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High prices spawn search for energy alternatives

PITTSBURGH TRIBUNE-REVIEW

High prices spawn search for energy alternatives

By Jack Markowitz
FOR THE TRIBUNE-REVIEW
Sunday, May 18, 2008  

Price lessons are painful. We’re receiving two of them right now. Gasoline is going up, houses coming down. And we don’t like either direction.Here’s another paradox. With fuel prices, all our sympathy is on the buyer’s side. In housing, we side with the sellers. 

It’s just too fast and scary, whatever is pushing regular unleaded to numbers never before seen over the gas pumps — $3.57, $3.72, $3.85. Where will it end? Surely above $4 a gallon by summer. Is this a foreign plot? Domestic profiteering?

Politicians to the rescue, inevitably and superficially. They’ll tax those oil company “windfalls,” by thunder! Or remove the tax at the pump from us the consumers, at least for summer. Genuinely or not, they seem to feel our pain — as buyers.

Or as sellers, if it’s a house at the root of the misery. Lawmakers’ instincts are to side with builders and homeowners. To help the latter stay in their houses, if possible. And to keep prices from sliding more. Never mind the would-be buyers who would welcome lower prices. Lots of luck with this balancing act.

But say this for the market signals that higher fuel prices are giving us. Consumers and especially industry are quickening the search for alternatives and renewables, fuels that might help make America freer of foreign supply. More domestic drilling and refining would make the most sense of course; and it probably will come in time.

But keep in mind the school of thought that has passionately advocated higher energy costs all along. Raise taxes at the pump, if we have to, to get that price up! Otherwise, we’ll never buy fuel-saving cars in sufficient quantity. Or leave the car at home altogether and take the bus.

So the market place is telling us to do just what the conservationist doctor would order. That’s not quite an outrage.

Just in the past week a consortium of U.S.-based Honeywell, Pratt & Whitney and JetBlue Airways, and Europe’s Airbus and Rolls-Royce announced they’re developing a “bio-fuel” that won’t compete for your food dollar. By 2030, they hope to fill nearly a third of the world’s airline tanks with a jet fuel made from vegetation and algae-based oils. Not kerosene from the $120 petroleum barrel.

Separately, DuPont Co. and a Danish firm plan to make “cellulosic” ethanol not from edible corn, but from cornstalks and sugar cane stalks. Agricultural waste, in short. Their $140 million plant will be built in the United States, and be up and running by 2012.

A Royal Dutch Shell executive said there’s “plenty of oil in the world,” but whoever restricts supply — read Saudi Arabia, Venezuela et al — are in fact spurring alternatives such as wind, solar and nuclear energy and Canadian tar sands. While legions of inventors, too, are laboring in garages, basements and research labs to devise better batteries, appliances and gadgets to save kilowatts and BTUs. 

Cheap energy won’t get all this work done; high prices might.

Retired business editor Jack Markowitz writes Sundays and Thursdays. He can be reached at[email protected].http://www.pittsburghlive.com/x/pittsburghtrib/s_568081.html

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