The political chatter is again drifting towards alternative fuels as the solution to high energy prices.  The immediate problem with alternative energy is that the free market cannot produce them in an efficient manner. The cost of the alternatives is not yet low enough to make a profit.  The attempt to subsidize the biofuel industry has so far resulted in higher food prices leading to food riots, and ultimately an increase in world hunger.  It's important to understand that this industry is entirely government related.  The free market economy researched biofuels for years and determined that without subsidy from governments there was no profit to be made. 

Wind power and solar power are in the same situation.
Without massive subsidies from governments across the world, these sources are also at present not profitable.  So should governments subsidize these industries?  The argument is that this would allow energy companies to build the infrastructure, and in time, the companies would become profitable and we would have our magic potion.

The more exotic fuels are no where near ready.  Energy sources such as ocean waves, and fusion are at this point decades away from viability.

This won't work either.  At some point there will be enough alternative energy sources to lower the demand for oil and coal.  This lower demand will of course drastically lower the price of oil.   One can already clearly see that the rise in oil prices is not related to demand alone, but to a speculative attack as well.   So the fall becomes even more dramatic. When the fall in prices occurs, the efficiency of the alternative fuels shifts the market back to oil.

This Catch-22 is obvious to even the casual student of economics.  It is strange that the world has evolved to a point where only the politicians lack the mental horsepower to understand this conundrum.  John McCain has admitted freely he has no idea how to lower the price of a barrel of oil.  (Here's a hint, supply and demand).  The only way to stop this cycle is to let the advancement of technology play out. When we find an energy as efficient as oil, the problem is solved.

This is not an easy issue.  Some day technology will either increase the efficiency of these alternatives to make them competitive, or the permanent price of oil will reach a point where the existing efficiency is sufficient to foster free investment.  But we're just not there yet.   The logical conclusion is that the "safe" alternative fuels are either not very safe, or not efficient.

Nuclear power is only an option if the entire body of U.S. law surrounding the construction of nuclear power plants is re-vamped.  Currently the legal red tape takes this option off of the table.  Sadly most of this legislation was created in response to anti-nuclear activists who had no real knowledge of the issue.  The children of this group is entirely responsible for the biofuels fiasco as well.

So what's the solution?
This is where things get even more complicated. The cost of oil today is completely the result of government intervention.  On this point there can be no debate.  There is plenty of oil around the world that can be brought out of the ground, and oil and gas prices would tumble quickly.  The United States Congress is stopping the drilling in Alaska and further exploitation of vast oil reserves in the Gulf of Mexico.  This same group is responsible for the legislation that stops nuclear power plants.  Given the two, I would suggest that the chances of drilling for oil are much better than the chances for fast track legislation to encourage investment in nuclear power.

"But there isn't enough oil in Alaska to change lower the price."
Rubbish.  As I've mentioned earlier, the increase in the price of oil is not just a supply/demand issue, ithere is also a speculative component.  Drilling in Alaska will drive out many of the speculators.  Drilling in Alaska and the Gulf of Mexico should completely drive them from the picture.

Environmental concerns.
Alas we must appeal to man's ability to reason.  There are environmental consequences.  But global warming may or may not be one of them.  The hysteria surrounding the global warming issue is indeed something to behold.  I don't consider myself a global warming denier but a healthy skepticism at this point is long over due.  Recent data on ocean temperatures and upper atmospheric temperatures would seem to indicate that global warming is clearly not progressing at previously "certain" levels.  This is fact.  Even the most impassioned global warming believers must keep facts and logic at the fore of their argument, else they have no argument.  In my mind there is a bigger issue, which I have never heard addressed by even the skeptics.

Shouldn't global warming be an exponential problem? Or at least linear?
We know that increasing temperatures increase the rate of organic decay, which thus release more carbon dioxide.  So if CO2 is the cause of increasing global temperature, how could it ever be stopped?  This is not a complex equation. If G=global temperature, and C is carbon dioxide then an increase in C (X+C) causes and increase in G.  This is the core of the global warming argument.  It is solid logic if we can find a direct relationship.
But further, and increase in G causes and increase in C, because as mentioned warmer temperature increases the rate of decay and subsequent release in C.
So G+C=C+X, X being the resultant increase in C, caused by the increase in G.
What factor stops the increase in C?

And now we must address the question that has plagued man since he stood erect, or for the divine interventionists among us, since he received his soul and logic.  What is the risk benefit relationship?

This question is real, tangible and must be answered.
How many poor people are we willing to kill in pursuit of the fight against global warming?  I am not attacking anyone with this question.  The answer is, we don't know.  If we see an acceleration (a real measured acceleration empiraclly attributed to CO2 increases) in global warming, we will have to resort to cleaner fuels.  If biofuels are the answer, more people will go hungry and starve to death. If wind and solar and the answer, it will take decades to build the infrastructure.  The radicals and the politicians will of course scream and yell that this is not the case, the rich will just have to sacrifice a little more.  But this is a lie.  Bill Gates doesn't grow any corn, and he can't build solar and wind power plants quicker if you take all of his money.  It is a logical, logistics issue. There are only so many people with the intelligence and experience to do these things.  There are only so many bulldozers available, only so much metal can be allocated. 

So we are clearly and logically left with a risk benefit analysis.  The question is not how much more can we take from the rich, it is how many poor lives will we sacrifice. 

Once again we are at that historical oddity where logic and reason must fight with politics and emotion.  There is no easy answer.  We can't get the oil out of Alaska without building and oil rig, and a road to the rig.  We can't get oil out of the Gulf of Mexico without risking the lives of some fish.  In a better world (notice I didn't say perfect) the politicians would realize that we must be honest with ourselves and sacrifice the pristine frozen tundra in Alaska, in order to save lives.  If we are to embrace alternative cleaner energy sources, we must increase drastically the gas tax to pay for it.  Gas taxes fall hardest on the working poor.  By the logic of the left this is a good thing. Cigarette taxes also fall most heavily on the poor, but the left contends that this modifies their behaviour and we force them to live healthier lives.  Well, a gas tax will give incentive to the poor to get better educated, and become wealthy so that they can afford to drive their automobiles to work. 

If I were king (President).
I would veto every piece of legislation until Alaska and the Gulf of Mexico were opened for drilling. This would immediately lower the price of a barrel of oil, and thus spur growth in the economy.  I would continue to spend taxpayer money to study global warming and the environment, but I wouldn't buy the first draft.  I would immediately sign legislation killing the biofuel subsidy, before it becomes so entangled in the economy that it can't be killed.  Whey would I do this?  Because there is no logical alternative.

And now I'll address the concerns that we've all heard before.

It doesn't matter if we drill in Alaska, because it will take five years to get the oil out.
You said that five years ago and now oil is over $100 per barrel.  Further we could award the contract to the company that can get the oil out in three years.  (This is still America right?)

Biofuels may be more expensive, but it saves the environment.
Maybe, we don't know yet.  But if so we are still starving poor people.  Make a decision, but be honest about it.

Global warming is real and will kill us all.
That's not true.  The evidence is simply no there at this point.  Could it become real? Sure, but an asteroid could hit us as well, so I wouldn't sweat the global warming risk until we're a little more sure.

The rich will have to pay more.
I thought you wanted the rich to pay more for health care?  Also the rich got rich by producing the goods and services (including health care) that you so desire. What if they weary of producing only to have governments loot what they earned?  Who will produce, Barack, Hillary and McCain?  I think not. Honest people realize that what we have, we have because someone scratched the earth to plant a crop.  Or dug in the earth to pull out the rich minerals provided so that we can make steel for your car, or girders for your hospital. 


And finally the last resort of the desperate.
If we didn't have this war, we would have money to invest in alternative fuels.
Again, I thought you wanted that money for health care?  But I'll let that pass.  The oil we get now comes from the Middle East.  Sadaam was killing and torturing his own people, and invaded his neighbors twice.  So are you OK with the killing and maiming?  If we killed him and left, there would have been a tip in the balance of power in the region.  Are you confidant that Iran would act in our best interests?  What would oil be right now, if Sadaam were still in Iraq, and Iran was developing nuclear weapons?  Sadaam would not have been as accommodating as George Bush.