An Opportunity on Oil

Mr. Bush’s idea of action is flawed. He touts a range of government investments in alternative energies: electric cars, hydrogen cars, ethanol that’s made from waste products or grass. This approach assumes that government knows which technologies are worth backing. It assumes that if government researches a new technology, the private sector will see a business case for bringing it to market. And it neglects the fact that government research into alternative energy is engaged in an arms race with private research into oil extraction. The president’s budget proposes $150 million next year for ethanol research, but private investment in new technology for extracting hydrocarbons comes to about $18 billion annually.

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