Alternative Energy: It’s Not for Everybody

Before I go any further, I’d like to say one thing right up front. I think alternative energy is a grand idea. I have fantasies about my country’s deserts (I’m American) being covered by massive solar farms, and my nation’s long and beautiful coastlines sprouting windmills by the thousands. I have Sci-Fi visions of millions of zero-emissions vehicles clogging America’s roads in gloriously carbon free traffic jams.

But the embrace of clean energy by some could mean economic depression for others. After all, what are all the countries whose economies depend on fossil fuel exports going to do when technological advances and the threat of climate change eventually makes their main source of export income obsolete?
And whether alternative energy’s big day arrives next year, five years from now, or even 15 years from now, it will arrive. A recent issue of Wired Magazine reported that by 2012, 68 models of hybrid-electric vehicles will be available to U.S. consumers. The big American industrial firm Dupont has signed a deal worth up to $100 million with the U.S goverment to develop solar cells with a conversion efficiency of 50 percent. And the European Union has announced plans to make biofuels 10 percent of its motor fuels mix by 2020, up from 1.6 percent today.

President Hugo Chavez of Venezuela has big plans for his country’s oil reserves, not only does he want to build an extensive social safety net for his nation’s 27 million people, he wants to use Venezuela’s oil wealth to mount a credible challenge to U.S. influence in Latin America.

But Hugo Chavez’s rosy view of his country’s prospects could be easily be darkened by any sudden drop in the price of oil. Exports make up 35 percent of his nation’s $109 billion GDP, with oil sales providing 82 percent of that total.

Of Iran’s 2005 GDP of $193 billion, $56 billion comes from exports. Ninety percent of the export revenues flowing into Tehran’s coffers comes from oil.

For Iraq, riven by violence since the fall of Saddam Hussein in 2003, oil made up 99.5 percent of its 2005 export revenues of $24 billion.

Very few oil exporting countries produce any other products that come even close to filling the gap in their financial ledgers that a big drop off in oil revenues would create.

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