Is It True that Alternative Energy Is Too Expensive? | Now is the time to switch

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Many people assume that alternative energy is simply too expensive, and not competitive with oil and other conventional means of energy.

While some alternative writers allege that the big oil companies have artificially increased alternative energy prices by buying up promising alternative energy technologies – for example supposedly helping to kill first-generation electric cars by buying up promising battery patents so they couldn’t be used in electric models – we don’t even need to go down that rabbit hole.

Specifically, a 2008 report for Congress by the Congressional Research Service entitled “Renewable Energy R&D Funding History: A Comparison with Funding for Nuclear Energy, Fossil Energy, and Energy Efficiency R&D” notes:

Over the 30-year period from the Department of Energy’s inception at the beginning of fiscal Year (FY) 1978 through FY2007, federal spending for renewable energy R&D amounted to about 16% of the energy R&D total, compared with 15% for energy efficiency, 25% for fossil, and 41% for nuclear. For the 60-year period from 1948 through 2007, nearly 11% went to renewables, compared with 9% for efficiency, 25% for fossil, and 54% for nuclear.

In addition, when the externalities of environmental, military and terrorism costs are taken into account, conventional energy production is much more expensive than most people realize.

For example, as I wrote yesterday, the government has decided that deepwater oil drilling in the Gulf and other fragile and hard-to-drill regions – and securing oil in Iraq and other foreign regions – are in our national security and national energy policy interests (remember that Alan GreenspanJohn McCainGeorge W. BushSarah Palin, ahigh-level National Security Council officer and others all say that the Iraq war was really about oil).

Nobel prize winning economist Joseph Stiglitz says that the Iraq war alone will cost $3-5 trillion dollars.

And economist Anita Dancs writes:

Each year, our military devotes substantial resources to securing access to and safeguarding the transportation of oil and other energy sources. I estimate that we will pay $90 billion this year to secure oil. If spending on the Iraq War is included, the total rises to $166 billion.In addition, experts say that the Iraq war has increased the threat of terrorism. See thisthisthisthisthisthis and this.

The bottom line is that if alternative energy R&D was funded at the same level as conventional energy, and when the externalities of environmental, military and terrorism costs are taken into account, it is not clear that alternative energy is really substantially more expensive than conventional energy. At the very least, if the playing field were leveled, alternative energy could become cost competitive in the relatively near-term future.

In other words, renewable energy research and development received a small fraction of the R&D funding for nuclear and fossil fuels. This has skewed the market, making conventional energy sources cheaper and alternative sources more expensive.


additional article


As Robert Redford writes this week:

Thursday, May 20, 2010, marks one month since BP’s oil rig exploded in the Gulf Coast ….

This is the clearest picture we could have of our failed national energy policy — which extends over many decades and administrations.

It’s not just the one BP oil rig. For example, since the Deepwater Horizon oil drilling rig exploded on April 20th, the Obama administration has granted oil and gas companies at least 27 exemptions from doing in-depth environmental studies of oil exploration and production in the Gulf of Mexico. Then there are the 12 new oil and gas drilling rigs launched in the U.S. this week.

And a whistleblower who survived the Gulf oil explosion claims in a lawsuit that BP’s operations at another oil platform risk another catastrophic accident that could “dwarf” the Gulf oil spill, partly because BP never even reviewed critical engineering designs for the operation. And see this.

Indeed, if Alan GreenspanJohn McCainGeorge W. BushSarah Palin and others are right, the costs of our failed energy policy might be much higher , as it would include various military costs as well.

And the Department of Defense also apparently has some issues with extensive off-shore drilling for security reasons.

Many still believe that alternative energy is an expensive, unrealistic pipe dream.

But that is no longer necessarily true, especially when the externalities of environmental and military costs are taken into account.

Technological Breakthroughs

As I have previously pointed out:

One of the world’s leading experts on trend forecasting says that producing our own energy for our homes and cars (called “micro generation”) will become ahuge trend in the next couple of decades.

What’s he talking about?

Well, energy and food prices will keep going up. Every dollar we don’t have to pay to the energy utility or food producers is a dollar we get to keep. And the technology for producing it ourselves is getting better and better.

So increasingly over the next couple of decades, we will generate our own energy and food.


Due to high oil prices, major breakthroughs in energy production are happening every day.

For example:

  • And new approaches to solar energy [see below] are making residential solar very cost-competitive
  • It has been discovered that alcohol made from donuts, grass and other abundant materials can run cars and all other engines [see below]

With recent breakthroughs, individuals can now generate enough energy to get off the grid and power their own homes. Indeed, some companies will evenprovide the equipment for you (and see this).

Indeed, an new government study shows that North Sea wind and wave power could make Britain the “Saudi Arabia of renewable energy“. For more on microgeneration and solar energy breakthroughs, see thisthisthis and this.
Moreover, Japan and other countries are funding large-scale projects to place solar collectors in orbit, and then send clean energy to Earth.

And as I’ve written before, alcohol has more alternative energy applications than you might know:

There’s a secret history regarding alcohol that you won’t hear on the six o’clock news:

  • Cars and everything else running on internal combustion engines can run on alcohol at least as well as they can run on gasoline. Indeed, engines were built back in 1870 that could run using either alcohol or gasoline
  • A New York Times article from 1908 (and here) enthusiastically states:

“Autoists Discuss Alcohol As Fuel; Great Future Ahead For Use In Commercial Wagons, Says Prof. Lucke. Tests With Motor Truck E.R. Hewitt Tells Engineers Of His Results With Gasoline And Alcohol In Same Engine”

  • Henry Ford said that alcohol was “a cleaner, nicer, better fuel for automobiles than gasoline” (James Brough, The Ford Dynasty: An American Story, p. 118, and cited in “Ford – The Men and the Machine”, p. 365). The Model T Ford had a knob right on the dashboard to adjust the fuel-air mixture foreither alcohol or gas
  • Alcohol does not corrode or shorten the lifespan of modern cars, and an inexpensive adjustment to regular cars will make them run smoothly and inexpensively on alcohol


Moreover, those in the know actually are using alcohol as a fuel today. For example, there are many millions of cars being driven in Brazil that run on alcohol.

And many government and car fleets are actually required to be able to run on either alcohol or gas. The car companies simply forgot to tell the American consumer that these kind of cars are available. See this and this.

Indeed, as I’ve previously noted, running equipment using alcohol should not increase food prices:

The leading proponents of alcohol as fuel are not talking about corn. Corn is a lousy crop for making alcohol, and there are many other crops that are much more efficient. Indeed, the leaders in this field promote growing a wide variety of crops (appropriate for whatever specific climate you live in) , and many of the crops they suggest are also valuable food crops.

And you don’t even need to use plants . . . you can make alcohol fuel out of rotten fruit, stale soft drinks or donuts.

And see this and this.And as I pointed out last year:

Heat can be used to generate electricity. This is true not only on the industrial scale, but even on the level of your home faucet. Indeed, inventors have already built home faucet kits which turn the unused heat from your hot water into electricity.

In hot climates, black thermal-electric mats could be installed on roofs to generate electricity.

Heat is a byproduct of other processes, and so nothing special needs to be done to create it. Just about every human activity and many natural processes create heat, so we just have to utilize it.


Another use of a free, wasted byproduct to generate electricity is piezo-electric energy. “Piezo” means pressure. Anything that produces pressure can produce energy.
For example, a train station in Japan installed piezo-electric equipment in the ground, so that the foot traffic of those walking through the train station generates electricity (turnstiles at train, subway and ferry stations, ballparks and amusement parks can also generate electricity).

Similarly, all exercise machines at the gym or at home can be hooked up to produce electricity.

But perhaps the greatest untapped sources of piezo-electric energy are freeways and busy roads. If piezo-electric mats were installed under the busiest sections, the thousands of tons of vehicles passing over each day would generate massive amounts of electricity for the city’s use.


Scientists have figured out that solar collection is much more efficient if you focus the sunlight:

And see this.


One day, virtually every surface will be turned into an energy-production medium. Instead of having discreet energy-producing machines, roofs, exterior walls, sidewalks, roads and many other surfaces will be coated with “smart materials” which convert light, heat, pressure and other inputs into useful energy, which are then collected, stored and distributed as needed.

Hundreds or thousands of years in the future, mankind might even learn how to collect the virtual particles which are constantly popping into and out of existence.

Harvesting The Ocean of Energy
Perhaps the biggest evolution needed in people’s thinking – in any area of life – is how we think about energy.

The current paradigm is that energy is produced expensively by governments or large corporations through gigantic projects using enormous amounts of money, materials and manpower. Because energy can only be produced by the big boys, we the people must bow our heads to the powers-that-be. We must pay a lot of our hard-earned money to buy electricity from them, and we can’t question the methods or results of their energy production.

Our life will become much better when we begin to understand that energy is all around us – as an ocean of electromagnetic forces and as a byproduct of other processes in the form of heat, pressure, etc. – and all we need do is learn how to harvest it.

The Gulf oil spill disaster must not be in vain.

We must use it to finally find the vision and the will to make the switch to alternative energy.

Note: While energy conservation is not as interesting as generation, it is worth noting that power usage in American buildings could be reduced by 50%, largely byprogramming unused appliances to be shut off.

Moreover, approximately 6.5% of all power transmitted in the U.S. is lost through transmission line losses and other inefficiencies every year. By improving the efficiency of transmission lines, energy conservation can be greatly improved.

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