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January 15, 2009

Why not a Mahattan-style energy project?

Many people say we should do for energy today what we did for winning World War II or sending a man to the moon in past decades; that is, to develop a massive government project to produce the fuel that will be the successor to gasoline. What's wrong with this idea?

Dr. Mike Walden, North Carolina Cooperative Extension economist in the College of Agriculture and Life Sciences at N.C. State University, responds:

"Well, what's wrong with it is it's not the same. Developing the atomic bomb or sending a man to the moon were specific goals, and we put resources into achieving those goals. But it was not necessary to make either a commercially viable endeavor. That is, this is the difference between achieving something that's technically possible and achieving something that's economically possible. With the atom bomb and going to the moon, all we needed to do was make sure that that was technically possible, and we did it. Developing a new fuel not only has to be technically possible, it then has to be profitable; that is, commercially viable on the market. That is, it has to be able to produce at a price that consumers are willing to pay and that will provide a profit to the company. So this is a very tall order, and it's a much taller order than those other endeavors you mentioned. And this is why we haven't yet achieved it."

Posted by Dave at January 15, 2009 08:00 AM