facilities around the world. The goal is to recycle 500 million garments and 10 billion plastic bottles by 2030. Samsara Eco just announce plants to expand its work to critical minerals using microbes to salvage rare earths from e-waste.
* CiCLO, headquartered in Gastonia, North Carolina, makes an additive for polyester that helps microplastics biodegrade. It does not affect recyclability so can be used both in virgin and recycled plastics.
Unspun is an Oakland, California company with a radically different way to make clothes: 3D weaving. Garments are made directly from yarn, without the need for cutting and sewing. For the last 11 years, starting with body-scanned, custom-fit, direct-to-consumer jeans, the Unspun team has been focused on finding ways to reduce textile waste with the goal of reducing carbon emissions. Now, with a technology turbocharged by AI, Unspun is scaling up for commercial production with plans to build ten factories across the US over the next few years. Negamatts include shorter production cycles (days or weeks instead of months) lower shipping costs (trucks versus cargo ships) and no tariffs. The fully automated system can also handle smaller production runs. If a style is success, it can more easily be reordered. This means less excess inventory for brands (a multi-billion dollar problem for the industry).
Kadeya, based in Chicago, eliminates plastic from the equation altogether through a reuse model. Behind the facade of a Kadeya vending machine, which dispenses drinks in returnable stainless steel bottles, is a dishwasher. When bottles are returned, they’re washed, digitally inspected and put back into rotation. Operating as self-contained, automated mini bottling plants, the first Kadeyas are being installed in closed loop environments: construction sites, factories and offices. Like drinking fountains, Kadeyas use municipal water hook-ups. The water is then filtered. Like conventional vending machines, Kadeyas can accommodate “bag in box” syrups to dispense sodas as well. Negamatts include eliminating the need to order and store pallets of water and soda on site and the fuel costs associated with delivery. Also, stainless steel bottles do not shed microplastics. Below is a video for a recent Wefunder crowdfunding campaign that raised $550,000.
Unlike the previous six examples, the concrete battery, a project of MIT’s Concrete Sustainability Hub, is not yet commercially available, but it is a brilliant example of how the materials transition can merge with the energy transition. To make a concrete battery, carbon black (a conductive material) is mixed into concrete (an insulator) with electrolytes. (Technically, this is a capacitor and not a battery, but both store energy and since more people know what a battery is, it is often referred to as a battery.) The vision is a multifunctional building material. A home with a concrete battery foundation would have a built-in energy storage system that could be hooked up to a rooftop solar array. Although a concrete battery would be less energy dense than a lithium-ion Tesla Powerwall, it could easily make up the difference by being bigger and no one would notice since the battery is doing double-duty holding up the building. Also, since concrete is a cheap and ubiquitous building material, a concrete battery would be fraction of the cost of a Powerwall. And if made using a low-emissions cement, then over the course of its lifespan, a concrete battery could be carbon-positive once the benefits of clean energy storage were figured in. The negamatts include no lithium, (no mining and processing) and resilient, grid-independent power.
There are thousands of companies all over the world working on all kinds of materials-based solutions, many if not most hidden in plain sight. Would you notice if the shirt you were wearing was made from lyocell brewed up in a vat versus lyocell sourced from tree pulp? Or, if a bottle was made of microbial polymers versus one made of petrochemicals if they provided the same functionality? From wall paints to fabric dyes, the materials transition is everywhere, in everything.
The only winners in the battle over the Strait of Hormuz are oil companies and petrostates whose profits soar with high oil and gas prices. According to an analysis by The Guardian, windfall profits are ticking along at $30 million per hour. “Saudi Aramco, Gazprom and ExxonMobil are among the biggest beneficiaries of the bonanza, meaning key opponents of climate action continue to prosper.” Russia is using money from de-sanctioned oil to continue its war against Ukraine, while Iran is using its unexpected bounty to continue its war against us. The worse it gets, the more money they rake in.
But the losers—everybody else—are fighting back. The energy transition is accelerating while the materials transition, operating mostly in the background, steadily chips away at demand for fossil feedstocks and other resources. It isn’t that we can do better, but rather that we are already doing better.
In the not-too-distant future, the Strait of Hormuz may not matter.
If you know of companies or technologies relevant to the materials transition, please share! Thank you. — J.A. Ginsburg
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