8-22-08 by dugan
OK, oil is a fraction of the price it was in July, and gasoline is finally below $3.00 a gallon. Natural gas is also about 50% below its top price this summer. And renewable energy projects are tanking, due to both the falling fossil fuel prices and a dried-up credit market. The U.S. is on the verge of the same loss of resolve that killed renewable energy in the 1970s.
Clifford Krauss of the New York Times describes succinctly what happened back then:
In the 1970s, just as in recent years, high prices for fossil fuels led
to rising interest in renewables. But when oil prices collapsed in the
1980s, the nascent market for renewable energy fell apart, too.
Congress eliminated tax credits for solar energy, ethanol could not
compete with cheap gasoline and a wind farm boomlet in California
failed to catch on in the rest of the country.
Much of the green energy tech that’s being developed now was invented years ago, but couldn’t get traction when oil was cheap and government refused to make clean energy a real energy policy. Some of those inventions have been dusted off and are about to brought to market by venture capitalists in Silicon Valley.
For instance, bel
ow is a refrigerator-sized flex-fuel low-carbon fuel cell invented nearly a decade ago, and just now nearing production by Bloom Energy with money from Kleiner Perkins, one of the Silicon Valley capital companies. If fuel prices crash, so may its prospects, unless there is a steady energy policy behind it. Then when oil inevitably spikes over $100 a barrel again, it may go through the same boom-bust cycle.
Much of the wind technology that was funded for commercial development before the credit crash and the current drop in oil prices dates back to the mid-1970s. Solar thermal energy is also nothing new–it’s just languished for lack of steady energy policy that makes commercial development possible.
Tax credits for wind and solar projects came within weeks of lapsing altogether before they were folded into the financial rescue package last month–an inappropriate spot for tax policy, but a hail-Mary pass by the Senate to keep them from disappearing. It was a harbinger of the barriers to a sane energy policy in the next administration–no matter who’s president.
Only with a strong memory of what $145 a barrel oil and $4.50 gasoline did to the economy this year, and the certain knowledge that the same cycle will happen again, will the U.S. escape from an energy policy under the thumb of the oil business. It’s a bit like Tinkerbell: doomed unless we all clap loud enough for Congress to hear.