Theme by nostrich.
We are at an impasse all too similar to that of the 1970s. The Yom Kippur War in October of 1973 led to the Arab Oil Embargo on all nations supporting Israel, which sent oil prices soaring. Today we are still at the mercy of the Middle East, with OPEC controlling the production of oil, thus facilitating skyrocketing prices. In 1973 President Nixon created Project Independence, with the goal of achieving energy self-sufficiency by 1980. Earlier this month at the International Renewable Energy Conference, President Bush declared “We’ve got to get off oil” in response to OPEC’s decision to keep supplies stagnant and in 2007 signed the Energy Independence and Security Act with biofuel mandates and similar domestic energy self-sufficiency.
So is this a revolution that will change the current state of our world, or is it a bubble like any other that will burst in only a matter of time?
Well, the tech rev of the 70s was short lived and fell due to a lack of urgency. The Oil Embargo stopped, we had an excess supply of oil (we dipped into Alaska), and as a result oil prices fell dramatically in 1986. No need for clean tech anymore. The 70s oil shock was just that: a shock. It came and went and was only inflicted by OPEC, the suppliers. Though we are still under OPEC’s control, our demand for oil has increased to atrocious highs, both domestic and abroad (China, India). And our supply is diminishing (some like to call this peak oil, which basically means we are at or near the peak of our oil production. Production will continue but will decline in volume until we run out). Thus our current shock is self-inflicted. Dipping into Alaska again will prove futile, as the oil reserves may not be plentiful enough to affect the market.
Other economic and market factors signal a lasting revolution. 10% of US VC investment went into clean tech in 2007. Wall Street is preparing its commodities desks for carbon. And major corporations are investing in R&D for cleaner sources of energy. This type of rally was not seen in the 1970s when the only major investments were government funded R&D projects.
However, one can compare this to the dot com bubble in the early 2000s to argue that the clean tech revolution is just a bubble itself. Well even if it is, the best technologies will survive. I’m still writing in this tumblelog on this internet despite the dot com bust. Just as hopefully I’ll still be providing energy for my home with solar panels in the near future.
But beyond innovation and beyond economics lies policy, perhaps the greatest impetus toward such a revolution. The good thing is all three Presidential candidates call for a mandatory cap and trade system, much like the one we already see under the Kyoto protocol and throughout other markets worldwide. There is a myriad of energy bills currently in Congress. And even states have taken action with 29 mandating climate change action to reduce vulnerability to energy price strikes and improve local quality of life.
But then again our decline in productivity growth and steep increase in the price of raw materials mirrors the 1970s. We’re in a recession, potentially a stagflation, or even worse a depression (from a housing standpoint at least). Which doesn’t do anybody any good, least of all new technologies dependent upon huge investments, innovative dedication, and great political attention.
Oh, and as for nuclear- definitely not in my backyard (at least until we perfect our own way of reprocessing the nuclear waste without shipping it across the country to Canada to do so). But I’ll learn about that another day.
