Monday, October 20, 2008

Falling Oil Prices and Alternative Energy

Good story here on the potential impact of lower oil prices on the development of alternative and renewable fuels. This is an instance I fear where the "market" may NOT be the most efficient mechanism for addressing the issue, as we'll always be playing catch-up and never be well-suited to meet the demand/supply spikes that seem to bedevil the oil industry (not to mention the inconvenient fact that we're not making many more dinosaurs willing to sacrifice themselves for our gas tanks).

Interesting idea at the end of the story, the one about using an electric car like a cellphone. What do you think?


Anonymous said...

Could this be a case where the government takes the strategic long view? There are already regulations on the big three to produce more fuel efficient and hybrid cars. Now profitable, dropping oil prices will eventually cause Detroit to come to the government to prop up a flagging alternative vehicle industry. An "opportunity to excel" for the next President.

The Conservative Wahoo said...


Ken Adams said...

I think it's interesting that the break-even point is more than double today's fuel cost at the pump -- it shows how horrendously hard the problem is. It'd be interesting to see what other assumptions went into the calculation, such as the service life of the cars and especially the batteries. If those are off even a little bit, the whole thing probably blows up.

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