The Economic Impact of the E-Cat

The emergence of the E-Cat on the world energy scene is likely to have a huge economic impact, but the nature of that impact is not easy to predict. Could a clean, abundant and cheap source of energy be anything other than positive news than the world economy? Or could the shock of such a disruptive technology on the scene upset an already fragile global economy to the point of causing turmoil and disorder?

Andrea Rossi has said that he will be selling thermal and electric energy to E-Cat customers at 10 percent of the going market rate — certainly an extremely competitive price point, and one which  is likely to attract a rapid rate of adoption of the technology.

Looking the business world, there will be very few businesses that would not benefit from heat, hot water, air conditioning and power at one tenth of current costs. Energy is used in all business activity, from small offices to large factories. Companies are always looking at ways to reduce overhead costs, and utilities are usually one of the major expenditures of most businesses. A 90 per cent reduction in utility payments would make free funds to allow businesses to such things as expand operations, hire more employees, do more research and development, reduce the cost of goods and services sold, and increase corporate giving for philanthropic purposes.

If the E-Cat is adopted on a wide scale, there will have to be a new industry built to allow for the proliferation of the technology. Factories and employees will be needed to build the devices, and there will be a need for skilled workers to install and maintain the E-Cats. We know that the E-Cats need to be refueled every six months or so, so a whole new distribution and delivery system for the nickel, hydrogen and catalyst will be required.  Again, this would mean a whole new area of economic activity.

What will be the E-Cat’s impact on the existing energy industry? And how will that impact affect the overall economy? Rossi has said that he expects the E-Cat to fit in with the existing energy industry — that will likely be true in the short term, because of the magnitude of the existing energy infrastructure — it’s simply not possible to replace what is currently in place in a short time. But if the E-Cat becomes the energy source of choice for say, power stations, there will certainly be an impact on the coal and natural gas industries. Coal is currently considered by many as a necessary evil — it gives us cheap electricity, but at the cost of unpopular carbon emissions. If the E-Cat were to replace coal for power production, then the mining industry and all those who rely on it for a living would be deeply affected.

The oil industry could also be impacted. An early application of E-Cat technology is likely to be in commercial and home heating. It will be a much cheaper alternative to heating oil and propane (which is a partially a by-product of oil refining). Wikipedia states that heating oil accounts for about 25 per cent of the yield of a barrel of crude oil, so if the E-Cat replaced oil only in the heating sector, it would have a substantial impact on demand for oil. Andrea Rossi believe it will take a long time for the E-Cat toe be employed in automobiles, but he does see an early use for it in ships and trains, which would again have in impact on oil useage. Entire countries are heavily dependent upon oil for economic activity and government revenues. There could be fallout on the international level if the E-Cat replaces oil in any substantial amount.

The E-Cat would almost certainly be seen as a better alternative to current fission-base nuclear power. Current nuclear plants are likely to be decommissioned very rapidly if the E-Cat emerges as a viable competitor.

When any industry is affected by a disruptive technology there is inevitably an knock-on effect in the financial markets. If you look in the portfolio of any investment fund that is invested in the stock market you will almost certainly find some exposure to energy-based stocks. So there is a real possibility that the E-Cat could have a depressive effect on portions of people’s retirement and other savings accounts. It may be that other stocks do much better becaus of the E-Cat, so the overall impact might not be negative, but people who are heavily invested in the energy sector could see a loss in value or their investments.

These are just some suppositions based on what would seem to be logical deduction. It could be that my analysis is missing something important — if so, please let me know! Undoubtably, if the E-Cat is a real alternative there will be unexpected consequences, especially if the new kind of nuclear reaction leads to the development of technologies not yet forseen. It will be certainly interesting to see how things progress once the E-Cat is introduced on a commercial level — but it could be a wild ride.