As the Bush administration confronts the economy's growing need for affordable and reliable energy, the critics of the hydrocarbon-based energy economy are back to the drawing board. The "soft" energy path of subsidies and mandates for conservation and nonhydro renewable energy-hatched during the 1970s energy crisis and popularized during the eight years of Clinton/Gore-was not supposed to end in price spikes and shortages in the California laboratory. Energy demand has rapidly grown even as the economy has become one-third less energy intensive. Nonhydro renewable energies constitute less than 2 percent of the supply mix after a quarter century of private and public effort. And hydrogen fuel-cell vehicles remain decades away from mass penetration at best. Meanwhile, a plethora of technological advances promise to increase the global market share of oil, natural gas, orimulsion, and coal beyond today's 85 percent and extend the hydrocarbon era well beyond the 21 st century.
Central economic planning may be intellectually dead, but planning for "energy sustainability" remains an environmentalist mantra. The theme of Earth Day last year, "New Energy for a New Era," set forth the goals to reduce total energy usage, phase out nuclear power, and substitute renewable energy for fossil fuels.
This prescription is at odds with market and political realities. Electricity generation has grown at twice the rate predicted by the Department of Energy in the last five years because of new uses of electricity in the digital age. Environmentalists, who talk a big game about renewable energy, oppose most renewable capacity on close inspection. They have turned against the kingpin of renewable energy, hydropower, in favor of fish migration and returning rivers to their natural state. Environmentalists have blocked wind and geothermal projects in "sensitive" areas-- where they are commonly located. Solar farms and some biomass projects have been questioned by environmentalists as too land-- intensive for the (limited) energy that is produced. Their professed concern about the role of carbon dioxide (C02) emissions on global climate fails to square with the fact that carbon-free hydropower and nuclear power, also vehemently opposed, produced 90 times more electricity in the United States last year than wind and solar combined.
Hydrocarbons are an expanding energy resource, not a depleting one as doomsayers have long alleged. The world's proved reserves of crude oil are 21 times greater today than they were when such recordkeeping began over a half century ago. Reserves of orimulsion, a recently commercialized tar-like oil, are greater than the global supply of crude oil. World natural-gas reserves are five times greater than they were in the mid-1960s. Coal reserves are four times greater than originally estimated a halfcentury ago and twice as great as all of the known oil and gas reserves combined on an energy-equivalent basis. Energy economists are still looking for a "depletion signal" nearly two centuries into the hydrocarbon age, increasing interest in the Thomas Gold hypothesis that superabundant hydrocarbons deep in the earth are slowly seeping toward the drill bit. Another explanation is that human ingenuity and financial capital are not depletable but expanding resources, explaining why hydrocarbon supplies are increasing even after consumption increases.
Increasing affordability has resulted from the increasing abundance of hydrocarbons, whether measured in terms of inflationadjusted prices or work-time pricing (the amount of time it takes the average laborer to purchase a unit of energy). The average laborer today can purchase a tank of gasoline and several days' worth of residential electricity in about two hours of work time. In 1940 the same purchase of 15 gallons of gasoline and 100 kilowatt hours of electricity required most of the workday. To use a more recent example, substantially higher naturalgas prices paid by consumers this year are about the same as the prices consumers paid in the mid-1980s, adjusted for inflation. …