Followup to We Will Never Run Out of Oil

I stand by my earlier statement that an "expensive government program in alternative fuels and fuel cells seems unnecessary." The triple benefits you describe are illusory. If the government wishes to create jobs, there are far cheaper ways to do it, such as cutting tarriffs. Increasing the fuel tax would also slow the depletion of fossil fuels as well, and it would give the private sector a reason to develop alternative technologies. It would also be a net revenue gain for the government, which could use the money to strengthen the social safety net. Governments are notoriously bad at picking winning and losing technology, and their money could be better spent elsewhere.

Social Policy and the Oil Supply

As an aside, I've gotten quite a few letters accusing me of being in the pocket of the oil companies, which I find pretty amusing as I'm a former Greenpeace employee. I've never stated that continued reliance on fossil fuels is a "good thing", just that the oil supply will never run out. Both the extraction and use of fossil fuels are harmful to our environment and our health. There are all kinds of benefits to finding and implementing cleaner technologies, and these need to be encouraged. However, if our economic and social policies are to be effective, they must be based on a rational set of assumptions, and clearly the idea that the oil supply is soon going to run out is a bad one!

A more rational approach would be to levy heavy per-unit taxes on the use of highly polluting technologies while giving favorable tax treatment to the use of clean sources of power. We need to balance this against the fact that heavy taxes discourage production which causes our economy to suffer. By having a rational set of assumptions and by understanding the trade-offs we're making, we can set a reasonable industrial policy that both encourages economic growth and values the health of our environment.

Thank you for your considerate and well thought out letter.

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