Still addicted to oil

Today's Wall Street Journal has a sobering, but not surprising, front-page overview (subscription required) on California's failed efforts to veer the marketplace away from fossil fuels and towards alternative-energy sources. All the efforts to roll out mandates and subsidies have been, for the most part, killed or watered down by the oil and automotive industries. They say alternative technologies would require public subsidies that voters won't go for. Here's the upshot, according to the Journal: "The alternative-fuel push has helped scrub California's air, but it has done so by forcing improvements in fossil fuels and the cars that burn them. It hasn't curbed California's oil consumption, because it hasn't meaningfully deployed alternative fuels." Here's a snippet from the piece:

For a quarter century, California has pursued petroleum-free transportation more doggedly than any other place in the U.S. It has tried to jump-start alternative fuels ranging from methanol to natural gas to electricity to hydrogen. None has hit the road in any significant way. Today, the state that is the world's sixth-largest economy finds itself in the same spot as most of the planet: With $75-a-barrel oil, and increasing concern about the role fossil fuels are playing in global warming, 99% of its cars and trucks still run on petroleum products.

At a time when President Bush is advocating alternative fuels, particularly ethanol, as an antidote to what he calls America's "addiction" to oil, California's experience offers a reality check. Perfected over a century, gasoline is convenient, reliable, and, even at current prices, relatively affordable. Challengers start with big disadvantages: inadequate infrastructure, their own performance problems, and higher costs. Moving alternative fuels into the mainstream would require hard political and economic choices -- choices that even California hasn't been willing to make.

The wild card has been and continues to be the price of energy. If oil prices shoot past $100 a barrel and drivers are shelling out $5 a gallon for gas, the economic imperative for seeking out those alternatives could be strengthened. The trouble is you just don't look up "Alternative Fuels" in the Yellow Pages. It takes years of R&D and then years more of product development. And should energy prices drop, the incentive will disappear. That's pretty much happened in the 1980s.