Why Oil Really Fell Today—and Could Keep Falling

Oil slipped below $120 at one point today and now overall is down nearly 20 percent from its July high of near $150. But I don’t think the drop had much to do with the usual suspects—a weak consumer spending report, less risk that Tropical Storm Edouard will smack the Gulf Coast—which will surely be mentioned in the financial pages tomorrow.

I think the drop had everything to do with reports this weekend that MIT chemist Daniel Nocera seems to have discovered a cheap—by a factor of 1,000—and easy way to separate hydrogen from water.
Apparently Nocera believes that this technology could become widespread within a decade. Check this out: “In a future hydrogen economy, he imagines, a house would function much like a leaf does, using the sun to power household electricity and to break down water into fuel—a sort of artificial photosynthesis.”

Bottom line: I think research into alternative energy technology is moving ahead way faster than the Washington politicians realize. (But we still need to exploit oil and coal and nuclear to bridge the gap from a hydrocarbon to post-hydrocarbon economy.) And it is all happening without spending trillions of dollars in taxpayer money for energy-themed Manhattan Projects or Apollo programs.

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