A Politically Favored Flop
Looking at The Energy Transition through the lens of history: Just because it's politically favored does NOT mean that a technology will last or that it is a practical innovation.
President Kennedy became noticeably flustered when the news broke on June 4, 1963 that Pan American (Pan Am) Airlines had placed an options order for the Concorde. The Concorde was a joint UK/ French program to develop a supersonic passenger airliner. Supersonic jets could fly faster than the speed of sound (Mach 1), and Pan Am wanted supersonic jets.
When he found out about the Concorde- Pan Am deal, President Kennedy placed numerous calls (recordings here) to Vice President LBJ, the FAA director, and Transportation Secretary Douglas Dillon, planning how they could stop Pan Am from buying the Concorde. “We’ll give him all the trouble he wants because there isn’t going to be anything that makes me more excited than that,” President JFK told his FAA administrator, referring to Juan Trippe, CEO of the iconic Pan American Airlines
Kennedy didn’t have a problem with supersonic transport. But Kennedy hated the idea that Pan Am, the prestigious American airline, would buy supersonic jets from Europeans. And to add insult to injury, news of the Pan Am order broke the day before Kennedy planned to announced the US government backed supersonic transport program. “It’s probably stupid of us to be putting it out tomorrow if he’s already buying a European Plane,” Kennedy said. Nevertheless, the next day at the Air Force Academy graduation, President Kennedy announced to the world:
“It is my judgment that this Government should immediately commence a new program in partnership with private industry to develop at the earliest practical date the prototype of a commercially successful supersonic transport superior to that being built in any other country of the world” (emphasis added).
And the race was publicly on for a US civilian supersonic aircraft.
It seemed like a natural progression. By the late 1940s, US Air Force Pilot Chuck Yeager broke the sound barrier in the X-1 experimental aircraft. By the 1960s, military fighters and bombers routinely flew faster than the speed of sound. The world had the technology to fly significantly faster than the speed of sound. And with multiple governments backing the technology, it was reasonable to assume that supersonic civilian aircraft were just around the corner.
And the government thought so too. The US government studied the idea of civilian supersonic transport and concluded that it could be commercially successful.
But it soon proved to be a political target set by visionaries who didn’t understand the enormous practical trade-offs and challenges. It’s hard to see what’s wrong a government program if your salary depend on it, leading to a cycle of industry support for the political targets that kept the program aloft. After all, so the thinking went, to be against supersonic transport was to be against the future. But just because something is technically possible and politically favored, doesn’t mean that it’s worth the trade-offs required to get around the real-world constraints.
For starters, when an aircraft speeds up, it creates a rapid change in air pressure, often creating a moisture cloud and a sonic boom went it flies past the speed of sound. (Although the moisture cloud and sonic boom don’t have to be at the same time.)
This physical reality isn’t a one time “boom,” meaning the boom is continuous, following the plane anywhere it goes, as long as it flies at supersonic speeds. As Dr Jim Wild, physics professor at Lancaster University, described:
“People tend to think of the noise as when the aircraft is breaking the sound barrier. It’s not just when that aircraft passes through the sound barrier. What happens as the aircraft is moving faster than sound, that shock wave moves with the aircraft. So it’s more like the wave cone on the bow of a ship and you get that wake afterwards and it just spreads out behind the ship. It’s the same with an aircraft at the speed of sound. As it travels along, this shock wave ripples out. And as the aircraft moves along, all underneath you get this sound, this big rumble following the aircraft” (emphasis added).
No one quite knew how the population would react to repeated and frequent sonic booms. “It was essential to know what kinds of boom exposures might be accepted by the public or to what extent widespread annoyance and complaints might be generated,” documents reported.
So, the planners decided on a trial by fire, flying supersonic military jets over St Louis starting in 1961, creating approximately 150 sonic booms over a 10-month period in what was known as Operation Bongo 1.
A few years later, a much more intensive Operation Bongo 2 rumbled over and rattled Oklahoma City. For 6 months in 1964, US military aircraft roared over the Oklahoma capital, subjecting the population to 8 sonic booms a day, totally over 1200 window rattling booms.
The October 1964 issue of Popular Mechanics described Operation Bongo 2, and it sounded a lot like an action movie script. During Bongo 2, the government rented houses in Oklahoma City, rigged them with sensors to monitor the booms, and deployed a small fleet of vans packed with instruments. The FAA also ran an answering service, and complaints peaked at over 500 calls a day. But complaints dropped off to around 70 a day towards the end of the operation. The consensus was that most people would get used to the window-rattling booms. But the political opposition grew. By the 1970s, concerns over noise and environmental pollution culminated when the FAA banned civilian supersonic transport over land.
That ban still stands today. However, NASA recently reported working on appealing that supersonic ban in favor of a noise standard, potentially paving the way for future supersonic transport over land.
But supersonic jets had bigger problems than just ‘noise.’ There’s an ocean of difference between what is technically possible if you have unlimited budgets vs what is commercially practical. When Kennedy announced the US government backed program, he stated that America’s “supersonic transport (would be) superior to that being built in any other country of the world.” So, when Boeing was selected to design the aircraft, naturally, it had to be faster than that European Concorde.
And it was technically possible to fly faster than the Concorde. The Concorde was designed to fly around Mach 2 (twice the speed of sound). The US experimental aircraft, the X-15, flew Mach 6 , in excess of 3600 miles (~5800km) per hour. The US super fast spy plane, the Blackbird SR-71, launched in the mid 1960s, could cruise at Mach 3 at 85,000 feet in the air, allowing it to fly higher and faster than pretty much any threat it might face.
But practical trade-offs win out against political platitudes. At Mach 3 speeds, the air moved so fast around the Blackbird that the skin of the plane got hot, really hot. During flight, the exterior of the plane heated to 500 - 600 °F (260 - 315°C), higher than jet fuel’s ignition point of ~ 428 °F (~220°C). This required special fuel with a very high ignition point.
And the intense heat expanded the aircraft as it flew. When the Blackbird landed, the fittings cooled down and shrank, springing fuel leaks that literally left puddles of fuel under the aircraft. Now it wasn’t a major fire hazard since the Blackbrid used special fuels. But the leaks and the heat provided near endless work for the ground crews.
Plus, the heat of flight could literally start to weaken, if not all together melt, a standard aluminum air frame, forcing the Blackbird to be built with titanium. Titanium is a far more expensive material and is more difficult to work with than the typical air frames of sub-sonic aircraft.
And all this was to fly a crew of two - wearing astronaut suits - at Mach 3. The military and CIA could justify to Congress spending the resources to keep it in the air. During the Cold War and facing mutually assured nuclear destruction, it’s perfectly understandable why the government would pay a premium for spy plane technology. But would the average family going on vacation to Scotland want to pay a premium price just to shave a few hours off a flight? Was that commercially practical?
As it designed the US supersonic jet, Boeing struggled to balance the real-world trade-offs of the proposed supersonic airliner. If the aircraft was too small, it couldn’t hold enough passengers to make it profitable. If it was too big, it would get heavy, making it difficult to fly at that speed and very expensive to build because of the materials.
And then there was the Ozone layer. No one really understood what would happen if you regularly flew hundreds of jets that high in the sky, all just to save a couple hours on a trip from New York to San Francisco or from Washington to London.
It just wasn’t worth the squeeze. By the early 1970s, Congress revoked the funding for the US supersonic airliner, killing it before it ever took flight. Meanwhile across the Atlantic, development and testing of the Concorde continued.
Initially, the surge of enthusiasm for the Concorde resulted in airlines placing over 100 orders. But as Warren Buffett said “only when the tide goes out do you learn who has been swimming naked.” The tied started to go out and the Concorde turned into a hype driven recipe for a political flop: overestimate the demand and underestimate costs.
While the Concorde (at Mach 2) was relatively easier to make than the US’s proposed Mach 3 jet, relative is the key word. Development costs ballooned out of control from the original budget of £150 million. As the initial designs took shape in the early 1960s, engineers discovered a major problem: the Concorde would fall short of crossing the Atlantic, reportedly by as much as 500 miles. Redesigns, with engineers working under political pressure, reduced the passenger count as costs ballooned to an estimated £1.3 Billion +.
When the Concorde was finally ready for commercial flight in the mid 1970s, the timing couldn’t have been much worse. Fuel prices surged in the 1970s, disproportionately impacting the Concorde. Physics is a unforgiving master and moving an aircraft at Mach 2 consumes significantly more fuel than a much slower subsonic jet. As the NY Times reported:
“The quadrupling of oil prices in 1973 severely restricted the commercial prospects of the Concorde, a gas guzzler by comparison to subsonic jets. A Concorde consumes four times the fuel that a Boeing 747 does on the New York - Paris run.”
Fuel costs compounded Concorde’s other major problem: designers, driven by political hype, significantly overestimated market demand. Concorde tickets were usually more expensive than typical first class tickets. The Concorde was stuck in a very niche market, competing for people willing to pay a premium over first class seats on a 747. The Concorde could only carry around 100 passengers; a 747 jumbo jet could carry around 400 souls. But the 747 could also offer a lot of much cheaper economy seats, helping to offset its fuel costs. Unfortunately for the Concorde, not many first class passengers were willing to pay that premium just to shave a few hours off a trans-Atlantic flight. And a solid majority of passengers were perfectly content paying for the far cheaper economy seats.
Safety concerns dampened public interest as well. In 1973 at the Paris Airshow, both the Concorde and the USSR’s supersonic jet (TU-144) flew demonstration flights. The Concorde flew first and the Soviet Pilot reportedly said: “Just wait until you see us fly, then you'll see something.” When it came time for the Soviets to showcase their supersonic jet in front of the crowds, the engines blasted at full power, sending the jet into a steep climb. Unfortunately, the jet lost control and broke apart in mid air as it hurdled towards nearby houses. The crash killed all on board and a number of victims on the ground.
Orders for the Concord dwindled from the initial 100 + to just 14 aircraft delivered to two airlines: British Airways and Air France. With that dwindling market, there was no hope for the UK and French governments to recover the development costs. In 1979, the New York Times reported that the UK government wrote off $320 million in debt that British Airways owed for the jets. At that time, British Airways reportedly was loosing $34 Million a year on the Concorde (around $143 million today or ~ £ 117 million). Eventually, the UK government exited the Concorde program all together, selling the remaining parts and jets to British Airways for just £16.5 million in 1984.
Air France didn’t fare better. By the 1980s, losses mounted while the French Transportation minister Daniel Hoeffel pledged that France “will not and cannot abandon Concorde.” The French Government handed the Air France Concorde fleet a lifeline: the French government agreed to adsorb up to 90% of the Concorde’s operating losses.
So much political hype could only keep the plane aloft for so long. Eventually, all bills come due. On November 26, 2003, British Airways flew the last Concorde flight, bringing the era of civilian supersonic flight to a close. (At least for now. Nearly a half century after the first failed US supersonic attempt, the US government once again backed a civilian supersonic transport R&D program.)
So what can we learn from the tale of the Concorde? Political favor and hype only can keep a program aloft for so long; but the gravity of practical reality will eventually take over. It is not enough to be technically feasible and politically favored. An innovation or an invention must be practical and create value to the customer at the price the customer is willing to pay.
In laymen terms, innovation allows you to do more stuff with less sweat. It’s often measurable in a way you can spell out HOW it creates value to the customer.
When looking at a new technology hyped by politicians and the media, we like to run it through what we call, The Narrative Test. The narrative test tends to apply more to consumer goods (for example, cars) and not as much to public services, such as national defense. Here is the narrative test: Is there actual consumer demand for the technology if the government turns off the subsidy spigot? Does it need a political narrative to survive?
This is especially relevant when it comes to green ‘technology.’ Here’s the narrative test applied to green tech; if climate change was solved tomorrow, OR if governments no longer perceived the need to ‘fight climate change,’ can the technology succeed on its own merits? Is it measurably better than the thing it is trying to replace at a price consumers would be willing to pay? Or will it collapse under its own weight if politicians stop propping it up?
For some, Net Zero is an article of faith that we ‘have’ to ‘fight’ climate change. So, the cost of supporting EVs, wind turbines, green hydrogen, etc is worth it. But the continued political support for those techs depends on:
A belief that the climate models accurately reflect that climate change is a major threat to humanity
PLUS
A belief that the current energy transition can influence the climate in a meaningful way
PLUS
A belief that the energy transition is the best, most cost effective way to go about it.
If the government stops believing ANY of those 3 points, then the political gig is up. Then, you’re left with the narrative test: is there enough customer demand to actually support the full costs of those programs? If not, let the investor- and the taxpayer- beware.
The Moral of the Story is that impractical technologies can limp along if there is enough political support to pour a nation’s hard earned treasure into it to keep it alive. However, once that life line is severed, reality sets in. Not all technological advances are practical, even if they are held up as the way of the future. They may turn out to be giant wastes of money, fueled by a race to prove who has the biggest egos or the blindest faith.
Beware of political target set by idealistic officials, clueless of the trade-offs necessary to navigate the rocky canyon of real world constraints.
As always, Thanks for Reading!