The future of Oil

Interesting article from The Economist - The future of energy - which discusses the $7 trillion which has flowed from US consumers to OPEC producers over the past 30 years and the increasing feasibility of alternative energy sources. The article advocates a rising gas tax in the US, the proceeds of which would be used to lower other taxes, as a growing disincentive to use gasoline.

Here in the UK we have high petrol taxes (highest in Europe) which, as far as I know, provides little impetus to convert to other fuels suggesting that a gas tax is perhaps an overly simplistic approach to discouraging usage both for congestion, environmental and economic reasons.

Such changes will not occur overnight. It will take a decade or two before either fuel cells or bioethanol make a significant dent in the oil economy. Still, they represent the first serious challenges to petrol in a century. If hydrogen were made from renewable energy (or if the carbon dioxide generated by making it from fossil fuels were sequestered underground), then the cars and power plants of the future would release no local pollution or greenhouse gases. Because bioethanol is made from plants, it merely “borrows” its carbon from the atmosphere, so cannot add to global warming. What is more, because hydrogen can be made in a geographically distributed fashion, by any producer anywhere, no OPEC cartel or would-be successor to it could ever manipulate the supplies or the price. There need never be another war over energy.

Posted by Paul at October 26, 2003 03:05 AM |

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