Sunday, August 09, 2009

Robert Hefner: The Grand Energy Transition

While Hefner advocates a national energy policy, I'm unconvinced. As he points out, government does a horrible job at picking favorites so I'm not sure how this would be different. While I suspect he's right about natural gas given that we're finding it practically everywhere (not in the US with over 3000 Tcf's but an abundance in China, India, South America, Northern Africa and some parts of Europe), not only does this create substantial incentives for a transition but there remain unknowns as to what the optimal path of implementation will be.

This said, he brings up a good point that nearly all energy policy of the past has been akin to religion with governments repeatedly attempting to play favorites. Even US military policies have essentially subsidized the price of oil by projecting stability in much of the middle east and global trade routes to say nothing of the coming carbon tax / cap and trade schemes being concocted. Have a watch - it's definitely worth at least the first 5 minutes to get the gist of what he's saying but if you're like me, it will be fascinating and you may find the optimism enough to watch the full panel discussion ( @ the Aspen Institute, h/t Paul Kedrosky):

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