An Oil Platform
Despite the myriad indicators painting a positive picture for the future of clean technology, there are many bumps in the road ahead. Achieving large-scale competitiveness with fossil fuels will be much more difficult if Congress does not pass carbon legislation, since people in more carbon intensive industries are working furiously to bring new electrons to market. Saudi Arabia has about 25 percent of global proven oil reserves under its sands, and could continue supplying oil at current rates for 90 years. The country maintains a level of spare capacity that could allow the Saudis to engineer a price collapse if expensive oil continues to encourage renewable technology. Even if the world moves away from Middle Eastern oil, private companies have achieved advances in the technology of oil extraction that make previously uneconomic deposits in places like the Gulf of Mexico look very attractive. Many in the industry also believe that they can increase the rate of recovery from existing wells from 30 percent to 50 or 60 percent within a decade, a jump that would augment global reserves substantially. Vijay Vaitheeswaran, a correspondent for The Economist magazine, notes in his forthcoming book “Zoom” that although BP and Shell are spending about 2 billion per year on renewable technologies, each is spending around $15 billion per year on oil, and this ratio is typical of major oil companies.
An oil sands mining operation
Perhaps the most ominous threat to the future of clean technology lies in a range of carbon-based alternative energies that will become economically viable if oil prices stay high. Notable here are the coal bed methane deposits in the American west and the tar sands in Alberta, Canada. Both of these sources are incredibly resource intensive to produce, and could effectively undo any reductions achieved by carbon legislation if burned on a large scale. Nevertheless, interest in these fields is growing: Peter Tertzakian of Canadian investment firm ARC Financial estimates that investments in the Alberta tar sands in the coming years will add up to around $60 billion.
Which energy technologies will prevail?
These examples serve to illustrate that rising oil prices do more then benefit clean technology: they drive oil exploration and investment in climatically reckless fossil-based alternatives. Whether the cleaner path will win out remains an open question; companies and countries are pumping money into fuel cell research even as they shore up petroleum reserves. Steering the energy future in a greener direction will take political leadership. The core purpose of government is to direct its resources toward development that serves the best interests of society: and nothing would serve those interests more than the advancement of clean technology.