Alternative Energy Faces Challenges

Searching for something to write about for my post this week, I was curious to find something current about alternative energy. I wanted to see what was in the news now, something new, something relevant. I found an article on the New York Times website Published this past October. Here is the information and citation, if you care to read the article in addition to my comments.

Alternative Energy Suddenly Faces Headwinds
By CLIFFORD KRAUSS
Published: October 20, 2008
http://www.nytimes.com/2008/10/21/business/21energy.html?_r=1

The premise of this article is that because of the hurting economy, even the development/advancement of alternative energy sources is taking a hit. The credit freeze, in addition to the plunge in oil/natural gas prices is the primary driver for this problem.

As I'm sure we're all aware of, the recent recession in our economy has caused many negative things in our economy. We have seen the value of the dollar greatly decrease in the world economy. Also, the US stock market has taken a great hit. Most all stocks have dipped. Alternative energy companies have been no exception. In fact, these companies have even taken a sharper hit than many other industries. This has caused (and will cause) capital dedicated towards renewable energy projects to decrease.

The logic behind this, experts say,is that if oil prices continue to drop (or remain at a low level), consumers will have less incentive to pursue renewable energy resources. This would obviously lead to less funding. This would create a chain reaction, and less research and development would be done, thus any new innovation would be deterred.

This has created a greater reliance on government subsidies to further research. Common knowledge is that our economy is greatly hurting, and our government simply doesn't have the money to dedicate to so much research. President Obama, in his presidential campaign promised, "creating five million new jobs in renewable energy and nearly tripling the percentage of the nation’s electricity supplied by renewables by 2025." To me, this just doesn't seem realistic with the condition our economy is in. It just seems like another empty promise from presidential candidate that sounds good, but will never happen.

"Venture capital financing for some advanced solar projects and for experimental biofuels, like ethanol made from plant wastes, is drying up, according to analysts who track investment flows. "

There is simply just not enough money to go around to fund all of these projects. Several projects have been forced to be put on hold because of lack of funding. Wind energy companies and ethanol projects have taken the biggest hit. In fact, not unlike other industries right now, an ethanol producer had to file bankruptcy in recent months.

The true question is whether or not the issue of alternative energy is important enough to sacrifice to our nation? At this point, I can't evaluate this question. I don't know what will happen. I think it's obvious that research will be cut due to lack of money. The economy is hurting, and honestly I would think it to be foolish to dedicate large amounts of money to alternative energy right now when there are so many other economic problems the US is facing. I think it's important that we still pursue other options for energy, however I just don't know to what degree. Any thoughts?