The Saving Grace in McCain’s Energy Policy
The $300 million battery prize and the flex-fuel requirement could save the nation.
June 27, 2008 - 7:39 am
In a speech given June 24, presumptive GOP presidential candidate John McCain unveiled his energy policy. The McCain program contained numerous elements, but the one that made headlines was his promise to offer a $300 million prize for the development of a battery that would “allow the leapfrogging of the current generation” of electric and plug-in hybrid cars.
Charles Lindbergh flew the Atlantic to win a prize, and other similar prizes helped to drive the development of aviation technology in the 1920s and 1930s. Going back further in time, the development of a workable longitude-determination technique was also successfully incentivized by the offer of a prize to the inventor.
Prizes have thus proven their worth as a method to motivate inventive effort in frontier areas. But batteries are a widely-used technology, and there have been huge amounts of private money invested every year for decades in ongoing programs to develop better ones. So the question must be asked; why offer a government prize to try to incite further such investment, when the much greater rewards offered by the commercial market for a better battery are so apparent?
More to the point, why focus on battery development at all as a major element of energy policy? With or without revolutionary batteries, there is no realistic prospect at all of electric or hybrid cars gaining a sufficient share of the American market — let alone worldwide car sales — on a time scale fast enough to do anything significant to stop the crushing of the United States by the Islamist-led oil cartel.
Let’s stop fooling around. This year the United States will import 5 billion barrels of oil. At $130/barrel, the bill for that will come to $650 billion, or more than five times the cost of the Iraq war. Add to that $400 billion the Americans will pay for domestic oil, and our total fuel bill this year will come to over a trillion dollars, and the world as a whole will pay $4 trillion. These petroleum costs are up a factor of twelve from what they were in 1999, and represent a huge highly-regressive tax on the world economy. For Americans, the $1000 billion oil levy is equivalent to a 40% increase in income taxes across the board – with sixty percent the sum being paid over in tribute to foreign governments.