Hi Henry. I am of a different opinion on alternative fuels.
I believe that price is not going to spur their demand - only proven reliability, consumer acceptance, and a complete change in the landscape of the energy industry.
In the case of gasoline, we now see all the major auto cos with R&D efforts to produce hybrid fuel cells. But at this very moment, one can get an electric car made by GM in California for slightly more than a modestly-priced car. The electric car will obviously save the driver big time on gas costs, and I believe the purchase of this car also comes with some sort of California tax benefit.
Nevertheless, demand for the model has been below expectations.
These hybrid cars may very well go the way of solar powered homes, IMO, if the public does not display a sharp increase in interest very shortly. There's only so much money that these companies will sink into this project until they throw in the towel.
Great innovations often prove unprofitable unless there's signs of strong demand for them. With fuel cells and electric vehicles, the demand is simply not there. People are happy with the status quo because they are familiar with it and they tend to rely on their cars heavily. One is hesitant to trade the reliability and familiarity associated with a gas-combustion engine for the politically-correct but unproven hybrid engine.
Getting away from gasoline and cars for a second and focusing on natural gas and utilities, should the rise in natural gas become unbearable, the main alternative fuel for most utilities is coal, which is not as efficient and more pollutive. I believe there would be a great outcry against an increase in its use. The only other alternative is nuclear power which seems to be dying a increasingly-rapid death.
To me, it is clear that oil distillates and natural gas will remain #1 indefinitely, regardless of price volatilty.
-Paul |
