At some point, oil will cost $500/bbl - and then, the cost of hauling fill for new dams, steel for transmission towers, concrete for new reactors and so on, begins to strain the capital resources of those who need new capacity.
Oil won't get that expensive (esp. in real terms) over night, or in a year or two. It will become more expensive over time.
As it becomes more expensive alternatives will make more sense and will be used more, its not like we will start when oil is $500/bbl.
Letting the market adjust mostly by itself, will be slower than throwing around massive subsidies, but that's a feature not a bug. Slower is less expensive (even with the transportation cost going up, and even before considering time value of money), and its more likely to result in a superior result than a rushed, massively subsidized, crash effort. Technology gets better over time. Bad ideas can be weeded out by small pilot projects or even before they reach that level. Market discipline works better at weeding out bad ideas for energy production, than the political process. For so many reasons, relatively slow, and market based, is better than heavily subsidized and rushed. |
