The Myth and Reality of 'Energy Economics'

John Stossel Rephrases the Question for Us

I grew up with NASA getting man to the Moon, after the Manhattan Project brought a quicker end to the war, so the current talk of some centralized push to make us energy independent is appealing. Still, John Stossel shines some important light on the economics involved and makes some important points about how markets actually work.

The Idiocy of Energy Independence I
The Idiocy of Energy Independence II

I wondered why we didn't make a wholesale transformation to some alcohol-based fuel system after the 'gas crisis' of the Seventies, and the truth is there was always a whole lot of oil. It was relatively cheap and didn't create competition for corn. The government simply can't buy ethanol into the marketplace -- especially in a food crisis.

Perhaps the next decade will see a variety of solutions and better uses of existing technologies. Most of them will likely come from private initiative in one form or another. Indeed the financial incentive is there, without government creating it. There was a myth going around in the Seventies about the 100mpg carborator and how some big oil company bought up the patent. If it's lying in some plan file somewhere it's time to pull it out and make some real money. Stossel gives us the example of a $300 million prize one candidate proposes be offered for developing a truely workable electric car battery. Hey, if someone actually develops it they're looking at many times that amount in royalties/licensing; and that's just on Prius refits alone! Some after-market manufacturer might just write a really great open-ended agreement for those rights.