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Jason Holliston
Monday, April 11, 2005  
Silver Lining in the Gas Prices

Gas prices have been on a steep climb lately, reaching just over $2.50 a gallon for 91 octane super unleaded over last weekend. There's a lot of talking about it, in offices and in the newspapers, and a vast majority of it is the grumbling kind. I gave this some thought on the way home, and as I see it, like almost everything, there's good to be found in the bad.

The downside of all of this is obvious. On the personal side, it means less disposable income for everyone that drives a car. I'm going to the beach this weekend with some friends, and I'll probably put about 300 or so miles on my car in the process. That'll run me about $40 in gas prices -- not cheap. I commute to work from the suburbs into downtown Portland everyday; that commute will now cost a bit more, and over the months, the extra cost will add up. On the macro scale, increased fuel costs translate into a higher cost of doing business in America for just about every organization. Those increases get passed along to the consumer, or cuts into the organization's profits, affecting shareholder value. Pretty bad, eh?

There's an upside, though. I'm not talking about the obvious one, either: increased conservation. This is the upside that you'll hear from most of the environmentalists, but I don't think that using less of something is a good all in itself. It can be, but using less fuel also can slow down the economy, and cost a lot of people their jobs and their way of life. No, I'm talking about increased pressure for breakthroughs in alternative energy. Specifically, more government, academic, and especially private research and development into non-fossil fuel energy sources.

Eventually, our reserves of oil, coal, and natural gas will run out. I don't believe that it's that imminent (rule of thumb is to take whatever the environmentalists say, and at least double it, if not triple it), but unless some very fringe science comes to fruition, we'll run out someday, probably between 50-100 years from now. Fossil fuels also put more stress upon the biosphere than is preferable, and negatively affect our quality of life. There are better sources of energy out there, if we can figure out how to harness them effectively. Solar is one of the more obvious ones, but wind power also shows promise. Hydrogen-based fuel cells are also on the horizon, but their effectiveness depends more on how we create the hydrogen itself. (Right now, most schemes for fuel cells is to use fossil fuels to create the hydrogen in the first place. You end up moving the pollution, and not eliminating it altogether.) My favorite -- by far -- is nuclear fusion.

So, if higher gas prices are here to stay, you can bet your bottom dollar that more (lots more) resources in the form of manpower and dollars are going to flow into all the above technologies. I welcome that. While sometimes dollars alone can't make a breakthough happen, more often than not, humankind can do anything it really puts its mind to. It's about time it put its mind to this noble goal.

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