By Brigitte L. Nacos
Today, for the first time in more than three years, the price for a barrel of crude oil fell below $50 on the New York Mercantile Exchange. In many regions of the country the gasoline price dropped below $2 a gallon in more than 20 states—about half of the cost some four months ago. With unemployment rising and no end of recessionary conditions in sight, many Americans breathe a bit easier when they fill up their cars. Yet, the news about falling oil and gasoline prices is more bitter than sweet because of the direct relationship between the cost of old energy sources and the development of new ones. When old energy is cheap—or let’s say relatively cheap--interest and investment in alternative sources tend to drop regardless of the long-term consequences for a nation mostly dependent on foreign oil.
President-elect Obama has promised to change America’s energy policy that up to now was most of all for the benefit of the oil industry and others in the old energy sector. Even if the future president can convince congressional majorities to sign on to his ideas and funding requests, he must also enlist the private sector and the public at large to support an all-out effort toward new energy sources and energy independence.
Government alone cannot do the job. The private sector is the engine for developing various kinds of alternative energy sources and, in the process, firms and jobs that cannot be outsourced to companies and workers abroad. Unless the price of oil and of all old energy remains at high enough levels to add profitability into the calculus of alternative energy, entrepreneurs will not get involved and car companies and other corporations will not change their ways drastically.