Can we reduce our oil use and oil imports through alternative fuels, such as ethanol and wind power?
Not any time soon. The world uses oil, natural gas, and coal for a reason. They are inexpensive and abundant. The problem with the alternative energy sources under development today is that they cost dramatically more than fossil fuels. To become attractive to consumers and industry, these sources require large subsidies or much higher fossil fuel prices. Even more important, many renewable energy resources have limited scale. Even at maximum capacity, ethanol is unlikely to provide more than 15 percent of our total fuel requirements. Wind power, which currently needs subsidies, tax breaks, and mandates to spur private-sector investment, would consume vast areas to make even a small dent in current sources of electricity. The same with solar. The Department of Energy’s long-range forecasts expect only a slight increase in the total share of energy from renewable sources over the next 25 years—from 6 percent to 8 percent of consumption, including hydropower. Still, capital is flowing in
