As a result of my conversation with Bill Clinton, two months later I flew to New York to attend the Clinton Global Initiative. On 21 September, the second day of the conference, I joined Bill Clinton and Al Gore to personally pledge $3 billion to develop clean fuels. As I was about to sign the commitment document, I looked up at President Bill Clinton and, with just the right degree of dramatic pause, pen poised, said, ‘That’s an awful lot of noughts.’
It was a firm commitment, intended not just to move the Virgin Group forwards, but to inspire others. The idea is to pinpoint our transport companies to fund this investment, but, if it’s not met from that direction, the money will come out of our other existing businesses as well. We will do it, whatever it takes. One of the things I stressed was that this wasn’t philanthropy or charity. Our entire Gaia project is based on sound commercial sense. I didn’t want the media to give the impression that this was some kind of donation to environmental causes – but they did, painting me as some kind of universal benefactor. Charitable donations do have their place, but to me it seems far more sustainable to invest seed money in order to generate money for the future so that the ball continues to roll and we can have a better chance of competing with the oil and coal companies.
After my public announcement, which, within moments, was beamed around the world, Steve Howard said, ‘Richard, we work with lots of different organisations, but the pace of change at Virgin is without parallel. It is really impressive to see the Virgin machine unleash itself.’
Someone asked me what I felt about soaring oil prices. To the disappointment of my airline’s executives, I said, ‘I think that soaring oil prices are the best thing that has happened to this world. It forces governments and big business to find new ways of reducing their dependency on oil. We needed something like this to happen to bring a halt to an almost suicidal dependency on fossil fuel. If we could get it right, it might stop Middle East wars in the future.’
I love the challenge of learning about industries I know nothing about. At school, I had no interest in chemistry. Now I wanted to learn everything there was to know about ethanol, cellulosic ethanol, ISO butanol, methane and carbon; the best products to make fuels from – sugar, corn, switch grass, willow trees and waste product; about wind power and solar power; and about hydrogen and geothermals. By the end of a three-month crash course of asking questions, I felt I was equipped to start fulfilling my $3 billon pledge by ramping up Virgin Fuels as a global force. But the best way of learning was to get on and do it: to try to turn Necker and Moskito into the first 100 per cent carbon neutral islands; to build our first corn and sugar ethanol plants; to try to develop clean ISO butanol for planes, and so on. I wanted to do for renewable energy what private capital did for mobile phones two decades ago, by turning a small idea into a universal phenomenon.
Towards the end of 2006 I invited Tim Flannery to Necker to speak to all managing directors of Virgin worldwide on the environment. Tim is a brilliant Australian scientist and explorer, whose groundbreaking book, The Weather Makers, had started me thinking about the climate in the first place. I think what Tim will do for us is to help give us the scientific background to the path we’ve now embarked on, and give our people a much better understanding of why we are on it. It is not just about having green credentials; I have made a firm commitment that this is going to be an industrial strategy for Virgin in the twenty-first century. I’m sure that I’m going to get a lot of criticism. I can hear people saying, ‘If CO emissions are the problem, why doesn’t Richard Branson just stop his planes from flying?’ But people want to fly and, if we stopped, we’d leave a gap that somebody who might have no sense of responsibility at all would fill. We want to be the people who fly, but in a responsible way. Towards this, by the end of the year, we were aiming to save fuel when planes took off. If they were towed to and from the end of the runway while waiting to take off, they wouldn’t need to stand around so long with their engines spewing out CO. We started the ball rolling by experimenting at Gatwick and Heathrow. If every airline did the same, we estimated that it would save up to three tonnes of aviation fuel per flight, and, together with other efforts, airlines could cut aviation carbon emissions by about 25 per cent worldwide.
A case in point was the Virgin Atlantic Global Flyer. It wasn’t made of metal; instead it was built of a carbon composite, which is very light but capable of operating safely at very high altitudes to improve fuel efficiency dramatically. I had been there just a year earlier in Salina, Kansas and saw it off on its dazzling flight. I chased it to the freezing wastes of Canada and I was back in Kansas when it landed, sixty-seven hours later. I was excited when I saw for myself how it could circle like some glorious eagle, far above the world at 49,000 feet, and use less fuel per hour than a four-wheel-drive vehicle. This stunning achievement led us to starting up Virgin Galactic and investing in space, the final frontier. Without space, and the work of organisations such as NASA, we would not even know or understand the realities of climate change or feed the current population of the world. Satellites beam back information from space that allows farmers to look at long-range weather forecasts and plan their planting and harvesting to the best advantage. Space also provides the answer to necessary future travel without atmospheric impact. However, sadly, the technology is still in the dirty, polluting and carbon-intensive Cold War era and there has been no private investment in viable space-launch systems using renewable fuels. We aim to change that as well.
Using the Virgin Atlantic Global Flyer as a model, Virgin Galactic’s fleet was green from the word go. In addition to the spaceship’s construction from carbon composite materials, the launch system prototype relies on a fuel derived from laughing gas and rubber, and, because of the unique piggyback launch system, we can do thousands of flights for every one of NASA’s.
One of the big corporate events of recent years has been Virgin Galactic getting going. We had the concept of course, developed by Burt Rutan as a very benign space-launch system – but the first exciting thing was the realisation that this could be a new space-launch system to take payload and scientists into space. The second was that I could also clearly see a vision of the future and answer many people’s questions: why does space really matter; and why have you got involved in it? Many people seemed to think that Virgin Galactic was some kind of challenge, a personal plaything, albeit an enormously expensive one. The truth is that space is the future of mankind. Everybody, from Dr Tim Hansen at NASA’s Goddard Institute, who is one of the fathers of space science, right the way through to Professor Stephen Hawking, the father of modern physics, agrees that better access to space and the utilisation of space is going to be crucial to the reorientation of the world’s industries in coping with climate change.
For a start, we wouldn’t even know about climate change if it hadn’t been for the work that was done from space on proving that the climate is changing. Ground-based science is unable to prove climate change in the way that satellites have done. Secondly, very few people realise that we couldn’t feed the current population of the world without observations about the climate and weather forecasts, which can only be done from space. The weather and agricultural satellites and the global positioning system in space give farmers a heads up on the weather patterns and allow an extra 15 per cent productivity to actually reach people’s mouths. Crate-loads of food don’t spoil at the docks any more; farmers can choose to mill their corn a day earlier, farm it a day earlier, plant it a day later. The first thing many farmers in the American corn belt or the plains of India or the middle of China do every morning is to go on the Internet and check out what the long-range agricultural satellites are saying they should be doing that day or that week. Access to space has allowed us to increase food production over the past fifteen years by about 10 per cent – which has just about coped with the population growth.
One of the most crucial things we are going to have to face as a civilisation is population growth. It is the key to our s
urvival on the planet. We can’t find the solution scientifically and technologically unless there’s a willpower to find it. The real problem is that the environmental lobby hasn’t really grasped the fact there are 6.5 billion people on the planet.
Tim Flannery sees the Earth as a spaceship circling through space. This is what he has to say on the subject of Spaceship Earth’s population in The Weather Makers:
In 1961 there was still room to manoeuvre. In that seemingly distant age there were just 3 billion people, and they were using only half of the total resources our global ecosystem could sustainably provide. A short twenty-five years later, in 1986, we had reached a watershed, for that year our population topped 5 billion, and such was our collective thirst for resources that we were using all of Earth’s sustainable production.
In effect, 1986 marks the year that humans reached Earth’s carrying capacity, and ever since we have been running the environmental equivalent of a deficit budget, which is only sustained by plundering our capital base. The plundering takes the form of overexploiting fisheries, overgrazing pasture until it becomes desert, destroying forests, and polluting our oceans and atmosphere, which in turn leads to the large number of environmental issues we face. In the end, though, the environment budget is the only one that really counts.
By 2001 humanity’s deficit has ballooned to 20 per cent, and our population to over 6 billion. By 2050, when the population is expected to level out at around 9 billion, the burden of human existence will be such that we will be using – if they can still be found – nearly two planets’ worth of resources. But for all the difficulty we’ll experience in finding those resources, it’s our waste – particularly the greenhouse gases – that is the limiting factor.
Over the next century as we go into a population of nine billion we’ve got to be mindful of space. During 2006, as I travelled to the crowded big cities of the world – to China, India, Africa, the US – I looked and saw and pondered. I am someone who believes in humanity and in the value of each single human life. I can’t bear human misery and will do all I can to eradicate poverty, disease, suffering – yet a population of nine billion is simply unsustainable. The sheer weight of numbers and overuse of resources will end up killing us. I didn’t know where the answer lay, or what the way forwards was. I knew that there was an urgency to stop climate change as fast as possible for us to just win some breathing space before we could even start to think of population numbers.
Our plans for Virgin Galactic were soaring ahead at a great speed. We had broken ground on a space station of the future in New Mexico. It was like science fiction. Futuristic designer Phillipe Starck came up with a dramatic eye logo – a bright blue iris with black pupil – and this has been inlaid on top of a flat disc that covers an enormous underground silo. The disc slides back silently in a very Star Trek way, to reveal the launching pad below. But some things that should have flown smoothly ground to a depressing halt – thanks to archaic laws and human resentment.
Back in 2004, when we first discussed launching Virgin USA in the US as a low-cost alternative airline to the existing domestic carriers flying long-haul between the East and West coasts, and ordered Airbus planes to show our intent, we expected some opposition in the way of healthy competition. What we didn’t expect was to be sandbagged by an old xenophobic law. In the early days of flying, America was worried about ‘foreign planes’ flying in American skies and, in order to prevent that, in 1926, they passed the Air Commerce Act, which requires that all domestic airlines remained under the control of US citizens. This was boosted by the Civil Aeronautics Act of 1938 that says that no more than 25 per cent of the voting shares of any airline company based in the US shall be in foreign hands. This meant that 75 per cent had to be under the ‘actual control’ of US citizens, and we were told by the US Department of Transportation (DOT) that we had to restructure.
We tried to comply, but I had no idea that endless problems would be put in our way. Two years dragged by with legal argument and eventually, in 2006, I asked Fred Reid, former president of Delta, to run the new carrier, which would be under the control of a US company, VAI Partners, which would own 75 per cent of the capital stock and would appoint two-thirds of the voting members of the board of directors. We separated Virgin America from Virgin Atlantic and all our other airline companies, including Virgin Galactic, or any company that shared the Virgin brand name. In addition to ordering new planes, we budgeted about $200 million for start-up marketing in the US, we moved our base of operations from New York to San Francisco, and I thought we were finally on track to fly.
However, I had agreed to be the very visible face of the airline. I was ready to get out there and promote it, as I have always done with all Virgin companies. Perhaps I was too visible. We received massive opposition from labour unions and all major airlines in America: Continental Airlines, American, United, the lot! Our DOT certificate was withheld for months thanks to this protectionist opposition, while we did everything feasible to comply with every new hurdle every step of the way. Even though Virgin America would be run by a board that was largely made up of US citizens, the opposition claimed that it was a ploy and I would still be in charge. As 2005 dragged on into 2006, we were told that, ‘Virgin America’s responses to inquiry were not sufficient to prove that the airline is a “US citizen”.’ Our opponents urged the DOT to require us to produce additional documentation. Whatever we did, however, it seemed it wasn’t enough.
Again, we proposed that the airline be restructured, with the voting shares held by a trust approved by the DOT and with only two Virgin Group directors on the eight-person board. In addition to removing the Virgin Group’s veto and consent rights, Virgin America said that it would remove me from the board, and possibly even drop the Virgin brand entirely. Then the new board said they would be prepared to remove CEO Fred Reid, ‘should the DOT find that necessary’.
By that point, I had stepped back, although I was kept informed as a shareholder. I was very gratified that there was also a groundswell of populist support for Virgin America. California governor Arnold Schwarzenegger, Gavin Newsom, the mayor of San Francisco, and Hillary Clinton all said the new airline would create a thousand new jobs in its first year of service (estimates say this would rise to 50,000 new jobs across the US by the fifth year). Even the San Francisco Giants came out in support. The biggest surprise, though, was the 50,000 letters sent in our support to Congress and DOT. As many as 25,000 Americans signed a petition in our favour and there was a website, www.letVAfly.com, where people could check on news. There were T-shirts and mugs on sale with the slogan, LET VA FLY.
I think people realised that Virgin America would keep prices down and improve the quality of flying. In fact, a study by the Campbell-Hill group showed that if Virgin America had been allowed to fly in 2006, it would have saved US consumers more than $786 million, or an average of $88 per round trip for that year alone. It would also have led to discounting in most, if not all, new markets. This was the opposition’s problem. As Fred said, ‘In the old school of airlines, we’re everybody’s nightmare. They want to kill a powerful new airline in its infancy. Maybe they need to pay attention to what their customers are saying about their level of service.’
All our efforts seemed in vain; by the end of 2006, Virgin America was still grounded. Rumours were circulating that we would only be allowed in the air if the US got ‘open skies’ access to Heathrow and other European airports, even though the two issues were totally unrelated.
At the end of September 2006, I was in South Africa again, when Brad Pitt and I met with Nelson Mandela to help lend our support to a new landmines initiative with the appropriate name of the Sole of Africa – motto: ‘It’s time to put your foot down’. The other patrons included Mandela’s wife Graça Machel, Queen Noor of Jordan and John Paul DeJoria of John Paul Mitchell Systems. The Sole of Africa was working with the Mineseeker Foundation to get rid of the 100 million landmines that are buried in the earth and kil
l or maim someone every twenty minutes. A quarter of a million square miles of land in the world is useless – much of it in Africa, particularly in Mozambique. Graça was born into a farming family in that lush and beautiful country, so she was eager to be involved with the project. We would be starting in Mozambique to clear the land and return it to agriculture. As soon as the land was cleared, ‘Sole’ co-operatives would train local villagers to plant and harvest crops, which in turn would feed them and allow them to make a living by selling their surplus.
The British Ministry of Defence had created wonderful new radar technology that used airships, built by a Virgin company, the Lightship Group, to locate landmines. Before, only 40 square metres of land a day could be cleared, but the brilliant airship technology allowed 100 metres of land to be scanned per second. What would have taken 500 years would now take a decade or less. When Mozambique was returned to its farmers, then we would move on, country by country.
Graça is also an advocate for children, and she and Mandela discussed with us the issue of the huge numbers of AIDS orphans in Africa. Again, the figures were hard to comprehend. Brad was shocked when Mandela turned to him and said, ‘There are a million children whose parents have died from AIDS. More than 1,000 a day are orphaned in South Africa alone. Six, seven and eight year olds are now the sole breadwinners for their family.’
The sheer quantity could seem overwhelming, but there is a story, which I find appealing. It goes like this: a young girl is walking along a beach where the sea has washed up hundreds of starfish which are dying on the shore. As she walks, she stoops and picks up the starfish and throws them back into the sea. An old man is passing and says to her, ‘Why are you doing this? It’s not going to make a difference because there are hundreds there.’ She looks back at him and says, ‘If I can make a difference in one of their lives then it’s worth it.’
Losing My Virginity: How I Survived, Had Fun, and Made a Fortune Doing Business My Way Page 45
