In my first post, back on Apr 3, I talked about the rollercoaster trajectory of alternative energy development over the past 30 years or so. The centerpiece of that discussion is this graph of crude oil price history – and my fear that we’re about to repeat the 1980s as far as alternative energy goes.
Constant 2007 Dollars
What causes me to be skeptical of the staying power of today’s interest in alternative energy developments? Look at 2 key similarities between today and the few years following 1974:
- Rapidly rising energy costs and restricted availability created panic demand for energy conservation and new energy sources. After about 1982, the Western economies enjoyed the benefits of improved energy efficiencies for the next 2 decades, but …
- Solar, geothermal and wave and tidal developments that flourished under briefly high energy prices withered away under cheap oil. The ‘feel good’ incentive of energy independence and environmental responsibility was insufficient to overcome the higher cost of unconventional energy.
Readers here will not be surprised that I do not expect – in the absence of reliable, long-term economic incentive – that many of the current flurry of alternative energy developments will have much staying power or much impact on our energy economy.
My concern has little to do with the state or quality of the alternative technologies – in most cases, the requisite science and engineering is already well developed. My concern has much more to do with sustaining the political will to assure a predictable, long term economic climate which nurtures the growth of new energy technologies to economic maturity. Oil prices that bounce from $50 to $140 and back, and natural gas prices that vary as widely, undermine any other incentives in place in today’s American economy.
One doesn’t have to be a political radical to see that a purely free market is not especially efficient here. But the political element of a solution is so controversial and emotion-charged that I doubt we can ever adopt an energy policy that permits more than a fits-and-starts progress in alternative energy.
What do you think??? Am I being too pessimistic? What are some good approaches?
March 24, 2010 at 3:31 pm |
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June 5, 2009 at 9:18 am |
As “Clean Future Energy” notes, the 1970s oil price excursion was driven by supply disruptions, while today’s is primarily driven by increasing demand. Perhaps that is a reason for optimism for more price stability, but the trajectory of energy prices over the past 24 months doesn’t support a lot of confidence.
It looks as if Clean Future, “abarrelfull” and I all see the continued growth of alternative energy as more of an issue of political willpower and economy than one of technology development.
June 5, 2009 at 8:27 am |
I think you are overly pessimistic.
Oil prices are likely to remain well above their historic norms. A general carbon tax is all thats needed to tip the balance. However, I am not holding my breath.
June 5, 2009 at 7:46 am |
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